The Digital Fifth Newsletter

Time to convert these Fintech Initiatives into a Fintech Revolution

- Shri Narendra Modi, Honourable?Prime Minister of India

Launching The Digital Fifth Annual Fintech Report 2022: Assertive India - Global Leader In Fintech

- 182 fintech startups funded $7 B

- 31 acquisitions in fintech

- 2 IPOs

The accomplishments mentioned above point to one conclusion - Indian Fintech has arrived. The growth that the industry has witnessed over the last year has been extraordinary, and it shows no signs of slowing down.

The average consumer had never envisioned that cash, the king, could possibly be dethroned. With its reign followed the horde of problems that troubled every business. However, as John Adams once said, “Every problem is an opportunity in disguise.”??

The last few years have flipped BFSI over its head. This disruption has turbo-charged the financial inclusion drive. Today, the cost of credit has reduced, insurance coverage has increased and investing in stocks is longer confined to high-rise residential societies. In fact, consumer segments that financial institutions deemed too risky, such as New-to-Credit, MSMEs, thin-file and even students, are the ones receiving the most focus. These are all indicators that the initiatives being undertaken by the industry are coming to fruition.?

The 'Assertive India - Global Leader In Fintech' report analyses:

- Different dimensions of Growth in Fintech in terms of Funding and ecosystem play

- Fintech evolution in neighbouring markets

- Digital Transformation measures such as Digital Maturity Model and Open Banking

- Top 10 innovative Indian startups

and much more...

Click here to download the report

Click here to register

FinTech Firm RapiPay Raises $15M for Digital Banking Super App NYE

FinTech company RapiPay has raised $15 million in investment funding toward digital banking super app NYE.?The investors see a great synergy with NYE in getting their entire retail network of six million merchants using the super app for all their requirements like salary and current accounts, payment solutions, retail and business loans, buy now pay later, investments, insurance or other convenience services,” said RapiPay in a statement announcing the funding effort.

Source: Pymnts

KFin Tech Acquires Hexagram

KFin Technologies Private Limited, a Hyderabad-based investor and issuer servicing platform, has acquired Bengaluru-?based Hexagram Fintech, an IT product player that specialises?in fund accounting and reconciliation product development,?for an undisclosed sum.??Pointing out that post the acquisition Hexagram will?become its wholly-owned subsidiary, KFin Technologies said??the acquisition will help it further expand its fintech?product offerings by adding fund accounting and reconciliation solutions to its platform.

Source: Times of India

Minko, a retail fintech platform that provides credit facilities to small kirana and retail shop owners?recently?raised $1.5 million in a seed funding round.

Minko Credit, the platform added three new products within the last six months — Minko Invoices, Minko QR Code, and Minko Gold. With the digital B2B invoice payment stack embedded with credit, the company aims to move online a large segment of the multibillion-dollar ‘retailer-to-distributor’ payments, which mainly happens via cash and cheque.

Source: Hindu Business Line

Does the 2008 premise of the creation of?Cryptocurrency?as a new currency structure for peer to peer payment system hold good in 2022 ?

When Satoshi Nakamoto released the paper on?bitcoin?in 2008, the ecosystem didn’t have any?realtime payments?system to facilitate faster peer to peer digital payments, central intermediary and banks managed entire payment ecosystem which was marred with inefficiencies, delayed payments, time bound availability, charges and much more.

But not any more, the scenario has taken a sharp turn.

Across the world, real time payments (RTP) instituted by respective central banks. Singapore launched its RTP in the form of?FAST?( Fast and Secure Transfer) in 2014 or EU received its own in the form of?SEPA?instant. While US got its RTP pretty late but UK launched its RTP somewhere in 2008.

India story is totally at different level. India launched its real time payments in form of?IMPS?(Immediate Payment Services) way back in 2010 and continued to build multiple product over it including AEPS, UPI. Central bank remains as intermediary with added layer of umbrella entity of NPCI and banks still maintain largely all money in digital form in accounts of customers.

But most of challenges propagated by Crypto do not exist today. Though still not perfect and lots more innovation required but from crypto currencies perspective of earlier premise seems to be sorted out like

- Payments are real fast and instant

- Counterparty gets money immediately

- P2P settlement are instant, though merchant settlements may still be taking time but manageable

- Ecosystem is build on open framework like today entire?UPI?libraries are available to build business

- It’s for free, UPI too is free for merchants

Though security remains concern but majority of?cybersecurity?sand fraud related to digital payments remain due to customer awareness.

So why would anyone will like to buy a pizza by paying through bitcoin and transfer money. With this, we don't think Crypto going to be positioned on above premise. Yes cross border payments still major challenge but one UPI moment is awaited and this could also be nailed out.?

Shashank Shekhar

Co-Founder & Head of Consulting

The Digital Fifth