Digital payments rise, so do risks: What’s next for India’s fintech?

India’s payments story is no longer just about convenience. It is about confidence.

From local vendors accepting UPI to nearly 400 million Indians now using digital payments, the country’s relationship with money has fundamentally transformed. But as digital transactions become invisible and instantaneous, the risks surrounding fraud, data security and financial anxiety are more noticeable than ever.

Cyber fraud losses alone touched Rs 1,900 crore in FY24, turning trust into the most valuable currency of the digital economy.

This evolving landscape formed the core of an in-depth panel discussion during the afaqs! BankFin 360 held in Mumbai on November 25, where industry leaders gathered to analyse the future of finance. 

Moderated by Anupam Asthana, executive director, Source India, the session titled “Seamless. Secure. Scalable: The Future of Payments Infrastructure”, featured Alok Arya, chief marketing officer, Equentis; Rekha Motwani, senior VP – Media, ARM Worldwide; and Siddharth Shakdher, CMO & business head, Paytm.

Asthana began the session with the most relevant question: how do platforms reassure users with trust without slowing them down? How do brands protect customers without overwhelming them with warnings?

Rekha Motwani, senior VP – media, ARM Worldwide, emphasised that security communication is as important as the technology itself. “Real-time alerts, proactive messaging and educational prompts during transactions shift the user’s mindset from fear to confidence,” she said.

She added that platforms must strike a balance, with the goal being to make users feel quietly protected, not overwhelmed.

She stressed that timely explanations for blocked or flagged transactions help users feel informed and supported rather than intimidated.

Paytm’s learning curve

Speaking of awareness, Shakdher shared an important insight from the platform’s onboarding experience. While introducing UPI, Paytm tried reassuring users by saying ‘no KYC required’, but consumers, conditioned by years of compliance-heavy processes, interpreted it as more KYC instead.

“We realised messaging matters as much as the product,” he explained.

“Instead of saying ‘no KYC’, we started saying ‘easy two-step process’ – and conversions improved significantly.”

Watch the full session here- 

Paytm also introduced a trust-building feature where new users are guided to send Rs 2 or Rs 5 to a friend as their first transaction – a low-risk action that dramatically boosts confidence in the platform.

Security is expected. Speed wins hearts

Shakdher revealed that in conversation with users, they got to know that consumers prioritise speed, success of payment and accuracy above all else. Security, while critical, sits quietly in the background — until something goes wrong, when it instantly becomes the top concern.

This is why leading platforms embed security directly into the user journey through biometric authentication, layered verification and seamless flows, rather than pushing security as a marketing message.

From an investment and advisory lens, Arya highlighted that trust is universal across categories, especially in money-related businesses.

Drawing parallels with personal relationships, he underlined two fundamentals of trust: proximity and time spent with the customer.

Arya also praised industry-wide initiatives such as HDFC’s “Vigil Aunty” campaign for openly educating consumers about fraud risks, and pointing to tighter SEBI regulations, including mandatory QR code verification for registered advisors and stricter controls on financial communications.

“Be upfront with customers,” he advised. “Assume they know less than you think. Brands earn respect when they educate before they sell.”

Designing for Gen Z and Gen X, together

Motwani highlighted how platforms must design differently for generational cohorts:

• Gen Z values speed, one-click payments, biometric access and gamified nudges.
• Gen X seeks reassurance, transparency, reliability and visible safety cues.

Winning brands, she explained, no longer follow a “one-size-fits-all” funnel. Instead, they build distinct yet interconnected user journeys that extract maximum value across age groups while keeping the platform experience cohesive.

“The future of payments lies in being fast and frictionless for Gen Z while remaining safe and dependable for Gen X — at the same time.”

Extending the conversation on trust and consumer behaviour, the panel turned its focus to how different generations navigate financial and investment decisions — and how businesses must adapt their strategies accordingly.

Speaking from an investment advisory standpoint, Arya highlighted a striking insight drawn from both business data and a nationwide study of over 3,000 respondents. According to the findings, consumers between 20 and 25 years old – spanning Gen Z and the emerging Gen Alpha – are hyper-exposed to information, deeply familiar with digital platforms and highly confident in their ability to self-learn.

“They don’t feel they need advice,” he said. “If they don’t know something, they believe they can simply figure it out.”

However, this self-reliance has its limits. While younger consumers actively invest in technology, gadgets and even fractional real estate, they are reluctant to pay for professional financial advice.

Startups offering low-cost AI-based stock advisory solutions have struggled to convert this cohort, with less than 10% of revenue coming from under-30 users, forcing many to pivot toward customers aged 35 and above.

How Paytm adapts journeys through AI

Bringing the conversation back to payments, Shakdher explained how Paytm uses AI-driven behavioural insights to personalise user journeys — not strictly by age group, but by mindset and intent.

Some users enter the app solely for quick UPI transactions, while others show openness to investments, digital gold, mutual funds and broader financial products. Paytm’s interface dynamically prioritises features based on these signals, ensuring that scanning and transfers remain front and centre for transaction-focused users, while financial services surface more prominently for investment-oriented customers.

Subtle experience differences also emerge across age cohorts: Gen Z gravitates towards dark mode, multi-feature interfaces and exploration, while Gen X prefers simplicity and speed, often entering the app only to transact and exit.

Robo advisory meets human intelligence

On the investment front, Arya cautioned against viewing robo-advisory as purely algorithm-driven stock selection. While machine learning plays a crucial role, Equentis follows a model they term “Alliance of Intellects” – combining AI insights with deep human research.

Before recommending stocks, teams conduct on-ground verification, factory visits and operational assessments, a layer of diligence algorithms alone cannot provide. In one instance, such physical checks uncovered a factory shutdown behind a rapidly rising stock price, preventing potential investor losses.

AI’s role in marketing & media effectiveness

Motwani highlighted how AI-powered predictive analytics is transforming media planning and customer targeting. Campaigns today are increasingly driven by real-time behavioural signals, transaction patterns and channel preferences, enabling highly granular, intent-based marketing.

This shift, she noted, has already delivered measurable gains, including higher click-through rates, lower acquisition costs and improved conversion efficiency, while allowing brands to tailor engagement formats, from app notifications to SMS and email, based on individual consumer behaviour.

The session revealed how India’s financial ecosystem is being quietly rebuilt- not through louder marketing, but through smarter experiences.

(The event was supported by ARM Worldwide as Co-Partner, Teamology as Digital Strategy Partner, Techmagnate as Powered By Partner, ReBid as Silver Partner and Benson as Trophy Partner.)