Aishwarya Ramesh

The fintech boom in India: challenges, audiences and the 'trust' factor

On Day 2 of CMO week, a panel of marketers discussed the fintech sector in India in detail – audience, trust, growth potential, et al.

The fintech sector is having its moment in India. Its first push came in 2016 when Prime Minister Narendra Modi announced the move to demonetise 500 and 1000 rupee currency notes. At that time, Paytm’s numbers went from 125 million wallet customers before demonetisation to 185 million three months later. By November 2017, it had achieved 280 million users. whereas PhonePe hit a $2.5 billion total payment volume annual run rate in July 2017.

The first time around, the increase in usage of digital payments apps was due to the lack of availability of new notes. The second wave of fintech’s popularity came with the spread of the Coronavirus. The virus spread through surfaces and suddenly, there was an air of paranoia surrounding physical cash. Merchants and businesspersons in the formal and informal sector increasingly began opting for digital payments to keep their businesses going.

On Day 2 of the ongoing CMO week – the e-conversation discussed the fintech and digital payments boom in India. The panel comprised of Abhishek Shah, head of marketing, BharatPe; Abhinav Kumar – vice president, marketing at Paytm; Shalini Pillai Bannerjee – head of Gpay and NBU marketing – Google; and Udit Jain – vice president of marketing at Airtel Payments bank. The session was moderated by Sreekant Khandekar, the co-founder and director of afaqs!

(L-R) Sreekant Khandekar, Abhishek Shah, Abhinav Kumar, Udit Jain, Shalini Pillai Bannerjee
(L-R) Sreekant Khandekar, Abhishek Shah, Abhinav Kumar, Udit Jain, Shalini Pillai Bannerjee

The presenting partner for CMO week is ABP news and the session sponsor was Shutterstock. On April 22 2021, catch an exclusive live interview with Mona Jain, chief revenue officer, ABP Network on Apr 22, 4:45 - 5 p.m.

Khandekar began the session by pointing out that despite the boom in the category, there would always be challenges for marketers. Paytm’s Kumar began the discussion by pointing out that it’s important to address the question of why people download multiple apps. He theorises that a younger person would download 5-100 apps whereas an older individual might download 5-10 apps which they use frequently.

“Apps are downloaded to solve a particular problem and as a marketer, that is our goal – to make sure our app solves a problem that a user has or adds value to his life,” he points out.

Kumar says that the big change in consumer behaviour that’s happened in the last few months is the migration to digital payments and digital as a medium of advertisement since outdoor movement is restricted.

BharatPe’s Shah recalls that 6-8 months ago, B2B transactions made up nearly 70 per cent of the UPI transactions whereas now the needle has shifted to B2C and person-to-person transactions.

He adds that in India, UPI has overtaken card transactions in the past few months and that speaks volumes about the potential of the sector.

G-Pay’s Bannerjee points out that the first 70-80 million people have entered the digital payment ecosystem, but what does it mean for the next 200 million who are going to come on board?

Talking about the gender of skew of digital payments, she points out that one in five women make digital payments since 40 per cent of women all over India have access to mobile internet. She points out that the biggest barrier that new users entering the ecosystem face – will be trust.

“We need to be as reliable as cash and we need to build trust to be able to do that,” she says.

Airtel Payments Bank’s Jain points out that telecom has nearly 350 million users who have not adopted to digital transactions yet. He says that in India, smartphones being sold have increased storage and RAM and now users are more perceptive to experimenting with apps.

“If you look at the penetration of financial products in the country – insurance is hardly three per cent and mutual funds are around 10-11 per cent, so from that point of view, there is a huge scope for growth in the country. People are more interested in these products because there is tremendous investment scope and people want to experiment. These products will also deepen consumer engagement over a period of time,” says Jain.

He says trust is an important part of digital transactions and that there is scope for frauds here. “In our research, we found that 40 per cent of users have either faced fraud personally or know someone who has and that’s why safety is such an important aspect of this ecosystem.”

Jain also says that despite the lockdown, there has been an increase in digital merchant transactions since people wanted to do contactless payments. He adds that open-loop QR code (in which a user can use any payments app to scan a QR code and make a payment) has also helped grow this ecosystem.

“There are a huge number of transactions happening in Tier II and III cities. As and when distribution happens, there are more merchants coming on board and expansion is happening.”

GPay’s Bannerjee supplemented this point by saying that businesses had to pivot quickly to adapt to lockdown situations in the context of lockdown. She puts the ecosystem of trust into three main brackets –

- Do I trust the app to complete the transaction without failing

- Do I trust myself to operate the app correctly

- Do I trust the data which I’m sharing with the app/business

BharatPe’s Abhishek Shah adds that the biggest challenge in the fintech sector is to create differentiation for one’s brand. He also says that initially, his company was one that specialised in B2B payments in India, but this is a space that is rapidly growing in the country.

Watch the full discussion below -

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