India’s Digital Payments Space Reaches Inflection Point

The digital payments industry in India is moving beyond borders to offer international cross-border payments, Cashfree Payments CEO and Co-Founder Akash Sinha observes in the new PYMNTS eBook, “What’s Your Plan? Payments Strategies for a Strong 2022 Finish.”

The last few quarters have shown that the payments industry must always be ready for the next big change and in our estimate, Q3 will be no different. We will thus continue to focus on building a strong B2B platform that offers financial products for an ever-expanding customer base. This will include publicly listed companies, large government entities, unicorns, startups, mom-and-pop stores and freelancers.

While the FinTech industry continues to evolve, globally, in India we’re seeing an inflection point where the digital payments industry is gradually moving beyond borders to offer international cross-border payments. Our focus will remain on helping businesses offer financial services on their platform — for example, an eCommerce marketplace offering credit to its vendors or a company offering credit cards to its employees. These services require a dedicated infrastructure, but businesses can use our products to meet these requirements while they stay focused on their core proposition. To this end, our first BaaS product, Accounts, is a tailor-made solution for neobanks, FinTech, gig economy businesses and internet companies looking to offer financial services helps businesses quickly build a financial services product and grow fast.

The Good News

As we enter the last quarter of this year, we are seeing an increasing number of businesses trying to go digital to acquire more customers. This is great news for payment companies like us. We have grown almost 100% in terms of merchant sign ups in the last four months. We see tremendous scope in the Indian trading operation where traders are buying stocks, listed outside India. Also, the process of transferring education fee payments to universities outside India has been made quicker and more convenient for the Indian students.

We recently bagged the regulator’s nod to roll out our product which would enable the purchase of Listed Shares on Foreign Exchanges. This will fall under the ambit of RBI’s Liberalized Remittance Scheme. The product will enable Indian FinTechs to offer the purchase of shares, ETF units and other assets listed on foreign exchanges via UPI/ net banking as a feature to Indian investors.

What’s Happening in India

Within India, there has also been a significant growth in the number of merchants, across industries, that have adopted the tokenization mechanism. The overall outlook regarding the industry’s preparedness for tokenization seems positive. Merchants, especially those who operate at a larger scale, have shown particular readiness in this respect, which can be attributed to the festive season.

Overall, in this quarter we want to maintain robustness and quality, invest a lot in our engineering products, make efforts for direct bank integrations and also directly integrate with the systems we work with. That ensures reliability and performance at scale. In short, we will continue toward building a super FinTech platform on which other FinTechs can build their businesses.