Fintech Market in India 2020
- Netscribes (India) Pvt. Ltd.
- April 2020
- 69 pages
The fintech market in India was valued at ~INR 1,920.16 Bn in 2019 and is expected to reach ~INR 6,207.41 Bn by 2025, expanding at a compound annual growth rate (CAGR) of ~22.70% during the 2020-2025 period. Increased adoption of the internet and improved digital infrastructure are driving the fintech market in India. However, lack of consumers trust on digital modes of payment, and rising threat of cyber and data security are impeding market growth.
Further, the industry is witnessing increased application of artificial intelligence (AI) and Big Data for enhancing personalized offerings. New business models like Neobanks are expected to revolutionize the Indian fintech market.
Payments, lending, insurtech, wealthtech and banktech are the key operative segments within the fintech market.
The payment segment comprises M-wallets, PPIs, merchant payments, PoS services, international remittance and trading in crypto currencies.
The lending segment includes peer-to-peer lending, crowd funding, loans, online lenders, on-book lending by NBFCs and credit scoring platforms. Insurtech is a niche segment in the Indian fintech ecosystem consisting of insurance aggregators, IoT, wearable and kinematics.
Wealthtech includes robo-advisors, discount brokers and online financial advisors.
The principal function of the banktech segment is to utilize data points like financial transactions and spending patterns to create risk profiles of consumers.
In 2018 and 2019, the payments segment received the highest amount of venture capital investments, followed by the lending and insurtech segments. Wealthtech and banktech are the emerging segments of the industry.
Impact of COVID-19:
As the discretionary spending in the industry has gone down considerably, the number of digital transactions has declined. This has severely hampered cash flow for leading businesses in the country. However, the industry witnessed a ~42% rise in the use of digital payment modes. But purchasing only essential products would not be enough to drive uptake of digital transaction in the Indian fintech ecosystem. Healthcare, bill payments, grocery and food are witnessing rapid digitization, while the entertainment, fashion, travel and tourism industries are at a standstill, thereby reducing transaction volumes in the country and severely affecting the Indian fintech industry.
The fintech market in India is highly competitive with incredible growth potential; however, stringent regulatory norms tend to act as significant entry barriers for new players entering the Indian fintech space. The country is growing into a hub for fintech start-ups, and global investors are actively investing in prospective Indian fintech start-ups. In terms of investment, PayTM, Cred, Acko, InCred Finance and BharatPe emerged as the top five fintech players in 2019.
Freecharge Payment Technologies Private Limited
One Mobikwik System Private Limited
Mswipe Technologies Private Limited
One97 Communications Limited
PhonePe Private Limited
Pine Labs Private Limited
PayU Payments Private Limited
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