Some say it will never happen in India. But India FinTech startups know it will: a digital, cashless society powered by high-speed networks, software, and the mobile Internet.
India leads the world in mobile phone penetration. But its population lacks many financial services people in developed countries take for granted. 20% of the world’s unbanked live in India. If you add China and Indonesia, the total rises to 38%. That’s one-third of the world’s unbanked population.
Financial technology or FinTech automates insurance, payment, and asset management solutions. As I wrote in an earlier article, FinTech is booming and fragmenting in many different directions worldwide. According to the National Association of Software and Services Companies (NASSCOM), FinTech software generated $1.2 billion in 2015 within India. That’s expected to double by 2020, making India one of the fastest growing markets for FinTech software products.
India FinTech Startups: Nimble and Moving Fast
400 FinTech companies, which includes 200 startups, are competing with mammoth banks. But established banks want part of the action too.
For example, the Reserve Bank of India and Indian Banks Association are pushing a technology called UPI (Unified Payments Interface). Using smartphones and an application, citizens can pay utility bills and school fees, make over-the-counter payments and shop online.
But it’s the India FinTech Start-ups, funded by investors with big pockets (American Express, CitiBank, Barclay’s, PayPal, and other investment firms), that create innovation in this second largest country.
Fourteen India startups believe these services will change the financial landscape:
- Mobile Commerce
- Mobile Payment Networks
- Online Credit Evaluation
- SME Capital Finance
- P2P Lending
- Wireless Payment Systems
- Merchant Transactions
- Mobile and Storefront POS Terminals
- New Mobile Wallets
- Payment Gateways
Sweden may become the first cashless society. Could it happen in India?
With all the FinTech investments, strategies, software and system development taking place, you would think India will become a cashless society soon. Yet, the Indian government, banking system, FinTech innovators, and investors must agree to standards and best practices before the rupee disappears.
For further reading, see these articles about a “cashless society.”
- India Makes a Move Toward a Cashless Society
- Who Would Actually Benefit from a Cashless Society
- Narenda Modi Calls for Making India a Cashless Society
- The Countries that would Profit Most from a Cashless World
- Is India’s ATM Shortage its First Step to a Cashless Society?