Had an interesting phone call with my sister a few days ago… Actually, the call as such wasn’t so interesting but what was interesting was the conversation I overheard between my sister and her husband happening in the background, while we were talking.
Excerpt of the conversation:
Husband: Hey… Who is this Vaishali Naik who you have made a UPI payment to?
Sister: She’s the machhiwaali (fisherwoman)…
Husband: Ah Cool.
Just like the title of the article, the above conversation may seem simple, benign, almost boring even, but actually there’s a lot to unpack in both the conversation I overheard and the simple statement which it gave birth to, which forms the first part of the title of this article…
It was the conversation that got me thinking about how well technology has gotten entrenched in all our lives that a fisherwoman, who carries fish, prawn and other seafood on her head in a basket and visits people’s houses selling it to them (it’s very common in Mumbai) and who is quite possibly not very literate, is very comfortable & confident of receiving payment through UPI in her bank account, and that the concept of ‘digital’ money has been so easily welcomed by even that section of society which historically has always considered physical things like gold, silver and good ol’ paper notes as money or wealth.
Just while I was thinking about that, I read about how Razorpay has become yet another lockdown unicorn and it has taken the number of businesses it services with its payment and banking solutions to 5 million.
Right next to the Razorpay story was the news story of how the Democrats in the US want to send 1200$ cheques to everyone to help with the financial crises people are in, on account of the pandemic… And I was completely amazed that they are STILL using cheques? And then I remembered how India ended up making thousands of crores worth of payments to people – and still continues to do so, directly into their bank account… Can you imagine the madness that would have happened had people needed to come physically to government offices to pick up their lockdown relief money or their LPG subsidy money?
And that’s when I came to the realisation that when we talk of technology having saved people in the Covid crisis, we talk about ventilators, HCQ, vaccines, Flavipiravir, etc. But what we don’t speak about is things like internet, digital media, social media, UPI, payment apps that have been created by the brilliant young minds from India and the role that they have played during the pandemic and continue to play in our everyday lives.
Organisations like BankBazaar, Cred, Ezetap, Financepeer, Instamojo, Khatabook, Lendingkart, Loanwalle, MobiKwik, MoneyTap, PaisaDukan, Paytm, PolicyBazaar, Razorpay, ZestMoney are just a few of the 30+ fintech startups with robust operations today in India. And almost ALL of them touch people directly…
We keep thinking of Fintech as something that is far away from common people – depicted more by the complicated Bloomberg terminals shown in Wall Street movies, rather than in the SMS that is received by fisherwoman Vaishali Naik when the payment made to her through UPI reaches her bank account. It is this ease of living that Fintech has enabled, not only the much talked about ease of doing business.
That said, and since ease of doing business has come up, it is also keen to note how Fintech has ended up as a big saviour for so many of the 63 million MSME units spread across India. Almost 80% of these are self-funded with no borrowings from banks and formal institutions. These have been helped enormously by several of the ‘smart‘ FinTech startups by providing services like Transaction support, marketplace lending (peer-to-peer lending), small ticket short period loans, payment gateways and small ticket customer credit and debt-management. Just one app like Khatabook enables lakhs of small shopkeepers and 1 or 2 employee retail outlets to not only maintain an account of which customer owes them what, but can also remind the customer and demand payment through the app. For an informal business, this service is worth its weight in gold.
And then there are those startups which, while providing a simple mobile-based electronic point-of-sale system to small retailers, also are providing data analysis services to them. These retailers regularly receive inputs from their point-of-sale fintech startup that also provides them insights into how much inventory of which product they need to buy when, based on historical data of sales cycles, thereby enabling them to have better churn of their working capital and efficient use of shelf space – both of which is limited for small retailers.
All this said, the journey has not been easy for any of the fintech startups in India. From weak internet penetration numbers to low financial and digital-security literacy enabling criminals to scam poor gullible people out of their digital money through phone-based scams, the fintech startups have ploughed through it all, to a point now where the Indian government has the ability to transfer money digitally to almost 900mn Indians, which is almost three times the population of the United States.
This ecosystem is a testament to the ingenuity demonstrated by the FinTech startup ecosystem in India, which has not only been able to attract billions of dollars of investment from around the world, but has, surely and steadily, faltering at times and galloping at times, turned India into one of the best served FinTech markets in the world… Even during a once-in-a-century pandemic!!!
IMI Insights 
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