Isn’t it simply amazing how much digitized our small traders across India, have become with a slight sprinkle of tech know-how. Pavement tea stalls and other such roadside kiosks selling a large variety of cigarettes, bidis, pas masalas, fast foods etc and even a great number of hawkers (who source fruits and vegetables daily and earn humble amount to meet the expenses limited for the day)are seen using a UPI app and pulling payments right into their bank accounts while skipping cash and coins.
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For such a purpose, a big variety of apps are used and Google Pay, Mobikwik, PhonePe, Amazon Pay and Paytm are some prominent.
On doing a simple addition about possible app downloads, the number grows into millions (80 million across India). Mr. Raman Khanduja, who heads Mintoak, a Mumbai-based Fintech, observes that over 40 million small businesses bank upon 4 different platforms, on an average at a time.
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He says, “The neighbourhood shopkeeper’s bandwidth is getting sucked into accepting money”.
Verily, small business people manage their accounts across different payment platforms, which have made their presence felt on the Indian fintech spectrum. Such apps substitute the cash and plastic currency immensely. These apps are not designed to churn out money and they use public utility frameworks scattered widely.
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As for the banks and financial institutions, data is fed into these apps following which, analysis takes place to assess credit eligibility of these traders.
Although banks give loans to little establishments (known as thin file customers) , fintech directs the flow of the data making it more structured, clear and therefore more useful to quick decision making.
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Later, Fintech is compensated by banks for linking the traders who are found to be creditworthy. A pertinent question arises here, why do the banks allow fintech to spread epidemically and to affect their clients for good reasons ?
Traditionally, banking institutions couldn’t find a broader scope for cashless payments among the commoners. This is chiefly because the card readers are costly enough to be installed at well-established commercial outlets only. Further, in such a model marked by point-of-sale devices, even if banks gather data about a plethora of cards that are being swiped at some store, it would require many calls to demand money from specific banks from retailors.
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This was quite mundane then and we can still afford to sideline it, in the light of prime technology. In fact, if there are 10 transactions, 2 would involve the swiping of credit cards and debit cards.
But such a reliance upon credit cards and debit cards used to be for high dollar purchases and at prestigious retailers.
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Initially, banks fell short of accepting smartphone based payments. This was due to gross negligence in tech orientation and many of banks’ online products were clunky.
Now, sensing the need, fintech pounced upon the opportunity created by India’s UPI (Unified Payment Interface), which has been here for 6 years now. The UPI is an open-source digital framework, enabling mobile apps to advance finances in real time and one can transact with the other through his mobile number.
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In the month of February 2022 itself, there are recorded 2 billion transactions related to merchants and the government makes such UPI based transactions free of charge.
It is generic to think banks’ capacity to seek deposits would dampen if apps tend to make profits from such payments. But earnings are there and Bharatpe attracts customers to transform their current accounts.
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Likewise, in the case of GooglePay, which is the second widely used wallet in India after PhonePe, it encourages fixed deposits through its influence. Now, unless banks heed to finance requirements within the specific timeframe, their banking service would be of little or no use.
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In addition to this, pushing finance into the digital world comes laden with its own problems and often skips the needs of small businesses.
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Then, there is a class of financiers too, whose processing and documentation is too complicated to unlock immediate cash succor for retailers.
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Truly, based upon the borrower’s financial strength which is determined by his digital cash flows, a pre-approved credit limit is ascertained, alongside other products like buy-now-pay-later. But banks ignore this and struggle to reclaim the lost market.
In the field of banking and finance, there is a renowned mind, Mr. Andy Mukherjee, who observes that banks should consolidate by utilizing the fintech advantage they enjoy among the vast pool of customers which can be categorized.
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Then, every shopkeeper’s phone, on an average, carries so many apps, that one is left with a small share of sales.
Mr. Khanduja says, “No body is getting enough to offer meaningful financial services”. For Fintech news updates in India, bank upon us.Fintech news updates in India is the power on your side.
Grasping the opportune time, a handful of stalwarts from finance and tech field, collaborated for Mintoak, which is a merchant payment platform which would facilitate banks to accept all digital payments, cash and cards. Among them is a former Visa Inc executive. To the relief of retailors, a single report was generated. As for its revenue, Mintoak gets a subscription fee and also gets a share in the sales of products done on this platform.
It collaborates with State Bank of India and HDFC Bank, which are India’s two biggest lenders. As a relishing fact, HDFC has a share of 5.2% in this start-up. Fintech news updates in India are uncovered through us.
In the digital finance arena, India’s success has influenced many other markets to shape payment flow on a similar basis. This has given Mintoak a great thrust in West Asia and in Africa too, it has gained momentum. Fintech news updates in India are easier to access now.
Mr. Khanduja shares,”We want to reconnect banks with SMEs”.
However, payment is not the only criteria to lure businesses and retailers find equal interest in maintaining inventory too. For such a purpose, credit needs to be made through the associates of finance institutions. There are many eCommerce platforms to gather such credit, such as Udaan which is supported by venture capital. JioMart which targets hyperlocal stores. Fintech news updates in India to encourage you to the eventual financial glory.
Then, Standard Chartered too, made a dive into the Indian ocean of eCommerce which is meant for B2B segment and expects to multiply this to Kenya as well as in other upcoming economies.
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