The reforms of 1991 marked the beginning of India’s transformation from a $513 billion economy to a $3.5 trillion behemoth in 2022. Then, 2016 can be described as the beginning of the fintech revolution that will make India the world’s third-largest economy by 2030.
From facilitating digital payments to helping small startups become unicorns, fintech has unlimited potential to unleash India’s entrepreneurial prowess and transform the way business is done in India.
Financial inclusion and mainstreaming India’s unorganized sector
India just cannot become a $5 trillion economy by 2027 without focusing on key areas like increased financial inclusion and mainstreaming of India’s unorganized sector. India’s unorganized sector accounts for 50% of the country’s GDP and employs around 80% of our workforce.
While the size of the unorganized sector is a significant challenge. It also represents a huge opportunity that can accelerate India’s dream of becoming a developed economy. It all depends on how quickly and efficiently can it be brought into the mainstream.
This transition just cannot be possible without greater and faster adoption of fintech solutions. Fintech democratizes access to financial products. It incentivizes businesses to join the organized sector. Instead of viewing it as an avoidable complication, fintech helps the unorganized sector recognize the move as a sensible and profitable business decision.
Payment solutions and quick credit may be the most glamorous aspects of fintech. Other solutions like InsurTech and neo-banking can help a business grow to its full potential in the shortest time possible.
Technology as the great equalizer
The combination of technology and financial services creates a level-playing field where the ability of a business to innovate and adapt to changing trends becomes more important than traditional parameters like the firm’s location, size, or even the gender of its owner.
With fintech, a woman running a small business in a Tier-3 city can secure affordable working capital loans, strategic investment advice, wealth, and investment solutions, or just a safer and more robust payment infrastructure just like a multinational corporation located in a metro.
By supplementing and complementing traditional financial institutions and service providers, fintech can either solve or simply render irrelevant the numerous challenges and barriers faced by entrepreneurs in India.
Catering to the masses and the niche as well
Fintech is inherently disruptive and innovation-centric, which means it eschews the one-size-fits-all approach when catering to its customers.
This means each customer—whether a work-from-home freelancer, a gig worker, a startup entrepreneur, or a conventional salaried worker—is assured of solutions that help his or her business grow.
All disruptive businesses—from WhatsApp to Tesla—began as niche and unconventional ideas. Fintech has the bandwidth to cater to conventional businesses and their evolving needs and requirements as well as radical ideas that have the potential to transform the world as we know it.
Solutions for the present and the future
Every business needs to focus on its short-term targets within the ambit of a clearly defined long-term vision or strategy. It needs to adapt to temporary challenges even as it equips itself to evolve to cope with paradigm shifts in the industry and the economy.
Fintech is the best tool for this challenge because it too is evolving at every step. Fintech may be identified primarily with digital payment solutions that help businesses cut costs, improve customer experience, and strengthen regulatory compliance.
However, fintech’s true value lies in the fact that it is innovative and scalable at the same time. A business that is expanding its digital footprint can easily get secure tailor-made solutions for its unique requirements.
From aggressive strategies during economic booms to conservative yet growth-centric solutions during tough times, fintech combines the best of financial services and technological innovations to help businesses master the present and plan for the future.
PayU—Committed to the India Growth Story
At PayU, we are proud of the fact that more than 4.5 lakh merchants and businesses trust us as their fintech partner. However, what we regard as our biggest achievement is that this number includes businesses across the spectrum—from large corporations and new-age businesses to medium and small business owners.
We believe India’s $5 trillion goal is just the beginning and that India has the potential to achieve faster, more sustainable, and broad-based economic growth by leveraging the power of technology with the innate entrepreneurial talent hidden in every Indian.
