How fintech startups are cashing in on India’s digital boost post-pandemic
In a panel discussion by YourStory’s Daily Dispatch, ZestMoney’s Priya Sharma and Sonika Chandra from PhonePe shared insights into India’s fintech sector and future growth plans.
The move to a virtual world has been of paramount importance for fintech startups.
Amidst the COVID-19 pandemic-led restrictions, an increasing number of people are adopting digital means to avail of financial services.
The acceptance for digital payments, digital insurance, and availing credit online, among others, has grown significantly in the past 12 to 18 months.
According to a report by Boston Consulting Group (BCG) and FICCI, by 2025, India will attract a valuation of over $150-160 billion for its fintech sector.
The industry has already catapulted in the Indian market with UPI payments and online credit availability becoming more relevant options for customers.
To discuss this unprecedented growth in the fintech sector and ascertain the way forward, Priya Sharma, Co-founder, CFO, and COO, , and Sonika Chandra, Head - Consumer Payments, , joined YourStory’s Daily Dispatch on a panel discussion.
A closer look: The growth in the fintech sector
Amidst the pandemic, both PhonePe and ZestMoney witnessed an uptick in the usage of fintech services’. Digital payments startup PhonePe — incidentally also diversifying into offering more financial services — has witnessed a jump in payments across various incidents.
“Payments have taken off in every sphere. Digitisation across use cases has gone up, so has payments in every different part of it. Merchant payments have seen the biggest jump for us,” said Sonika, as she lists the various uses of the app for paying kirana stores, event transactions, and shopping, among others.
The most interesting trends, she adds, have come from Tier-II and III cities with regard to the usage and adoption of digital technologies.
Echoing the same thought, Priya said ZestMoney, too, has seen massive growth in the past couple of months.
“This is almost like a paradigm shift in consumer behaviour we have seen and witnessed first-hand over the last 12-18 months, primarily driven by COVID-19 and the lockdown. But, we do feel this is positive and not a changing move towards digital,” she added.
ZestMoney, according to Priya, has also come of age with the ‘Buy Now Pay Later’ category. She said, “We have been pioneering the ‘Buy Now Pay Later’ products since 2016, but it’s suddenly now become a household name.”
Along with the unexpected push for digital due to COVID-19, the ongoing festive season has also churned out good demand for financial services.
At present, PhonePe is seeing a continuous growth trajectory and aims to maintain that. ZestMoney is focusing on both online and offline stores. It is also focusing on helping customers with bigger ticket sizes as expenses increase during this season.
Future plans
The challenge of creating awareness around digital adoption is partially met, and now, fintech platforms are looking to build on their products.
“We have seen a massive spike in our consumer uptick for insurance products and investment products like mutual funds,” said Sonika.
The startup wants to approach financial offerings holistically for its upcoming launches. At present, PhonePe facilitates over two billion transactions per month.
The target from here, Sonika said, is to make services meaningful to a much larger customer base.
ZestMoney's new BNPL category will see more focus in the coming year. The fintech startup will look at credit offerings particularly and provide insurance products bundled with BNPL products.
“For us, one of the big pieces of investment this year and over the last 12 months has been our in-store offerings. We are increasingly penetrating offline, we are not just online, which was how we started,” said Priya.
Edited by Suman Singh