India - A global FinTech Superpower

India has the highest FinTech adoption rate globally

India is amongst the fastest growing Fintech markets in the world. Of the 2,100+ FinTechs existing in India today, over 67% have been setup in the last 5 years. 

Indian FinTech industry valued at $ 50-60 Bn in FY20 and is estimated at ~$ 150 Bn by 2025. 

The Fintech transaction value size is set to grow from US$ 66 Bn in 2019 to US$ 138 Bn in 2023, at a CAGR of 20%. 

The Indian Fintech industry ecosystem sees a wide range of subsegments, including Payments, Lending, Wealth Technology (WealthTech), Personal Finance Management, Insurance Technology (InsurTech), Regulation Technology (RegTech), etc.  

The Fintech sector in India has seen cumulative funding of ~$27.6 bn. 

As of October 2021, India’s Unified Payments Interface (UPI) has seen participation of 261 banks and has recorded 4.21 Bn monthly transactions worth over $100 Bn in October’21. 


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    CAGR of Fintech market size in 2025

  • %

    Growth in number of deals from 2021 H1 as compared to 2018 H1

  • %

    CAGR in growth in digital payments transactions from FY19-21

  • %

    Highest expected RoI on Fintech projects globally

More than $23 BN Funding since 2017

Highest Fintech adoption rate globally (87%)

3rd largest FinTech ecosystem globally

Industry Scenario

The Fintech segment in India has seen an exponential rise in funding over the last few years, investments worth more than $8 bn have already been witnessed across various stages of investment in 2021.

While Payments and Alternative Finance segments constituted more than 90 percent of the sector’s investment flows in 2015, there has been a major shift towards a more equitable distribution of investment across sectors since to include InsurTechs, WealthTechs, etc.

India has over 17 Fintechs which have gained ‘Unicorn Status’.

India has seen tremendous growth on the Digital Payments front, clocking a monthly volume of over 5.7 BN transactions worth ~$2 TN (Total Digital Payments) in September’21.  India is home to the highest number of real-time online transactions with 25.5 Bn real time payments transactions in 2020, and is ahead of US, UK and China combined.

The Fintech revolution in India is the culmination of years of effort in laying the groundwork towards developing key enablers through important initiatives:

  • Jan Dhan Yojana: The world’s largest financial inclusion initiative, “Jan Dhan Yojna”, has helped in new bank account enrollment of over 435 Mn beneficiaries for direct benefits transfer and accessibility to a host of financial services applications such as remittances, credit, insurance, and pensions enabling FinTech players to build technology products to penetrate the large consumer-base in India.  
  • Financial Literacy: Some of the recent initiatives towards improving financial literacy in India include setting up the National Centre for Financial Education and implementation of the Centre for Financial Literacy project by the RBI. These steps aim to promote financial education across India for all sections of the population. 
  • E-RUPI: e-RUPI is a person & purpose specific digital payments instrument to allow for contactless & cashless payment solutions and shall play an important role in making the Direct Benefits Transfer more seamless & effective. The solution is being adopted for cashless payments for Covid-19 vaccination.  
  • India Stack: IndiaStack is a set of APIs that allows governments, businesses, startups and developers to utilise a unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery. The India Stack has been the driving force behind the accelerated evolution of Fintechs. It is one of the most important digital initiatives undertaken globally, aimed at putting up a public digital infrastructure based on open APIs to promote public and private digital initiatives and has played a catalytic role in India’s digital foundation and evolution. 



  • Volume of Funds

    High volume of funding from venture capital, private equity and institutional investors driving innovation in the sector.

  • India stack

    Open API platforms i.e. Aadhar, UPI, Bharat Bill Payments, GSTN

  • Technological Innovation

    Implementation of new business models driven by technologies such as Artificial Intelligence and Machine Learning

  • Increasing internet & smartphone penetration

    India has the 2nd highest number of smartphone users globally (550-600 million) and is the 2nd largest Internet user market (795 Mn+ internet users as on Dec’20)

  • Favourable Demographics

    Over 65% of the Indian population is below 35 years. Further India will add 140 MM middle-income and 21 MM high-income households by 2030 which will drive the demand and growth of Indian FinTech space.

  • Financial Inclusion Initiatives

    Financial inclusion programmes such as PMJDY, DAY-NRLM, Direct Benefit Transfer, Atal Pension Yojana among others have accelerated the digital revolution and brought more citizens, especially in rural areas, within the ambit of digital financial services


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Asked Questions

What are the initiatives being taken for the FinTech space in India?

To enable regulated and orderly growth of FinTech ecosystem in India, several steps are being taken by different regulators:


a)    Reserve Bank of India (RBI)
•    Setting up of a regulatory sandbox, which was established based on the recommendations of Working Group on FinTech and Digital Banking, set up by Financial Stability and Development Council - Sub Committee (FSDC-SC). Within the sandbox, the eligible entities can live test their innovative products or services in a controlled environment. RBI Sandbox is based on thematic cohorts; the first cohort was on Retail Payments, the second cohort was on Cross Border Payments, and the third cohort, which was recently opened by RBI, on MSME Lending. To know more about this, please visit the RBI website here.
•    Innovation Hub is an entity set up to promote innovation across the financial sector by creating an eco-system that facilitates access to financial services and products. The Innovation Hub is expected to collaborate with financial sector institutions, technology industry and academic institutions and co-ordinate efforts for exchange of ideas and development of prototypes related to financial innovations, as well as develop infrastructure to promote FinTech research and facilitate engagement with innovators and start-ups. To know more, please click here.
•    HARBINGER 2021-Innovation for Transformation is a global hackathon with the theme ‘Smarter Digital Payments’. The Hackathon invites participants to identify and develop solutions that have the potential to make digital payments accessible to the under-served, enhance the ease of payments and user experience, while strengthening the security of digital payments and promoting customer protection. To know more, please click here.


b)    Securities Exchange Board of India (SEBI)
•    Regulatory Sandbox has been launched by SEBI with the aim to grant certain facilities and flexibilities to the entities  regulated  by  SEBI  so  that  they  can  experiment  with FinTech solutions  in  alive environment and on limited set of real users for a limited time frame. To know more, please click here.
•    Innovation Sandbox will Innovation Sandbox facilitates access to an environment provided  by Enabling  Organizations like Stock Exchanges, Depositories and Qualified Registrar and Share Transfer Agents, wherein innovators would  be  testing  their innovations  in isolation  from the live  market  and  would be used  for offline  testing  of the proposed solution of the applicant. To know more, please click here. You can also visit .

c)    Insurance Regulatory and Development Authority of India (IRDAI)
•    Regulatory Sandbox has been created by the IRDAI with the objective to use innovative ideas to foster growth and increase the pace of most innovative companies, in a way that provides flexibility in dealing with regulatory requirements and at the same time focussing on policyholder protection. Recently, the IRDAI has extended validity of its sandbox regulations by another 2 years. To know more, please visit

d)    International Financial Services Centres Authority (IFSCA)
•    Regulatory Sandbox framework has been launched by the IFSCA. Under this framework, entities operating in the capital market, banking, insurance and financial services space will be granted certain facilities and flexibilities to experiment with innovative FinTech solutions in a live environment with a limited set of real customers for a limited time frame. These features will be fortified with necessary safeguards for investor protection and risk mitigation, and the Regulatory Sandbox shall operate within the IFSC located at GIFT City. For more details, please visit .

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Which are some of the key regulatory authorities that are working towards the development of the FinTech sector in India?

·       RBI – RBI is India's central bank and regulatory body under the jurisdiction of Ministry of Finance, Government of India, and regulates the banking and financial system, payment and settlement systems, the foreign exchange regime, and the currency system.

·       SEBI – SEBI is the regulatory body for securities and commodity market in India under the jurisdiction of Ministry of Finance, Government of India, and regulates the securities market, including securities such as shares, scrips, bonds, debentures, commodities, mutual funds and government securities.

·       IRDAI – IRDAI is a regulatory body under the jurisdiction of Ministry of Finance, Government of India and is tasked with regulating and licensing the insurance and re-insurance industries in India.

·       IFSCA- The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India. At present, the GIFT IFSC is the maiden international financial services centre in India.

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What licenses are required for different activities in the FinTech sector?

For undertaking Banking services or Payments, clearing and settlement services or Lending services – certain licenses / approvals from the RBI will have to be taken. For more information in this regard, please visit

For undertaking Securities trading activities, certain licenses / approvals will have to be taken from SEBI. For more information in this regard, please visit

Depending on the nature of the Investment management / advisory services or Market Provisioning services, approvals may have to be taken from IRDAI or SEBI or RBI or other sectoral regulators.

Cloud-based information technology services may require approvals under the Information Technology Act, 2000 and/or Information Technology (Intermediaries Guidelines) Rules 2011 from the Central Government and/or the relevant Ministry, or other sectoral regulators.

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How is the use of FinTech in alternative finance activities regulated?

•    Peer-to-peer lending - Non-banking financial company-peer to peer (NBFC-P2P) platforms are governed by the NBFC-P2P Lending Platform Directions 2017, issued by the RBI. An NBFC-P2P is defined as a non-banking institution that acts as an intermediary to provide loan facilitation services, whether online or otherwise, to participants. This does not include loan facilitation services for institutional lenders such as banks or NBFCs. Any FinTech activities related to NBFC-P2P, will require approvals from the RBI. 

•    Payment platforms - The Reserve Bank of India has notified Guidelines for the Trade Receivables Discounting System (TReDS Guidelines) setting up an institutional mechanism for financing trade receivables of Micro, Small and Medium Enterprises (MSMEs) from corporate and other buyers including government departments and PSUs. TReDS covers clearing and settlement activities and is regulated as a payment system under the Payment and Settlement Systems Act 2007. For more information in this regard, please click here.

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How are payment services regulated in India?

RBI regulates payments-related activities in India and issues circulars and directions applicable to different payments-related activities. Payment services are regulated under the Payment and Settlement Systems Act 2007. A payment system is defined as ‘a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them, but does not include a stock exchange’. These include credit cards, debit cards, smart cards and money transfers. Any entity interested in commencing a payment system is required to obtain authorisation from RBI.

The payment providers broadly fall under the following categories: payment aggregators and payment gateways, prepaid payment instruments, financial market infrastructure (clearing houses), retail payment organisations, card payment networks (Visa, MasterCard, etc), cross-border money transfers, ATM networks, white-label ATM operators and instant money transfer.

There are three types of prepaid payment instruments: open payment instruments, which are payment instruments that can be used to make a payment to any merchant; semi-closed, which are payment instruments that can be used to make payment to a defined set of merchants; and closed, which are payment instruments of a merchant for payment only to that merchant.

For more information, please click here.

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