India - A global FinTech Superpower
India has the highest FinTech adoption rate globally
India is amongst the fastest growing FinTech markets in the world. India ranked the highest globally in the FinTech adoption rate with China. Digital payments value of $65 bn in 2019 is expected to grow at a CAGR of 20% till 2023.
The overall transaction value in the Indian FinTech market is estimated to jump from approximately $65 bn in 2019 to $140 bn in 2023. India has overtaken China as Asia’s top FinTech funding target market with investments of around $286 mn across 29 deals, as compared to China’s $192.1 mn across 29 deals in Q1 2019.
Key growth drivers include:
- Widespread identity formalisation (Aadhar): 1.2 bn enrolments
- High level of banking penetration through the Jan Dhan Yojana: 1+ bn bank accounts
- High smartphone penetration: 1.2 bn mobile subscribers
- India Stack: Set of APIs for businesses and startups
- Growing disposable income
- Key government initiatives such as UPI and Digital India
- Wide middle-class expansion: By 2030, India will add 140 mn middle-income and 21 mn high-income households which will drive the demand and growth on the Indian FinTech space;
- The country attracted $1.46 bn in fintech investments during the first half of 2020, which is a 60% jump compared to $919 million for the same period in 2019.
Key segments within the FinTech space include Digital Payments, Digital Lending, BankTech, InsurTech and WealthTech.
- $ bn
FinTech software market size
Investments in FinTech (2016-2020)
- $ bn
Digital payments through UPI (2018)
Highest expected RoI on Fintech projects globally
Highest FinTech adoption rate globally
2nd highest funded sector (after E-commerce)
3rd largest FinTech ecosystem globally
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
FinTech in India is expected to increase at a CAGR of 20.2% during 2017-21 to reach $92 bn
The Fintech industry in India is categorised into 4 major segments namely WealthTech, Payments, Lending and InsureTech.
The WealthTech Industry in India is witnessing the emergence of startups with innovative technologies and business models. Growing personal wealth, increased adoption of mobile & digital channels, reduced asymmetry of information between small & large financial institutions and investors, are some of the factors propelling the industry forward.
Digital payments have been the flag bearer of the Indian FinTech space. In 2010, India launched its first real-time payments systems ‘IMPS’ and introduced UPI in 2016. There are 375 Payment startups in the country. Mobile/digital wallets, gateways, POS/ mobile POS sub-segments account for over 50% of the payment startups in India. In 2020, online transactions grew by 80% in India as compared to 2019.
India will contribute 2.2% to the world’s digital payments market by 2023, and the value of such transactions is expected to reach $12.4 tn globally by 2025.
In consumer credit, the urban population is likely to leverage FinTech lending services to avoid heavy documentation, and the rural population (which is new to credit) can benefit from alternative credit scoring mechanisms to stay away from loan sharks.
The scope of IoT in Indian Insurance goes beyond telematics and customer risk assessment. Currently, there are 110+ InsureTech start-ups operating in India.
Jan Dhan - Aadhar - Mobile
JAM Trinity enabled Govt. to make direct transfers of INR 740 bn
Open API platforms i.e. Aadhar, UPI, Bharat Bill Payments, GSTN
Favourable Govt. initiatives
Digital India, National Payments Council, tax benefits on surcharges etc.
Blockchain market in India is expected to grow at a CAGR of 37% till 2024
GoI's flagship initiative to build strong start-up ecosystem in India
Biometric identification database - more than 1.2 bn citizens enrolled
New business models
Implementation of new business models driven by technologies such as Artificial Intelligence and Machine Learning