The fintech environment in India
In recent years, the fintech ecosystem has seen an accelerated journey, with India becoming one of the leaders in consumer fintech adoption with 87%. This can be attributed to the rapidly changing demographics and consumer behavior in the country. The government’s efforts to create a digital economy and boost financial inclusion, coupled with strong support from a forward-looking regulator, have been one of the main reasons for this acceleration.
In this flourishing environment, Visa decided to launch the Visa Everywhere (VEI) initiative in India so that fintechs can meet the needs of the current payments ecosystem and solve the challenges unique to the country. This was not our first fintech focused program in India – over the past 3 years we have deepened our engagement with Indian fintechs and launched the Visa Developer Platform, Visa Ready and Fintech Fast-Track programs to provide access to the global scale and capabilities of the Visa platform. However, VEI is by far the largest fintech awareness program for Visa, not only in India but also in Asia Pacific.
Crossing the first threshold: why and how Visa brought VEI to India
The global fintech ecosystem is no stranger to VEI. The numbers themselves have a story to tell. Launched in 2015, this initiative has traveled to more than 100 countries and six continents. More than 6,000 fintech startups were hired, which then raised around $ 2.5 billion in funding. With India’s culture of innovation in digital solutions, it was timely to bring VEI to India and provide them with a platform for the next phase of growth.
The Indian edition of VEI has been customized for deep engagement with fintechs while solving digital payment issues in India. In fact, it has had an exciting and engaged progression, starting with effective outreach tours and mentoring programs, pitch days and a grand finale. The rationale for this type of trip was to ensure multiple points of contact and guidance with participating fintechs throughout the process.
The challenges posed to fintechs have been framed in line with the biggest obstacles to digital growth. With this thought in mind, we have chosen the following challenges:
- Digital issuance to facilitate access to payments and credit to facilitate the onboarding of new clients and foster financial inclusion through payments and loans
- Stimulate the growth of small traders to facilitate merchant integration and improve the payment experience at points of sale
- Digital transformation of the B2B payments value chain by digitizing accounts receivable, accounts payable and supply chain finance for different industries
Beginning of the adventure: VEI trip
Over the past nine months, the VEI course has been one of a kind. In December 2019, we started with roadshows to five cities across the country to familiarize fintechs with VEI and the achievements of fintech veterans like Jitendra Gupta, Upasana Taku, Harshil Mathur and Ravi Narayan. The roadshows were a huge success with over 400 registrations from 260 different fintechs, the best performance outside of the US. The fintechs – ranging from early stage to maturity, came from various parts of the country – from both small towns and urban areas. The implementation of fintech roadshows in 4 metros (Mumbai, Bengaluru, Delhi, Hyderabad) and 1 small town (Sambalpur), was an “India first” idea for VEI. This allowed us to meet and get in touch with more and more local fintech founders. We were able to have engaging conversations about how they are leveraging digital payments to transform business models across different industries. We started to realize that these forums were now more than presentations or coffee sessions – in fact, VEI was quickly becoming a platform to inspire fintechs. Unsurprisingly, #InspireIndianFintechs has become a VEI tagline on Twitter.
The next challenge was to equip these fintechs with the inputs and resources to bring their concepts and solutions to life. To do this, Visa has designed a mentoring program that has proven to be essential in guiding fintechs. Experts from all of Visa’s verticals have teamed up to provide advice and technology support to participating fintechs on every challenge.
Following the mentoring program, we organized presentation days where fintechs presented their solutions and presented a proof of concept to Visa. The same was followed by the grand finale through the Demo Day.
Trails and treasures along the way
When we first started engaging with fintechs, we also learned along the way. As fintechs are at various stages of maturity, we have identified two central issues: enabling the proper awareness of fintechs and equipping them with appropriate APIs. To illustrate how VEI will grow its business and improve the ecosystem, we’ve taken the unconventional route and integrated it into our roadshows and fireside chats in each city. Our experience with VEI in other markets has also proven useful with the deployment of an ongoing approach and global best practices.
Fintechs also had access to the Visa Developer Portal and Visa APIs. This, combined with the mentorship, has helped them take advantage of Visa’s technology and asset scale.
The first edition of VEI in India witnessed many new innovative solutions that can accelerate the use of digital payments. Some have envisioned a complete transformation of the value chain for essential day-to-day services like milk and newspaper delivery, others support micro-businesses like Zumba training centers and academies through Zumba training solutions. radical payments, the digital transformation of agriculture-related businesses and even support for solutions like KYC video. We have also seen fintechs use the infrastructure available for debit card installment loans or prepaid card loans – to improve access to credit in the country.
Overcoming the COVID-19 roadblock
The VEI trip to India started late last year. Before we could conduct a full-scale final on the ground, the COVID-19 crisis brought life to a standstill with a nationwide lockdown. But like everything else, we took that in our stride and pivoted to virtually host Demo Day, working with CNBC TV18.
This unexpected crisis also proved to be a catalyst for VEI’s ultimate goal – with solutions that were the need of the hour, could be scaled up for mass adoption, and would meet the futuristic needs of the world. post-COVID era.
The role and need for innovative platforms
The responsibility for streamlining the way India pays and moving from physical to digital lies with a symbiotic collaboration between fintechs and large financial services firms. Established businesses and banks have the experience, brand recall, legacy and trust of customers, while fintechs bring the new-age expertise and agility to take the leap into the digital space. .
Fintechs are also widening the field of action by recognizing the new value chains to be digitized. We guided them on the VEI journey and recognized their potential. We also backed them up with a comprehensive overview of technology integration, risks and nuances of customer experience, and regulatory considerations. Visa will continue to play a key role in strengthening our network through such partnerships between fintechs and banks.
The evolving role of fintechs
We firmly believe that fintechs will drive new business models and must adapt to the new normal with innovative, user-friendly and radical solutions.
VEI has acted as a catalyst for an ongoing technological revolution in payments. The digital experiences developed by fintechs are changing the way products and services are consumed. Fintechs also hold the key to new age technology and use cases, which are critical to improving the payment experience for consumers.
Around the world, Visa sees collaborations between traditional banks and fintechs as an industry transformation and is playing its role in facilitating such partnerships. We expect this trend to grow in the coming years with greater number of banks and fintech players who will come together to innovate.
Through the Visa Everywhere initiative, we have a strong portfolio of enthusiastic fintechs and banking partners with whom we will collaborate and innovate to increase the way consumers and businesses pay and will be paid.
Through these efforts, we will continue to accelerate India’s vision of creating a digital economy and driving financial inclusion.
Written by: Arvind Ronta, Product Manager, India and South Asia, Visa
This is a partnership article.