India's fintech landscape, ranked as the third-largest on a global scale, is anticipated to achieve an annual revenue of $70 billion by FY30, constituting 18–20 per cent of the addressable financial services revenue pool. Boasting over 9,000 fintech entities, India stands as the host to the third-highest quantity of fintechs worldwide and commands a 14 per cent share of start-up funding within the country. Additionally, the report predicts that the fintech industry is on track to yield $400 billion in value creation by 2030, signifying a quadruple increase from its present state.
Funding has tripled from 2018 to 2022. Currently, fintech companies dominate digital payment transactions, with their share experiencing a 2.3-fold increase in FY22 compared to FY19. The Fintech sector received funding of $2 billion in 2023.India solidified its position as a major player on the global stage by ranking 3rd globally in 2023 for fintech startup funding. The Indian FinTech landscape has established itself as a powerful global influence and persists in expanding as one of the foremost FinTech markets worldwide. India has broadened its fintech reach with the launch of Unified Payment Interface (UPI), RuPay services in Sri Lanka and Mauritius. Earlier UPI commenced its operations in France.
The implementation will streamline UPI settlement services for Indian citizens journeying to Sri Lanka and Mauritius, and also for Mauritian nationals during their visits to India. Furthermore, the expansion of RuPay card services in Mauritius will empower Mauritian banks to issue cards using the RuPay mechanism, enhancing smooth transactions between India and Mauritius. Last year India has proposed to provide technology patented by the Indian central bank known as UPI, free of cost to Central Asian countries for their independent use. Such a system will greatly enhance commercial linkages and benefit people who may have to travel to India for medical treatment. It will also help businessmen and Indian students who are studying in those countries.
Moreover, in February 2023, PhonePe, a prominent Indian digital payment and fintech firm, introduced cross-border UPI payments under UPI International. This feature allows users to utilize their Indian bank accounts for transactions at merchant outlets in the UAE, Singapore, Mauritius, Nepal, and Bhutan. At present, India is setting the template for the rest of the world with its innovative models in fintech and financial services.
The share of insurtechs, specifically in sectors such as motor insurance, has grown 5x from FY19 to FY22.
Google India Digital Services and the National Payments Corporation of India, the innovator behind UPI, have entered into an agreement to expand the reach of UPI's services beyond the borders of India. The collaboration aims to enhance the ease of payments for Indian travellers outside the country and lay the groundwork for UPI-inspired payment systems to be adopted globally. UPI stated, "This aligns with NPCI's commitment to strengthening India's presence in the international digital payment arena." The partnership will also contribute to streamlining remittances by reducing reliance on traditional money transfer channels.
The fintech sector presents significant growth opportunities, particularly in emerging markets, as 1.5 billion adults worldwide remain unbanked, and an additional 2.8 billion adults are underbanked. A recent report from IIFL FinTech emphasized India's status as a global fintech powerhouse, projecting its fintech market to surpass US$ 1 trillion by 2030.
Fintech enterprises in India provide a diverse range of products and services encompassing credit (lending), payments (P2C and P2P), investments, trading, personal finance, wealth management, credit ratings, insurance, and more. India boasts one of the most dynamic fintech sectors globally, and its growth prospects remain promising. With nearly half of the country yet to access online services, the sector is poised for further expansion, especially as India embraces the 5G era in the coming decade.
Various sub-sectors within fintech have surfaced and gained traction among major players in the global financial sector. The Indian financial services industry has entered the realm of digital transformation, swiftly closing the gap with its international counterparts in terms of adoption. Numerous fintech hubs have developed worldwide, including but not limited to the US, the UK, Israel, Singapore, Hong Kong, and Sydney. These hubs could potentially serve as benchmarks for the evolution of fintech in emerging markets. Indian fintech revenues expected to grow at 35%+ annually to reach $190 billion plus revenues by 2030. In the evolving Indian Fintech landscape, key priorities include: focusing on fiscal prudence and sustainable profitability, harnessing emerging technologies like GenAI for functional solutions, establishing a clear policy framework defining roles and responsibilities, fostering private innovation within DPI 2.0 for inclusion, and seizing growth opportunities in embedded finance, BaaS 2.0, CBDCs, and contextual lending.
Releasing the report during its Annual Meeting 2024 in Davos, the World Economic Forum said fintech’s are increasingly expanding operations across borders, mainly in the same region as their headquarters. The study reveals that vibrant hubs such as Singapore, the UK, the US, and India have hosted a thriving cluster of fintech corporate headquarters. Among the countries surveyed, the most significant operating countries for fintech’s include the US, the UK, Singapore, Mexico, and India.