“India Is Home To One Of The Fastest Growing Payment Industries In The World”

Reports state that the transaction value for the fintech sector in India was approximately at $33 billion in 2016, and is expected to reach around $73 billion by 2020. This would be after growing at a five-year compound annual growth rate of 22 percent.

All seems to be fine as of now, however, what does the future hold? Catch Akash Sinha, co-founder and CEO, Cashfree, talk about the fintech space in an elaborate conversation with Express Computer’s Gairika Mitra.

How do you think would technology play a pivotal role in boosting the fintech sector of the country?

Rapid advancements in the field of technology have played a crucial role in unfolding India’s fintech landscape. Innovation has been instrumental in driving the wave of change, with players changing their business models to suit the ever-evolving needs and preferences of the market. Now, new fintech players are penetrating this segment to supplement legacy leaders and drive innovation within the banking infrastructure, enhancing flexibility, streamlining movement around money and facilitating process automation. Companies are redefining their offerings to provide experiences rather than mere services. 

Emerging technologies such as Artificial Intelligence, Machine Learning, and predictive analytics, are being implemented to augment efficiency, secure transactions and foster digitization. As a result, the country is now home to one of the fastest-growing payment industries in the world. According to data by NPCI, the value of transactions made through UPI doubled over last year and crossed the Rs 2-lakh-crore mark in December, the first time since its inception. With the rising amount of capital infusion by investors in the digital payment industry, it is safe to say that we are just getting started. 

That being said, do you think India would need to cope up fast to equip itself with the technical advances?

With a massive rise in UPI transactions, India is inching closer to becoming a cashless economy, but the dream is still incomplete. Government initiatives in line with industrial innovations together have laid the foundation for a digital India. There is a need for further incentives and awareness to facilitate and drive the adoption of technology in India, especially rural and remote locations where internet accessibility could remain a challenge. The introduction of features such as offline payments could be a huge advantage for this segment, driving stimulating mass adoption.

Nevertheless, as the market evolves and new players enter the space with innovative offerings, we foresee it rendering a complete, ‘Digital’ India. 

What are the immediate and long-term milestones for Cashfree in terms of scaling up?

At Cashfree, we are working towards rebuilding and upgrading India’s payments and banking space, to tackle the spectacular growth of digital payments in the country. We are working closely with banks to help them process large volumes of transactions and rejig their traditional financial framework. 

We currently process more than $10.5 billion transactions per annum and expect this to go up to USD 10 billion worth of payments in the current financial year.  After setting up offices in four cities in India, we have a plan to enter markets such as Hyderabad, as a large number of business enquiries have surfaced from merchants in the city. Our goal is to grow our headcount to 250 people by the end of 2020 (from 105 as of January 2020). Presently, we work with over 55,000 merchants and target to reach 5 lakh merchants (10x more) by the end of the year. 

Apart from exploring overseas opportunities, we also have plans to enter the insurance and lending space. We will eventually branch out to other segments by diversifying our offerings to cater to a larger target group.

Where do you think is the fintech space would be heading in India in the upcoming years?

Currently, over 300 million digital transactions take place in India and we believe that there is further scope for 70 – 80% growth in this number. We expect innovation and emerging technologies to revolutionize the industry further. The fintech space has transformed into a hub of competitive and innovative offerings and flawless experiences catering to diverse cliques. 

While attracting customers through first-time user rewards has gone a long way in paving the way for a cashless economy and Digital India. Machine learning, blockchain, data science, and predictive analytics are other emerging technologies that will further shape the payments space-enhancing fraud mitigation and security while assisting businesses in decision-making and problem-solving processes. Robo Advisers or advanced robotic process automation (RPA) will also be a big boost to the effectiveness of financial institutions. 

What is the concept of ‘Payouts’ all about? Is it only targeted towards the digital-savvy audience?

Payouts is Cashfree’s API based banking solution, an automated way to send money in bulk to any company’s bank account in India, instantly in real-time, 24×7 and even during bank holidays. Simple and easy to use, businesses use Payouts to send money to other bank accounts, cards, Amazon Pay, Paytm and UPI IDs. It is used by merchants for money disbursals such as salary payment, vendor payment, loan disbursals, rewards payment, on-demand wage payment etc. 

What sort of leverage are you gaining from the banks?

We have begun testing our new offerings by partnering with major banks. Our joint go-to-market strategies are enabling businesses to adopt new products & solutions faster. 

Kindly elucidate on your collaboration with HDFC, Kotak and IndusInd bank

Through strategic partnerships with some of India’s leading banks such as HDFC, Kotak and IndusInd bank etc.., Payouts allows Cashfree’s merchant partners to have a higher success rate for online transactions. With multiple banking partnerships, Cashfree creates a seamless banking experience for businesses, ensuring real-time digital payments.