Fintech Newsletter May 2021 fintech highlights of the month 001

RBI makes mobile wallet interoperability mandatory from FY23

RBI has issued this -notice to explain the regulations introduced during the April 7 Monetary Policy Committee meeting. Customers of full KYC-compliant PPIs (prepaid payment instruments) issued by non-bank PPI issuers can withdraw a maximum of INR 2,000 per transaction and INR 10,000 per month per PPI. PPI issuers offering these facilities will have to ensure proper customer redressal mechanisms.

Expert View

Indeed, towards accomplishing its avowed mission of Empowering Exceptional payment Experience (EEE), Reserve Bank of India has been taking appropriate and measured steps from time to time. But the recent thoughtful and flexible policy articulated in RBI’s Circular of 19th May, 2021 on Prepaid Payment Instruments (PPIs) clearly stands out for its immense potential to set off the required impetus for rapid growth & popularity of PPIs in India.

The three significant measures taken by the Reserve Bank of India are, increasing Account Balance Limit from INR 1 lac to INR 2 lacs, permitting Cash Withdrawal from full KYC PPIs of non-bank PPI issuers and mandating interoperability of Full KYC PPIs through UPI and authorised Card Networks.

In point of fact, the above steps enrich the PPI Wallet offerings in abundant measure besides helping in significantly bridging the wide gap that currently exists across certain segments of the populace. The said new flexible measures are a boon to, inter alia, those who find it arduous to go through the regular banking system while looking forward to easily accessible low cost, low maintenance but a fully secure system to perform electronic transactions.

It is heartening to see the country’s Central Bank coming up with such wide-ranging, transformational, customer centric initiatives that are most likely to further hasten digital transformation. Now, it is imperative for (non-bank) PPI issuers to play their vital role as catalysts of change on the ground.

To sum up, the well-intended measures taken by RBI are not only noteworthy, but also praiseworthy, to say, the least.

S.R. Vijayakumar, CEO, Transaction Analysts (India) Pvt. Ltd.

fintech newsletter may 2021 UPI for cause

Unicorns show the light: From FinTech and Pharma to green energy they are driving solutions even amid the pandemic

The ferocious second wave of Covid-19 has brought with it gloom and uncertainty as the virus mutated, surged and engulfed the nation. A Credit Suisse report on Indian unicorns, released in March 2021, had articulated that “due to a remarkable confluence of changes in the funding, regulatory and business environment, there has been an acceleration of 100 unicorns in India with a combined market capitalisation of $240 billion.” Today, India has the third-largest number of unicorns globally.

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India’s active internet population likely to touch 900 Mn by 2025

India’s active internet user base stood at around 622 million in 2020 which translates to about 43% of the total population across both urban and rural India. Internet user base in rural areas has been growing at a faster rate on a year-on-year basis when compared to urban India, The IAMAI report also found that nine out of ten active internet users access the internet every day.

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Salary, pension, dividends, other payments and investment through NACH to be available on all days

Salary, pension, interest, dividend and other payments and investments through the National Automated Clearing House (NACH), a bulk payment system operated by NPCI, can be done on all days of the week from August 1, 2021 according to RBI’s statement on “Developmental and Regulatory Policies” released on June 4, 2021.

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Movies and Streaming - The next frontier for NFTs

NFTs offer the opportunity to reintroduce collectible movies and TV shows. As the NFT hype of early 2021 begins to recede, many sectors are examining opportunities to capture some of the value that’s been poured into digital art NFTs.

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Future of Money—Digitalisation will help in value creation

As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India

In the decades of 2001-10 and 2011-20, there was an incremental value creation of about $1 trillion per decade.. This created a market cap of around $2.5-2.7 trillion, combining both public and private markets by the end of 2020. By the end of the current decade, there will be an additional value creation of $7.5-8 Trillion. This value will be driven by three key forces: Digitisation, large-scale manufacturing and business sustainability. 50 percent of the incremental value creation will be driven by digital business models, which will account for 30 percent of the total value of the market that we will see by the end of 2030.(instead of decade check if you can write 2030).

Report of the month


Covid-19 pandemic fuelled digital payment modes - RBI Annual Report

Overall, the total digital transaction volume in 2020-21 stood at INR 4,371 crores, as against INR 3,412 crores in 2019-20, attesting to the resilience of the digital payment system in the face of the pandemic.

The report noted that the prospects for FinTech in India’s financial system in 2021-22 will depend upon the degree of entrenchment of digital usage, which in turn, contingent upon the resilience of the underlying acceptance infrastructure, financial literacy and awareness of the users and strengthening of the customer protection and cyber security protocols in place.

Also, various initiatives such as an innovation hub, a regulatory sandbox and offline payment solutions are underway to ensure that in the digital ecosystem, India maintains its position as a leader.

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