Why are global tech giants flocking to the Indian FinTech market?

By Puja Sharma

The FinTech industry in India is witnessing an exhilarating surge, backed by significant investment and technological advancements. According to a recent Bain report, India’s FinTech investment has soared, with approximately $35 billion poured into various segments, establishing India as a formidable player in global FinTech funding since 2016.

Amidst this dynamic growth tech giants are venturing into the Indian financial realm. One such notable example is Apple, the iconic tech pioneer, which is now making waves with its much-anticipated offering, the Apple Credit Card in India. This game-changing move is sparking intrigue and conversation about its potential impact on the existing FinTech landscape

Gaurav Chopra, Founder & CEO of IndiaLends said,“India has amongst the lowest credit penetration amongst its global peers. Global players entering the market will only help expand an already growing market, faster. The onus would be on the Indian players to leverage their deep understanding of the consumer preferences as well as risk parameters to offer competitive products with an exceptional experience. India remains a low ticket size market and that’s where a combination of depth in risk assessment of local players with the breadth of brand reach of global entrants can prove to be a winning model”

The strategic moves of global giants like Apple and their potential to reshape the financial landscape for both consumers and industry players

“The foray of a global Tech behemoth player in India’s FinTech landscape holds the potential to reshape the financial landscape for both consumers and industry players. India has emerged as Apple’s fifth-largest iPhone market, after the USA, UK, Japan, and China. It currently commands a 5.1% market share of India’s total smartphone market.” said Mohit Bedi, Co-founder & CBO of Kiwi.

Its foray will play a significant role in getting their credit-worthy customers under the credit gamut. In the US, Apple also has wallets with Apple Pay, especially NFC payment solutions like Buy Now, Pay Later, etc. Interestingly, in the past, the “Pay-Later” market that was floundering in the US had just turned on its head once Apple launched Pay-Later on the checkout page.

For a financial ecosystem that is so mature in India and well regulated, any global player that is eyeing India’s fintech landscape will have to adhere to the regulatory requirements. There have been very clear guardrails for co-branding, digital lending, etc.

The impact on existing FinTech players in India, including startups, financial institutions, and credit card platforms

Bedi further added, “India’s rapidly growing economy and large population present a significant demand for credit and financial services. The Indian credit market is evolving, and there is room for multiple players to step in and cater to the diverse needs of consumers and businesses.”

For instance: with the monthly expenditure on UPI P2M transactions amounting to approximately Rs. 3.2 lakh crore, which is almost 2.5x larger than the monthly credit card spends, Kiwi, through its “credit cards on UPI” offering, capitalises on a significant untapped market. Moreover, the number of unique UPI users is more than 100 times the number of existing card users in India, and the acceptance points for ‘Credit on UPI’ are anticipated to be five times larger than regular credit card acceptance points.