The fintech environment in India
In recent years, the fintech ecosystem has been on an accelerated journey, with India emerging as one of the leaders of consumer fintech adoption at 87 percent . This can be attributed to the country’s rapidly changing demographics and consumer behaviour. The government’s efforts to create a digitalised economy and boost financial inclusion, coupled with strong support from a forward-looking regulator, has been a primary reason for this acceleration.
In this thriving environment, Visa decided to launch the Visa Everywhere Initiative (VEI) in India so fintechs could rise up to the needs of today’s payment ecosystem and solve for challenges unique to the country. This was not our first fintech focused program in India – in the past 3 years, we have deepened our engagement with Indian fintechs and launched Visa Developer Platform, Visa Ready and Fintech Fast-Track programs to provide access to Visa’s global scale and platform capabilities. However, VEI is by far the biggest fintech outreach program for Visa, not only in India but also 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 travelled over 100 countries and six continents. Over 6,000 fintech startups have been engaged, that have gone on to raise around $2.5 billion in funding. With India’s culture of innovation in the digital solutions space, it was opportune to bring VEI to India and provide them a platform for the next phase of growth.
The India edition of VEI was customized for deep engagement with fintechs while solving for digital payment challenges in India. In fact, it had an exciting and engaged progression starting with roadshows for effective outreach and going on to mentorship programs, pitch days and a grand finale. The rationale behind this kind of a journey was to ensure multiple touchpoints and guidance with the participating fintechs throughout the process.
The challenges posed to fintechs were framed in sync with the biggest roadblocks to digital growth. Keeping this thought in mind, we chose the following challenges:
Beginning the adventure: VEI journey
Spanning over the last nine months, the VEI journey has been one-of-its-kind. Back in December 2019, we started with roadshows in five cities across the country to get fintechs acquainted with VEI and the achievements of fintech veterans like Jitendra Gupta, Upasana Taku, Harshil Mathur and Ravi Narayan. The roadshows were a massive success with over 400 registrations from 260 different fintechs, the best showing outside of the US. The fintechs - ranging from early stage to mature, came from various parts of the country – stemming from both small-town and urban locations. Setting up fintech roadshows in 4 metros (Mumbai, Bengaluru, Delhi, Hyderabad) and 1 small town (Sambalpur), was an “India first” idea for VEI. It allowed us to meet and connect with more and more local fintech founders. We were able to have some engaging conversations on how they were leveraging digital payments to transform business models in different industries. We started to realise these forums were now more than presentations or coffee sessions - in fact, VEI was fast becoming a platform to inspire fintechs. Not surprisingly #InspireIndianFintechs became a VEI slogan on Twitter.
The next challenge was to equip those fintechs with inputs and resources to bring their concepts and solutions to life. For this, Visa designed a mentorship program that proved to be pivotal in guiding the fintechs. Experts from across Visa verticals joined hands to provide guidance and technological support to the participating fintechs in each challenge.
Following the mentorship program, we conducted pitch days where fintechs pitched their solutions and presented a proof of concept to Visa. The same was followed by the grand finale by way of the Demo Day.
The trails and treasures along the way
As we started engaging with fintechs, we too learnt along the way. With fintechs being at various stages of maturity, we identified two central problem areas – enabling the right outreach for fintechs and equipping them with suitable APIs. To illustrate how VEI will grow their business and enhance the ecosystem, we took the unconventional route and integrated it in our roadshows and fireside chats in each city. Our experience with VEI in other markets too came in handy with the deployment of an always-on approach and global best practices.
Fintechs also had access to the Visa Developer Portal and Visa’s APIs. This, coupled with the mentorship, helped them leverage the technology and scale of Visa assets.
India’s first VEI edition witnessed many new innovative solutions with potential to accelerate usage of digital payments. Some looked at complete transformation of the value chain for essential everyday services like delivery of milk and newspapers, some at assistance to micro businesses like tuition centers and Zumba training academies by means of radical payment solutions, digital transformation of agriculture-related businesses and even support solutions like video KYC. We also witnessed fintechs using available infrastructure for debit-card based installment loans or lending on prepaid cards – to further credit access in the country.
Overcoming the COVID-19 roadblock
The VEI journey in India began late last year. Before we could conduct a large scale, on-ground finale, the COVID-19 crisis brought life to a standstill with a nationwide lockdown. But like everything else, we took this in our stride and pivoted to organize the Demo Day virtually, in collaboration with CNBC TV18.
This unexpected crisis also proved to be a catalyst to the ultimate purpose of VEI – with solutions that were the need of the hour, could be scaled for mass adoption and would tackle futuristic needs in the post-COVID era.
The role and need of innovation inducing platforms
The onus of streamlining the way India pays and making the transformation from physical to digital is incumbent on symbiotic collaboration between fintechs and larger financial services companies. Established corporations and banks have the experience, brand recall, legacy and customer trust while fintechs bring in the new-age expertise and nimbleness needed to make the leap into the digital space.
Fintechs also widen the scope by recognizing newer value chains to be digitized. We have guided them as part of the VEI journey and recognized their potential. We also supported them with a comprehensive overview of technology integration, the 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, customer-friendly and radical solutions.
VEI acted as a catalyst to an ongoing technological revolution in payments. 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 pivotal to enhancing consumer payment experience.
Across the globe, Visa envisions collaborations between traditional banks and fintechs as being transformative to the industry and is playing its part in facilitating such partnerships, We expect this trend to grow in the coming years with more banks and fintech players coming together to innovate.
As a result of the Visa Everywhere Initiative, we have a strong pipeline of fintechs and enthusiastic banking partners with whom we will collaborate and innovate to augment the way consumers and businesses pay and be paid.
Through these efforts, we will continue to accelerate India’s vision to create a digitalised economy and boost financial inclusion.
Authored by: Arvind Ronta, Head of Products, India & South Asia, Visa
This is a partnered post.
First Published: IST