Fintech is having its big moment.
The pandemic given a fillip to any industry with the word ‘tech’ in it – as the world becomes wary of physical spaces and connections. And when you club tech with finance, you essentially are on board a rocket ship (mostly).
Australia-based Afterpay is a case in point. An online service that lets shoppers from different parts of the world pay for smaller items (shoes, shirts etc) in interest-free payments over six weeks, its shares went up almost ten times after the lockdown – vaulting its founders into the billionaire club. CredAble, a leader in the supply chain financing space in India founded in 2017, is another example. The company met its year-end targets within the first few months of the pandemic, said Nirav Choksi, CredAble’s CEO and co-founder.
These are, of course, not alone. An analysis done by Forbes revealed that some five fintech entrepreneurs have made it to the billionaire rankings due to the pandemic – little known names like Chris Britt, who founded a digital bank called Chime, and Baiju Bhatt and Vlad Tenev, the co-CEOs of Robonhood, the free stock trading app – have now shot to fame, thanks to their newly acquired status.
Then there are the big players like Paytm and Google Pay, which have grown exponentially during the Covid era. In July this year, Vijay Shekhar Sharma, Paytm’s well-known founder, announced that the company was witnessing more than three times growth in transactions, as users turned to the safety of digital payments. This is not the first time that the fintech behemoth has recorded high transactions. Its stratospheric growth started in 2016 with demonetization, which steered the move towards a cashless society.
Over the years, fintech technology or fintech has become increasingly important for both consumers and businesses across the world. Its benefits can be increasingly felt in our everyday lives, as people do more and more transactions online – from paying utility bills, buying groceries, recharging mobile connections, to booking travel and events online. Fintech, thus, has enhanced financial inclusion, improved efficiency, and broken down physical barriers in the real world.
According to an IMF study, the level of digital financial inclusion has improved considerably over the years due to the emergence of powerful platforms, such as M-Pesa in Kenya, Alipay and WeChat Pay in China and Paytm in India. The efficiency of banking and finance operations has also improved, driven by fintech, from which many have benefited.
So, what does the future of fintech look like in the post-pandemic world?