PayKun Payment Gateway : Cracking India's $5 Trillion Mystery - Fintech and MSMEs are the key

The 1991 reforms signalled India's transformation from a $513bn economy to a $3.5trn giant by 2022. 2016, on the other hand, can be seen as the starting point of a fintech revolution that will propel India to become the world's third largest economy by 2030.

From facilitating digital payments to helping small startups become unicorns, fintech has unlimited potential to unleash India's entrepreneurial spirit and change the way business is done in the country.

Financial Inclusion and Mainstreaming the Informal Sector in India

If India is to become a $5 trillion economy by 2027, it is important to focus on key areas such as financial inclusion enhancement and mainstreaming of India's informal sector. India's informal sector accounts for 501 TP3T of GDP and employs about 801 TP3T of labour.

While the size of the informal sector is a major challenge, it also represents a huge opportunity to accelerate India's dream of becoming a developed economy. It all depends on our ability to mainstream it quickly and effectively. This transformation cannot be achieved without wider and faster adoption of fintech solutions. Fintech has popularised financial products and incentivised companies to join the formal sector. FinTech helps the informal sector to recognise this shift as a smart and profitable business decision, rather than an avoidable complication.

Payment solutions and fast credit are probably the most compelling aspects of fintech. Other solutions, such as insurtech and digital banking, can help businesses realise their full potential in the shortest possible time.

Technology as the great equaliser

The combination of technology and financial services has created a level playing field where the ability of firms to innovate and adapt to changing trends has become more important than traditional parameters such as location, size or gender of the owner.

With fintech, a woman running a small business in a tier 3 city can have the same access to affordable working capital loans, strategic investment advice, wealth and investment solutions, or a safer, more robust payments infrastructure as a multinational company located in a metropolis.

Fintech, by complementing and complementing traditional financial institutions and service providers, can solve or make irrelevant the numerous challenges and obstacles faced by Indian entrepreneurs.

Serving the masses and market segments

Fintech is inherently disruptive and innovative, which means it eschews a one-size-fits-all approach to serving customers.

This means that every client - whether they're home office freelancers, casual workers, startup founders, or traditional wage earners - has access to solutions that help their business grow.

All disruptive businesses - from WhatsApp to Tesla - start with niche and unconventional ideas. FinTech has the ability to cater for traditional businesses and their evolving needs and requirements, as well as radical ideas that could change the world as we know it.

Solutions for today and tomorrow

Every business needs to focus on short-term goals within a clearly defined long-term vision or strategy. It needs to adapt to temporary challenges while equipping itself to respond to paradigm shifts in the industry and the economy.

FinTech is the best tool to address this challenge as it too is evolving. Fintech is likely to be primarily associated with digital payment solutions that help reduce costs for businesses, improve customer experience and enhance compliance.

However, the true value of fintech is that it is both innovative and scalable. A business expanding its digital footprint has easy access to reliable customised solutions that meet its unique needs.

From aggressive strategies in boom times to conservative but growth-focused solutions in tough times, FinTech combines the best features of financial services and technological innovation to help organisations seize the present and plan for the future.

PayU - Committed to the India Growth Story

At PayU, we're proud that over 450,000 merchants and businesses have chosen us as their FinTech partner. However, our biggest achievement is that this number covers all types of businesses - from large corporates and start-ups to small and medium-sized business owners.

We believe that India's $5 trillion target is just the beginning and that India has the potential to achieve faster, more sustainable and broader economic growth by harnessing technology with the entrepreneurial talent inherent in every Indian.