Demonetization has caused a huge furor in India of late. Whether it is a farmer on an English news channel wailing about his crops (which happens a lot around this time of year!), or it is the opposition party leader, trying to get his share of the screen time. But for a small group of startups and entrepreneurs, demonetization is all silver linings and no cloud (for Fintech companies).
Fintech startups in India have been thought of as a sunrise industry of late. These startups never got the spotlight before now. Even the most marketable and well known ones such as Paytm were forced to sponsor a cricket event in order to gain a bit of publicity. But all that changed when Prime Minister Narendra Modi announced demonetization in the first few weeks of November. The tweet from Paytm’s twitter handle was an indicator of how much this move meant to these companies. They tweeted “we have 2 words. Paytm Karo”. Quite prophetically, millions across the nation soon started employing the services of Paytm, Freecharge, Mobikwik and other Fintech companies which helped make cashless transactions one step closer to reality in India. Read more on Mobile Wallets
E-wallet companies like Paytm, PayUIndia, Mobikwik, and Freecharge are seeing unprecedented growth and significant rise in GMV (Gross Merchandise Volume) since November 8. Experts believe that this move is going to positively impact the workforce and hiring needs of these companies. Besides, technology roles will now open up as these companies rush to meet the surge in transactions and there is likely to be a huge opportunity in other functions such as sales and marketing as well. Because of the shortfall in valid notes in the country, retailers across the country are switching to these startups and their apps for their cash transactions. “We have observed unprecedented growth. Our user base has grown to 40 million and we have added 1, 50,000 merchants, which makes us directly available at 2, 50,000 retailers now,” Mrinal Sinha, COO at Mobikwik, said. Previously, only select urban vendors and sellers would have been open to Fintech apps like these. But now, most of the urban retailers are choosing these routes to sell goods and even in the semi rural centers of the country, these apps are gaining in popularity.
This is encouraging other Fintech startups to start setting up shop in India. Hitherto unknown companies like Qwiksilver (which offers prepaid solutions) and little (which is a deals marketplace company) are also gaining ground. “Definitely, there will be increase in demand for talent, primarily for on-boarding and digitizing the payment solutions for offline businesses,” Little CEO and co-founder Manish Chopra said.”With the demonetization drive, we have seen 3 times growth in gifting through gift cards on our Woohoo.in and Woohoo app,” Kumar Sudarshan, Co-Founder and CEO, Qwikcilver. Both company CEOs were positive about the environment and were confident that it would be supportive to their respective companies.
The current political and business situation in India is highly favorable to Fintech companies and the concept of cashless India. However, necessary precautions must be taken in order to not let ourselves get cheated. Anyone who uses Fintech companies must beware of online phishing and losing money through it. Even the most secure online portals can be picked if vigilance is not maintained. Also, giving so much of public cash in the hands of private companies is another danger. These companies receive funding from companies across the globe and are obligated to them. If any one company was forced to act against the best interest of our country, it could end up jeopardizing a lot. But then again, while the sun shines we must make hay. So until this demonetization cloud clears, let Fintech startups and us try and enjoy this silver lining. Read more on Startup News This article was written by our blogger, Ravikiran Ramakrishnan.