Machines Impact on Financial Services

This includes the hassle of accepting payments in India which still remains in cash. However, merchants today have realized that accepting cash is not the most seamless way for payments. “Merchants have realized that while it may not have an upfront cost but the overall lifetime cost of handling cash is really expensive compared to going cash less,” says Harshil Mathur, Co-founder, Razorpay. Bengaluru-based payment gateway solution provider, Razorpay was part of winter 2015 batch of world’s top seed accelerator Y Combinator.

“With the launch of unified payment interface, Aadhaar etc., in the next two years, the way payments are done will be changed in India. It will also be critical as more and more people enter the banking ecosystem,” adds Mathur.

Gurgaon-based Eko India Financial Services that offers payment and money transfer services to customers and retail merchants believes that data generated by these digital transactions will in-turn help merchants cope up with their working capital issues. “We share the data generated by merchants’ earnings with alternative lending companies who can offer working capital loans to these merchants based on that data as traditionally merchants have been unable to raise working capital loan from formal institutions like the bank,” says Abhinav Sinha, Cofounder & COO, Eko India Financial Services.

Clearly, fintech is the way forward in such cases even as vast Indian population remains bereft of banking services. “A government in favor of dematerialization and online on boarding of the rising rural middle class could only augment the fintech growth,” says Nikhil Kamath, Co-founder and Director, Zerodha – Bengaluru-based discount brokerage firm. However, banks too are undergoing digital restructuring to avoid being on the edge of their seats courtesy fintech start-ups that have been unbundling
banks’ various services. On the face of it, banks, however, term fintech start-ups as partners rather than their possible nightmare.

“Banks have the wherewithal of putting the right governance structure, audit mechanisms, settlement and reconciliation processes in place where as start-ups are good at knowing how to work on the user interface and user experience design. This is a perfect combination to offer better services. I often joke about it saying that if fintech start-ups are to be WhatsApp of today then banks have to play the role of Internet service providers. So both have to go hand in hand,” concludes Ritesh Pai, Senior President and Country Head - Digital Banking, Yes Bank.