RBI Plans a Digital Payments Index

The Reserve Bank of India (RBI) is poised to launch by July 2020 a Digital Payments Index (DPI) to gauge the impact and reach of digital payments in rural, urban, and semi-urban areas. As a part of RBI’s Statement on Developmental and Regulatory Policies, the DPI will be based on various parameters (viz. the level of rural penetration and innovation in the present modes and channels) to reflect with finesse the penetration and deepening of various digital payment modes.

The RBI is also intending via its DPI exercise to comprehend in detail the impact of its policy decisions on the digital payments market. By ‘policy decisions’ what is meant to be conveyed is such decisions as the waiving of Merchant Discount Rate (MDR – the fees paid by a merchant to a bank for accepting payment from their customers through cards or the Unified Payments Interface (UPI)) on UPI transactions. In the recently held Union Budget 2020 it was announced that no charges shall now onwards be levied on UPI and RuPay transactions, and that MDR might also get scrapped on all of the transactions initiated via debit cards.

With the DPI scoring analysis, consumers and various stakeholders will be able to analyse developments of the local area in terms of infrastructure, access, demographic, and acceptance concerning growth in relation to broader domestic and global digital payments standards. DPI is also expected to steer the financial inclusion agenda.

The RBI considered development of a DPI owing to the stupendous growth recorded by the digital payments industry in India in the recent years. As reported by Inc42, in regards to the volume of total digital transactions, RBI numbers state that a growth rate of 58.8% in 2018-19 was recorded. The 2017-18 transactional volume was 50.4%. In value terms, digital transactions soared by 19.5% in 2018-19, as against 22.2% in 2017-18.

Throwing light on the preceding developments revolving around the digital payments space, it’s worth mentioning that the RBI, in January 2019, constituted a five-member Digital Payments Committee with Nandan Nilekani as its head. The “High-Level Committee for Deepening of Digital Payments” had as its objective to encourage digitisation of payments and boost financial inclusion. Preceding to this development, the NITI Aayog in its report titled, Digital Payments – Trends, Issues and Opportunities, released in August 2018, had projected the industry to grow $1 trillion by 2023.However, on the flipside, the incumbent government should also now act upon considering submission of a draft Bill on Payments Regulatory Board (as was recommended by the panel headed by Economic Affairs Secretary Subhash Chandra Garg – awaited since Q4 2018) for Cabinet approval. Given that UPI recorded 955 million transactions valued at Rs. 1, 61,456.56 crore in September 2019, it’s a high-time time now that an independent PRB gets established to streamline the payments industry in India. Whereas, per the reports by Statista, in India, the total transaction value in the Digital Payments segment amounts to US$81,197m in 2020. It should also be noted that Google has recently expressed its recommendation for the US Federal Reserve to ‘replicate’ India’s UPI model for its proposed interbank real-time-gross settlement (RTGS) service. The DPI is set to strengthen India’s position of being a globally advanced digital payments leader.

RRBs Permitted by RBI to Install POS Terminals

The Reserve Bank of India (RBI) Governor, Shaktikanta Das, on February 06, 2020, read the announcement titled, “Guidelines on Merchant Acquiring Business – Regional Rural Banks (RRBs),” wherein, under the Statement on Developmental and Regulatory Policies (Feb. 06, 2020), its decision to permit RRBs to act as merchant acquiring banks via the usage of Aadhaar Pay – BHIM app and POS (Point Of Sale) terminals – was made official.

Put it simply, the RBI has now allowed RRBs to install the POS devices of their own – given that they have consent from the RBI of undertaking mobile banking. Apart from this, it’s also made mandatory by the RBI that the IT systems and Core banking solutions of the RRBs be subjected to an IS (Information Systems) Audit and have deployed secured systems.

The rationale communicated by the Governor revolves around giving an impetus to digital banking and permitting RRBs to be able to offer cost-effective and user-friendly alternatives to their customers. Bringing RRBs on a level-playing field with other commercial banks, RRBs will be subjected to offer the warranted IT infrastructure to enable seamless processes, secured transactions and facilitate timely customer grievance redressal.

It has also been clarified that the RRBs will also be required to make sure the establishment of a board-approved policy for merchant acquisition for card transactions. It has also been specified by the RBI that RRBs intending to deploy POS should be having net-worth of Rs. 100 crore or more as on March 31 of the preceding financial year, plus at least a CRAR at 9% and NET NPA lower than 5%.

The compliance requirements for RRBs also mention due compliance with instructions and guidelines on Merchant Acquisition for card transactions and POS, as issued from time-to-time by the Department of Payment and Settlement Systems, RBI. The exercise forms a crucial part of the initiative taken by the RBI to better credit flows to needy sectors; strengthen monetary transmission, regulation and supervision; expanding and deepening financial markets; and improving payment and settlement systems.

Also, on the digital payments front, under its Statement on Developmental and Regulatory Policies, the RBI has also announced scheduling in April 2020 the release of its framework to establish Self-Regulatory Organisation (SRO) for Digital Payment System. This is owing to the considerable growth trajectory exhibited by the entities in the payment ecosystem warranting a mechanism for orderly operations of the entities in the payment system, and also to foster fine practices on security, consumer protection, pricing, etc.

The RBI specifies that the SRO will act as a 2-way communication channel among the players and the regulator/supervisor. Lastly, again on the grounds of the rapid development of payment systems in India, the RBI has communicated its plan to develop, and from time-to-time, publish a composite “Digital Payments Index” (DPI) to record the degree of digitisation of payments in an effective manner. Multiple parameters exist on which the DPI would be based to accurately mirror the penetration and deepening of different digital payment modes starting July 2020.

BUDGET 2020 – Interpreting the Fine-print for FinTech India & Its Stakeholders

The incumbent Finance Minister Nirmala Sitharaman announced in her address of the Union Budget 2020 on February 1 (2020) the ambitious plan to transform India into a $5-trillion economy by 2024. The primary focus is inclined towards reinvigorating investments and consumption demand to achieve this target – restoration of common man’s confidence and also that of market entities is the key. The FinTech industry was expecting from the budget a revision of (personal) tax slabs to smoothen financial burden on the middle-income groups (while even reduced GST was voiced as an expectation coupled with appropriate tax incentives plus easing access to credit) –, so as to boost spending, thereby enhance instant loan and credit demand and supply dynamics.

The concerns were reasonably dealt with in the Union Budget 2020 pronouncement as the government introduced new personal income tax slabs and rates set to elevate disposable incomes and consumer spending. As also for the startups, the abolition of Dividend Distribution Tax (DDT) is poised to spur investments; further, the postponement of tax payment on ESOPs is a welcome move as is also an increase in the turnover limit to Rs. 100 Cr for accessing tax benefits. But, that’s not all; to boost business activities in India, the corporate tax is now set at 22% (amongst the lowest in the world).

However, per the Economic Times BFSI’s conversation with Venture Catalysts’ Anuj Golecha, the FinTech industry doesn’t stand much to gain from the Union Budget 2020 apart from getting NBFCs into the system of TReDS (Trade Receivables Discounting System – a liquidity boosting mechanism that FinTechs can utilise). Mr. Golecha clarifies that the ESOP relief isn’t made accessible to FinTechs, since the thin details of the budget document mention that only such startups are eligible for the ESOP benefits (and the tax relief that are extended for 10 years and the Rs. 100 crore turnover limits) which are recognised by the Inter-Ministerial Board (IMB) and which also qualify u/s 80-IAC of the Income-Tax Act, 1961, i.e., mere 221 startups in India. This figure for income tax exemption seeking entities was 94 out of 15,798 government-registered startups, as of February 7, 2019, as reported by Indian Express. This means that neither then (27,000 startups – as of 2019), nor now (30,000 startups – as of 2020), are all the startups registered with the DPIIT (Department for Promotion of Industry and Internal Trade) made eligible for claiming ESOP benefits of a 5-year (proposed) deferment of tax payments by startup employees.

Another development worth mentioning is that the zero-MDR (Merchant Discount Rate) is now getting implemented in UPI and RuPay (following the promise made in the Union Budget 2019). MDR is essentially the amount that the merchants pay to banks for accessing the infrastructure that facilitates digital payments. While FinTech startups offering merchant payment services can rejoice, the Payments Council of India (PCI) has a deviating opinion on this development. The PCI Chairman Vishwas Patel states that the zero-MDR move is poised to limit innovation and investment – capable of rendering the business model unviable. He also opines that if the government is aiming to boost payment digitisation, then it should instead be done via a controlled and lower MDR coupled with added tax benefits to merchants. Lastly, he conveys that if MDR isn’t going to be charged to merchants, it’s the government who should bear the cost, reports Economic Times.

However, with even the government anticipating India’s digital economy to contribute $1 trillion to the goal of achieving the $5 trillion economy target, it’s motivating to note that UPI transactions have registered over a billion transactions and the domestic RuPay card has garnered a positive response (of acceptance) in a number of Asian and Middle East countries. With this, if the government can assist in increasing liquidity, inculcating transparency and easing the burden of compliance on the FinTech sector, the future will have promising prospects for the FinTech, its stakeholders, and the economy of India.

RBI Commences Low-KYC for FinTech Customer Retention

The Reserve Bank of India (RBI), on February 5, introduced ‘low-KYC’ to let non-compliant know-your-customer accounts continue paying via mobile wallets. Prior to this, the RBI had recommended payment companies to conform to ‘full-KYC’ by February 29, 2020. As a result, approximately over 200 million mobile wallets were under the risk of getting cancelled by the regulators, owing to the approaching deadline of upgrading the non-compliant accounts to ‘full KYC’ account. Apart from this, RBI has also recommended video-KYC as an alternative to establish customer identity.

Therefore, now, mobile wallet firms such as Paytm, PhonePe, Amazon Pay, etc. and their user-base running into millions would be able to continue their association per the permission from the RBI allowing wallet service providers to continue operating their millions of non-compliant KYC accounts without any transnational limits.

With this new alternative of the RBI, a mechanism will be offered to customers wherein they will be able to convert their ‘minimum KYC’ accounts to the RBI’s ‘low-KYC’ PPI (Prepaid Payment Instrument – a semi-closed retail payment instrument introduced by the RBI in December 2019, having a monthly rechargeable limit of Rs. 10,000 or of Rs. 1, 20,000 in a Financial Year, and which is issued based on the sourcing of essential minimum details from the customer –) accounts.

This comes as a sigh of relief for FinTech firms as they were finding it difficult to onboard fresh customers and retain them following the barring imposed by the Supreme Court on telecom companies and NBFCs concerning the usage by them of Aadhaar-based KYC in 2018. Now onwards, companies will seek customer consent prior to performing ‘low-KYC’ of their accounts. However, it should also be noted that while KYC formalities were already done before, these were rendered null and void following the earlier pronouncement of the restrictions of the Aadhaar KYC method by the Supreme Court.

Following this, in February (2019), the Union Cabinet had considered promulgating an ordinance to permit voluntary use of Aadhaar number as a proof of identity for bank account opening and also for obtaining a new mobile phone connection. While the payment firms had also sought from the regulator an alternative to eKYC for onboarding and verification, the Payments Council of India (PCI) also requested the regulator to postpone the conversion of minimum-KYC accounts to full-KYC accounts deadline till February 28, 2020, owing to Aadhaar restrictions pertaining to eKYC process.

Other proposed formats of KYC in the pipeline include live video customer verification and XML internet format. It has also been reported that Amazon Pay had considered doorstep KYC for its mobile wallet subscribers.

Gig Economy of India – Issues & Solutions in 2020

Project-to-project basis work is soon gaining momentum even in India, as the gig economy is entering its second phase of organised development (with market-wide acceptance and adoption). The application-based platforms offering services like cab booking, house renting, food (doorstep) delivery are estimated to employ over 2 lakh people in companies such as Ola, Zomato, Swiggy, UBER, etc. While profitability has soared for such companies, employee exploitation has also increased resultant to which the government has exhibited mindfulness towards ensuring employee welfare by developing the required legal framework.

The gig economy is here to stay in India, as is evident by the recent initiative taken by the prestigious National Law School of India University (NLSIU), Bengaluru, of submitting draft guidelines for the gig economy. NLSIU is set to submit the draft guidelines to the government in February 2020, thereafter; the Karnataka government would either table a bill in the assembly or frame suitable guidelines under the purview of the incumbent laws meant to protect the rights of employees. Notably, the Karnataka state legislature’s upcoming budget session might see the draft getting tabled, reports Times of India. It has also been clarified that upon the draft being prepared by NLSIU, it might get debated in an open forum.

However, it’s a fair question to ask that has our labour market matched the pace with the incoming of the gig nature of work? Assuming a full-time gig work summons constant development of certain innate skills that are vital for gig workers, these are: entrepreneurship, networking, financials, and a knack of deciphering human psyche. While in India, at present there isn’t any regulation to standardise rates paid to gig workers. This makes mastering the art of negotiation a prerequisite to a thriving gig work career. Soaring tech usage in India has escalated those who have previously worked in the unorganised sector to be able to obtain better employment. However, even then, the jobs created in the gig economy mostly still get developed in the informal space, wherein some red flags do exist when attempting to apply this model in reality.

Essentially, new concepts like the formation of a Universal Basic Income (UBI), skill development programmes, ensuring availability of secured gig-based employment and freelance opportunities, and workplace protection, among others, is necessary to be looked upon. Hopefully the draft guidelines for the gig economy initiative underway at the NLSIU is received well by the Karnataka government and the state legislature, and upon implementation of the same, other states and governments also show active interest in inculcating the same spirit and safety in their respective regional gig workforce. The flexible work economy isn’t going anywhere, with increased adoption of technology and the availability of seamless payment avenues all that is remaining to be dealt with to make the gig economy a thriving market for the workforce is safety, security, and assurance of reasonable remuneration.

The BCG 2019 Report: The New Freelancers, states, “As per a survey of 6500 senior executives worldwide, 40% of respondents said they expected freelance workers to account for an increased share of their organization’s workforce over the coming five years.” (FlexingIT Project Trend Data: 2018-2019.

FlexingIT research also states that, “over a 3rd of companies in India estimate up to 50% reliance on flexible talent in the next 5 years.” Per a study conducted by McKinsey, estimations indicate that up to 20%-30% of the workforce in developed markets is engaged in independent work.Also, as reported by ASSOCHAM recently, the Gig Economy of India is definitely marching towards becoming a strong component of India Inc’s strategy as the sheer size of the gig economy is projected to grow at a CAGR of 17%, whereas it is likely to hit a gross volume of $455 billion by 2023.

FinTech India – Mobile Phones, FinTech & the Incoming of New Players

The economic challenges presented in 2019 coupled with protectionist regulatory measures didn’t actually hinder the development of the FinTech ecosystem of India as the startups in this domain managed raising over USD 365 million in July 2019, while the total investments entering in this sector being USD 1.16 billion, per the research conducted by IBS Intelligence. 

The FinTech sector is poised to witness established firms entering with much optimism. These include companies such as PhonePe and PineLabs (both having raised 100 million), BharatPe (raising USD 75 million), PayMate (raising USD 25 million), and Niyo (raising USD 35 million). As reported by Tracxn, the total investments entering in India’s FinTech sector stood at USD 800 million in the 1st half of CY 2019 (up 14% from the USD 688 million raised in 1st half of CY 2018. Whereas in 2019, FinTech startups raised over $3.2 billion.

However, that’s not all; a couple of top smartphone vendors are also making their presence felt in the FinTech startups space of India. Xiaomi launches MiCredit, in association with domestic startups such as CreditVidya, ZestMoney, Aditya Birla Finance Limited, Early Salary and Money View (to determine credit worthiness and financing eligibility). Xiaomi is intending to offer digital lending (credit in the range of Rs. 1000 and Rs. 100,000 at reasonable interest rates). In March 2019, Xiaomi started Mi Pay (a payments app powered by UPI) in India as a unit of its Mi Finance ecosystem (having around 20 million registered users).

Following the trend of entering the FinTech domain are other popular mobile phone brands, viz. RealMe, OnePlus and lately OPPO, as well. OPPO Kash by OPPO, is scheduled to be launched in June 2020 in India, to offer 1-click micro-loans coupled with flexible repayment features. Realme India started its payments service, Realme Paysa in December 2019, with the aim of being top-5 new financial services offering entity in 3 years.

As reported by AsianAge, mobile wallet transactions in India soared by 40 times in the preceding 5 years. Much of this momentum can be attributed to the mobile phone-based financial services global standard of FinTech, the Unified Payment Interface (UPI – enabling secure, real-time transfers even without a bank account). Mobile wallet transactions in India have increased 40 times in the preceding 5 years. Compared to traditional financial models, mobile finance gives distinct advantages, as follows: 1. Digital transactions generally don’t cost when initiated. 2. In-person services and cash transactions are now innate elements of routine banking expenses. 3. In the case of mobile finance, clients maintain their balance money in digital format. 4. In the absence of transaction costs, sending and receiving money from individual banks or mobile service providers is easy. 5. Mobile communication leads to high-volume of data, usable by banks and service providers to develop optimally profitable services. 6. Traditional credit scores get done away with as the subscribers without financial credit history also obtain the necessary credit to run their small businesses. 7. Mobile platforms have bank accounts linked to their clients on a real-time basis, thereby, banks can process account information. 8. Microfinance is also made accessible to those no credit risk proofs.

As per Financial Express, smartphone users in India are poised to double to reach 829 million by 2022 (growing at a CAGR of 15.5%). Coupled with this, there is also the influx of mobile form factor in the Point of Sale (PoS) devices to accept device-based payments (the growth numbers have been forecasted at a CAGR of 54.2% in the period 2019-23, per the Mobile PoS Payments, Statista, 2019

The Code on Social Security, 2019 – What’s in it for Gig Workers?

The Code on Social Security (“the Code”), having the capacity of impacting over 50 crore workers in India, now stands approved by the Union Cabinet. The Code, introduced by the Labour Minister Santosh Kumar Gangwar on Wednesday (December 11, 2019) in Lok Sabha, swaps 9 laws associated with social security; noteworthy among these is the Unorganised Workers’ Social Security Act, 2008. Social security generally signifies various measures initiated to make sure reasonable access to healthcare and the provision of income security to workers if offered. Establishing a social security fund with the help of the corpus available under corporate social responsibility is advised, so as to offer welfare benefits to all workers. Why this proposal is special is since it also includes gig workers under its purview.

Gig workers

The Code indicates that as for the schemes for gig workers, platform workers, and unorganised workers, the financing of these is planned to be done via a mixture of contributions from the employer, employee, and the appropriate government. However, there is more to it than this; the central or state governments could also, under the purview of the Code, notify specific schemes for gig workers, platform workers, and unorganised workers, say in the form of offering such service professionals with various reimbursed benefits, viz. life and disability cover. The Code identifies Gig workers as those workers who work outside of the traditional employer-employee relationship (e.g., freelancers or independent contractors). Platform workers, for instance, are such workers who access other organisations or individuals via online platforms and earn money by offering them with specific services. Unorganised workers also comprise of home-based and self-employed workers.

Talking about home-based unorganised (gig) workers, it should be mentioned that even though the third-largest economy in the world is amidst a slowdown (per the International Monetary Fund), the skillful housewives of India are joining the promising trend of “cloud kitchens” to feed today’s hungry urbanites (millennials), that also too late in their (ripe for retirement) lives. Various app-based startups such as Curryful (dubbed to be the UBER of home-cooked food), Homefoodi, etc., have started offering a platform to housewives for offering home-cooked meals to the modern millennials. What this means is that the demography of the gig workforce is innovating with each passing month in India as various forms of service professionals are joining the market that erstwhile were expecting retirement in their lives. With such a robust presence of demand and supply matchup in the gig workforce and the startup markets, it certainly makes sense for the government to ensure timely social security measures for its unorganised, independent, young, adult, middle-aged, and also ageing elderly (still zealous) workforce.

This is because in stressed times (as the ones currently being experienced by our nation in the form of unrests), it gets difficult for gig workers who are discharging their duties in the middle of the road as food delivery-agents or cab drivers or e-commerce delivery agents to comfortably and safely fulfill their service obligations. In such uncertain times, it surely makes sense to have social security benefits of the required nature in place to make such vulnerable gig workers be able to protect themselves and safeguard the future of their dependent family members (via referring the code on occupational safety, health, and working conditions). The same goes for elderly home-cooking housewives who juggle with multiple duties, more so in their later years. Where in the western countries the trend of platform (app) economy jobs have been received negatively for having destroyed stable industries – the reasoning being the absence of the following: (i) workplace benefits. (ii) labor unions –, in India, the government has exhibited the necessary mindfulness towards initiating proactive steps (such as the Code on Social Security, 2019) in the direction of addressing these warranted concerns of the gig workers, their families, and various stakeholders.

Decoding FASTag: How National Electronic Toll Collection (NETC) Works?

The National Payments Corporation of India (NPCI) has built the RFID-enabled National Electronic Toll Collection (NETC) program poised to fulfil the electronic tolling needs of the transport market of India. For the same objective, NPCI now offers a national interoperable toll-payment solution that also inculcates within its scope the offering of clearinghouse services for settlement of disputes. Within its spectrum of offering ‘Interoperability’ (applied to NETC system), it includes a common set of procedures, business rules and technical specifications allowing a customer to utilise their FASTag as a payment mode on either of the toll plazas, regardless of the specifics of the acquirer of the toll plaza.

The various objectives of NETC FASTag are: i. creating a compatible and interoperable toll-collection ecosystem to use nationally. ii. through a simple and robust framework, increase transparency and efficiency in transaction processing. iii. achieving the sub-goals of the Government of India of electronification of retail payments, reducing air pollution via decreased toll plaza congestion, plummeting fuel consumption and promoting cashless transactions, enhancing audit control via user account centralisation

NETC – the technical ecosystem on which the FASTag is based – supports multiple issuers and acquirers authorised for the NETC program. The transaction request from the Toll Plaza is sent to the Acquiring System for transactional validation, and it then moves further so as to finally reach the NETC Switch. The NPCI routes these transactions to the relevant Issuer Bank for debiting the tag-holder account. During the entire process, a particular transaction travels through an 8-step (LEGs) process.

The NETC transaction process flow emanates at the Toll Plaza System (capturing the FASTag data, viz. Tag ID, TID, Vehicle Class, etc.) and travels through the Acquirer Bank for processing, which then sends a request to the Online Switch & Mapper (i.e., the NETC validation mechanism that responds with such details as Vehicle class, VRN, Tag Status, etc. – upon an absence of the Tag ID in NETC Mapper, a response is issued stating that the Tag ID isn’t registered). Following the receipt of a Tag ID validation from the NETC Mapper, the acquirer host calculates the relevant toll fare and emanates a debit request to the NETC system. Then the NETC system switches the debit request to the relevant issuer bank for debiting the customer account.

The Issuer host then debits the linked tag holder account and sends an SMS alert to the tag holder. It also sends the response message to the NETC system. Upon failing to send the response within the defined TAT (Turn-Around-Time), the transaction is considered as Deemed Accepted. The response is then notified to the acquirer host for notifying the respective toll plaza system.

India on the World Bank Global Findex

The World Bank Global Findex

The Bill & Melinda Gates Foundation-funded Global Findex (GF) database is the benchmark for “Measuring Financial Inclusion and the FinTech Revolution.” Published first in 2011 by the World Bank (WB), the Global Findex is the comprehensive global database depicting the adult behaviour pertaining to saving, borrowing, payments, and risk management. The Global Findex data is collated in association with Gallup, Inc. (a global analytics and advice firm), comprising detailed survey insights of over 150,000 adults in 140 economies. The latest Global Findex is the 2017 edition (published in April 2018), including revised indicators on reception to and utilisation of official and casual financial services. Also included is the new data on the utilisation of FinTech (mobile phones and the internet to initiate financial transactions).

Continue reading “India on the World Bank Global Findex”

FinTech Valley: The Vizag Agenda

FinTech Valley Vizag (launched in Visakhapatnam on 17 December 2016) is a global FinTech Ecosystem focusing on converging finance and technology for generating massive growth prospects via industry facilitators, exceptional infrastructure, and innovative entrepreneurship. It is an ambitious initiative of the Government of Andhra Pradesh (India) to endorse business infrastructure, and draw investors and MNCs to open offices in the state. In September 2016, the Chief Minister of Andhra Pradesh released the ambitious document titled ‘Sunrise Andhra Pradesh Vision 2029’ carrying the blueprint of the growth trajectory for the state.

Endeavouring to be a “happy and globally-competitive society” by 2029, the Andhra Pradesh state, as stated in the vision statement, envisages transforming into an inclusive, accountable, and competitively innovative society. Initiating structural transformations and committing to sustain high economic growth, the state government of Andhra Pradesh placed FinTech as the epicentre of focus to create an ecosystem of digital banking, financial analytics, cybersecurity, and blockchain (database) technology. Among the various promising initiatives taken under the auspices of the FinTech Valley Vizag, the two initiatives pertaining to the FinTech ecosystem are: 1. The Andhra Pradesh – Purse mobile wallet offering 13 mobile banking and 10 mobile wallets for transactions. 2. The Marpu Nestam—an incentivised setting of agents for educating people on digital financial literacy.

Following the FinTech Spring Conference (March 2017) and Blockchain Business Conference (October 2017), the successful 5-day Vizag FinTech Festival (22—26 October 2018) directed towards GovTech (technological advances fostering invisible government, visible governance), BankTech (future of banking, investments and payments), InsurTech (technology enablers in insurance), EmergeTech (emerging technologies: AI, Cybersecurity, Blockchain, IoT, & Big Data), and Financial Inclusion (increased access to financial services for the underserved) was organised to set the good governance and inclusive growth agenda right for 2022. According to J.A. Chowdary, Special Chief Secretary & IT Adviser to the Andhra Pradesh government, under the auspices of the Vizag FinTech Festival, 25 out of a total of 40 startups were shortlisted for participating in the finale of $1-million FinTech Challenge.

Notably, the Andhra Pradesh government’s accord with FinTech Association of Hong Kong is aimed at utilising Hong Kong’s FinTech ecosystem and developing an Andhra Pradesh—Hong Kong entrée for FinTech startups and knowledge transfer.

Given the incumbent and future ambience of FinTech ecosystem in India—with 1 billion smartphone users by 2020, FinTech market projected to reach $2.4 billion, 600+ operational FinTech startups, massive growth potential in digital banking, government support (Startup India initiative), and a CAGR of 22%—such promising initiatives like the FinTech Valley Vizag should also be modelled in other promising IT & Financial hub states such as Karnataka, Maharashtra, and Gujarat. An entire ecosystem of such promising initiatives can lead to winningly achieve the aspired financial inclusion objectives. This milieu can make the dream of India ideally transforming into a digitally smart nation a resounding reality.