This report explores the forefront of FinTech in India. The objective of the report is to identify the key business and technological innovations within FinTech and broader financial services (FS) landscape. Additionally, the report will assess the current state of collaborations in the Indian FinTech ecosystem to understand their impact on financial institutions (FIs). Furthermore, it will showcase the impact and challenges that FIs have incurred from their internal innovation and collaboration initiatives. Lastly, the report aims to identify the emerging themes regarding innovation and partnerships that is being prioritized by FIs.

India's payment ecosystem has witnessed remarkable growth in recent years, making the country a powerhouse for digital payment transformation. Digital payments in India are growing rapidly, with a year-on-year volume growth of 58% in FY 2022–23. This growth is projected to continue, and by FY 2026–2028, digital payments are expected to grow four times their current size. In this edition of the payments handbook, we will analyze the recent trends in some of the leading payment modes (UPI, cards, NETC etc.), the new developments & innovations in this space & consumer acceptance towards these instruments. The handbook will also try to evaluate the existing/new challenges & opportunities which may further boost or act as a hindrance to the overall growth of this industry. In addition, we will also provide an overview of the role of technology and related interventions in the recent past and how tech innovations can shape the payments industry in India. The handbook will also try to access the latest regulatory and government interventions which can change the direction of digital payments in India. Basis the above analysis, we will try to draw some of the future trends & predict the growth of the market.

Over the past few years, FinTechs can be immensely credited for the monumental transformation brought upon into making financial services available to the masses. Such transformation has been primarily driven by innovation that FinTechs bring in continually. On the other hand, regulations are also playing catch-up with innovation at the same pace as FinTechs are bringing in the innovations.
FinTechs are disrupting traditional practices in financial services sectors alongside discovering niche markets and thus, in all this, customer protection and stability of the financial ecosystem are of primary importance to the regulator. This leads to a perceived friction between innovation and regulation, as there is a perception that regulation may strangle innovation. Recognizing that regulatory compliances are an inescapable part of the expansion process of any FinTech, FinTechs have been increasingly aiming to strike a fair balance between innovation and compliance. The Paper explores the key areas that mandate the attention of the FinTechs from a governance, risk and compliance standpoint and how the same can be focused upon while ensuring that innovation is not stifled.

This will interlay the impact of SCF on the Circular economy, which are the deep penetrated/under-penetrated segments for financiers (banks, NBFCs), the impact of digitalization and how geo-constraints are leading to innovation amongst players.