An alternative method of financing, Buy Now Pay Later (BNPL), is robustly attracting participants globally. It is an easy credit option offered by companies at the point of sale that allows users to purchase items without needing to make any payment upfront. They can plan to pay for their purchases at a later date or in fixed instalments pre-decided by the credit provider and user. Most of the time, BNPL does not require any KYC or high credit scores, and it mostly charges no interest or minimal interest, unlike credit cards, or personal loans, rendering it one of the most feasible credit options in today’s times.

Reasons for Growth of BNPL

BNPL offers tremendous benefits while evading the burden of credit scores and heavy loans. There are many reasons why BNPL is gradually becoming a mainstream payment option in many places.

–         Ideal setup for small credit offers for purchasing consumer goods, electronics, etc.
–         Consumers don’t require high credit scores to avail of BNPL services.
–         Low or no fees for opting for BNPL.
–         Easy instalment with a fixed amount and fixed dates.
–         Gives users better power to purchase.

Apart from the benefits and convenience associated with BNPL, one of the primary reasons for its exponential growth is the pandemic. With restrained financial activities, the slow pace of economies put a dent in employment figures and earnings in a majority of households, which, in turn, led to the upsurge in the number of people opting for BNPL during checkouts.

Facts & Figures

–         The BNPL transaction volume is expected to cross $680 billion by 2025.

–         In the USA alone, the gross number of users has increased by more than 300% since 2018.

–         The growth of the global market has almost doubled since 2019 because of the pandemic.

–         Digital payments are taking over an enormous market, where more than 80% of purchases are made online.

Biggest Sectors

With BNPL becoming a mainstream digital payment option, the sectors that have seen the most impact and volume are:

Consumer Electronics

The sector that has the highest number of BNPL transactions is consumer electronics. People prefer to purchase their electronics, like phones, TVs, video game consoles, etc., via digital payment nowadays. This trend has opened doors for users to opt for BNPL during checkouts, which is slightly easier if compared to Equated Monthly Instalments (EMIs).

Fashion & Garments

The second highest number of BNPL transactions was reported in the fashion and garment industry, which, again has witnessed a tremendous volume of digital payments.

BFSI

Banking, Financial Services, and Insurance have been key players in instrumenting the adoption of BNPL. Insurance providers are offering the option of BNPL to their new consumers.

Retail

With retail purchases opening the option of BNPL, people have experienced immense relief especially, because this is primarily a need-based industry.

Healthcare

The healthcare sector is not far behind, on BNPL’s list of most impacted sectors. The rise in the number of ailments and frequency of hospital visits, combined with the situation of the pandemic, has made it extremely difficult for people to plan and cope with their medical expenditures. This scenario has resulted in the astronomical growth of BNPL, however, this is a major reason why BNPL cannot be a mainstream option in healthcare altogether.

Media & Entertainment

Paying for subscriptions, tickets, and other activities in the media and entertainment industry has seen colossal growth with BNPL.

Biggest Market Regions

Although BNPL has been around for some years now, it is only recently that the phenomenon has caught up with mainstream payment options. Being a fairly new concept for a large part of our population, BNPL has struck a big market chunk in the following regions:

North America

The North American region has been the biggest BNPL market, where it owns almost 30% of the total share. Fintech, in general, has found the most active market in North America, which has been an underlying reason for BNPL’s popularity in the region. As more and more people want to evade high credit card charges, the pressure of having a healthy credit score in the US has people looking for alternative financing options, which has created the perfect market for BNPL.

Asia Pacific

Following North America is the Asia Pacific, which is gradually gaining ground in the BNPL market. India, particularly, has been in the limelight for its young population opting for alternative easy financing services like BNPL.

Europe

The sector that has seen a high volume of BNPL transactions is the European region. With digital finance taking over a major portion of the banking and financial industry in Europe, BNPL is also becoming a hit among European and UK consumers.

Latin America

Brazil is leading the Latin America fintech industry, which has made the onset of BNPL easier in the region. Latin America is a rapidly developing economy that demands options of easy credits that give more purchasing power to buyers without burdening the consumer much.

Middle East & Africa

The BNPL market share in the Middle East and Africa is at par with Latin America, where newly developing economies demand alternative financing without requiring too much from the user.

Conclusion

The growth in BNPL suggests a massive takeover of the mainstream payment options share. BNPL has thrived because of many reasons that have impacted the market and influenced people’s decision-making in financial matters. People see BNPL as an option that gives more purchase power to the consumer. 

‍

The presence and importance of cryptocurrencies are steadily gaining dominance lately. As more and more cryptocurrencies make their way into the market, the number of participants, namely, buyers and sellers, grows. With so many transfers and purchases taking place globally, the need for secure platforms to operate cryptocurrencies has become essential; this is where crypto-wallets come into the picture.

Crypto-wallets: What are they?

The use and adoption of e-wallets or digital wallets have popularized over the years. These wallets are either linked to bank accounts or they safely store card details and personal identification documents in digital formats. 

Crypto-wallets, are an extension of these digital wallets that are dedicated to being used for cryptocurrencies. The one main difference between general digital wallets and crypto-wallets is that crypto-wallets do not store any cryptocurrencies; they simply store the keys that are used to operate the cryptocurrencies.

Cryptocurrencies are stored in blockchains, like Ethereum, where all activities, like purchases and transfers, are documented in blockchain ledgers. These cryptocurrencies are stored in blockchains, as they are decentralized currencies that are not governed and monitored by any particular authorities.

The Importance of CryptoWallets

If cryptocurrencies cannot be stored in personal crypto-wallets, then what exactly is the role of these wallets?

When a buyer purchases tokens or coins in cryptocurrencies, these are stored in digital formats on the blockchain network with updated ownership. The new owner of the crypto asset takes possession of a digital key that is unique to all currencies, coins, and tokens. These keys enable the operation of cryptocurrencies on the blockchain network. 

These keys are stored in three forms. 

–         Paper Documents – These physical documents are then safeguarded and stored in safe places like banks or home lockers. A point to be noted here is that physical paper documents offer the lowest accessibility.

–         External Hardware– Keys are also stored in external hardware that can be plugged into computer systems whenever the owner wants to operate their cryptocurrencies. External hardware is more accessible than paper documents, but they are also stored in physically safe places.

–         Digital Wallets or Crypto Wallets – The keys are stored in digitalized wallets or applications that provide much greater accessibility to owners. This way allows the owner to take better control over their crypto transactions.

Without these keys, the owner cannot operate their cryptocurrencies even if they are officially under their ownership. 

Here is where the importance of crypto-wallets starts to roll.

Cryptocurrency owners can use crypto wallets to store their digital keys in a secure and safe platform, which would give the owners much greater flexibility and accessibility to operate their crypto purchases.

‍

The 6 Best Crypto Wallets According to Their Market and USPs

‍

Exodus

 Exodus offers brilliant services for beginners as well as advanced cryptocurrency users. The wallet supports more than 145 currencies and is best known for its slick desktop user interface. There are no charges for registration, however, Exodus does charge a fee for any transactions that are conducted using the platform. Both the desktop and mobile applications are compatible with different operating systems, like Windows, Android, iOS, etc. Exodus wallets are primarily hot storages that are connected to the internet at all times. Most users feel that hot storage, in general, offers lesser security compared to cold storage, resulting in them upgrading to cold storage after a point in time. 

‍

Coinbase

The crypto wallet by Coinbase has been recognized as the best wallet option for beginners. With a friendly and easy user interface that guides and educates new and old users about different aspects of cryptocurrencies and their market trends, Coinbase wallets have become quite popular for their services. The level of security offered in these wallets is high and includes multi-signature and 2-factor authentication. Coinbase supports more than 500 currencies, making it highly versatile for use. The one limitation with Coinbase is that it is not yet compatible with different operating systems. 

‍

Ledger Nano X

The Ledger Nano X is a physical wallet offered to cryptocurrency users to store their keys in physical hardware. This type of wallet is a form of cold storage that is accessible offline. The user can plug in their wallet devices to access their keys and operate their cryptocurrencies. The Ledger Nano X wallets support several digital assets and have a Bluetooth option that can be connected to the Ledger Live app and used to trade in cryptocurrencies. It is much more advanced and expensive compared to cold storage, but its security blanket is thicker and more versatile than most other options. The Ledger Nano X can also be used to protect and safeguard other documents like credit cards and personal IDs like passports. 

‍

Mycelium

Best known for its strong security and mobile services, Mycelium is another popular choice among crypto investors. With a strong focus on Bitcoin, this particular wallet has been built only for mobile devices. It offers advanced services for Bitcoin and Ethereum users, making it a little harder for new users to get a hold of the nuances, however, its par excellence security makes up for these disadvantages. It can easily be linked with cold storage providing good leverage to users. The Mycelium Wallet is an ideal option for people interested only in Bitcoin and Ethereum.

‍

Electrum

Electrum is best known for its security over most hot wallets. This is another wallet that is solely focused on Bitcoin users and transactions and has been around for over ten years. Electrum also offers advanced options for users that can be slightly difficult for new users to understand. The transaction fee is customizable, giving users an added advantage. The wallet supports 2-factor and multi-signature authentication methods and can easily be integrated with cold storage.

Trezor – Model T

The Trezor Model T is a hardware wallet that is best known for its security. The wallet is quite similar to Ledger wallets, except that it allows users to access third-party exchanges from its interface directly. Trezor Model T supports over 1800 cryptocurrencies, making it very versatile for use. The Model T has a small touch screen that makes its operability much easier than buttons. Currently, the wallet supports different operating systems except for iOS.

‍

Concluding Words

There are over 80 crypto wallets currently operating in the market, offering competitive services and prices. Two of the key objectives of wallets are usability and security. The more services, better compatibility, and advanced options the wallet provides, the more crucial it becomes for the wallet to offer the best possible security.

With so many wallet options buzzing in the market, it becomes difficult for users to make their choice. The best thing to do is to analyze your requirements, the level of expertise, and the security offered; such fundamental analysis would help determine which wallets suit you.

‍

The past few years have seen an exponential growth of terms like Web 3.0, NFTs (non-fungible tokens), the metaverse, cryptocurrency, blockchain, and more. With tech giants such as Facebook and Google gradually edging towards this industry, it has become crucial for the bystanders to get their bearings right and understand what this jargon-filled world encompasses.

Web 3.0 is rightly said to be the third generation of the internet. The first generation saw the emergence of basic HTML company websites, imparting information about companies where the user’s involvement was restricted to reading. Web 2.0 evolved into a more interactive interface, which led to the dominance of social media and interactive websites, which allowed users to interact with webpages and other users. However, in Web 2.0, most decisions related to the technologies and market were taken up by big companies and governments, restricting the engagement and power of the users. This is how Web 3.0 surfaced.

The third generation of the internet is yet to blossom completely, leaving a trail of ambiguity about its future. The primary intention of Web 3.0 is to disrupt the centralized system of the internet. 

The onset of Web 3.0 suggests a decentralized method of operating the internet, where the better half of the control would be in the hands of the users. However, this notion has found a place in the list of conundrums governing the internet space currently.

The metaverse has become a quintessential augmentation of the internet that has been subjected to love and hate equally, meaning that its warm welcome has also received some backlash.

To start with, what is the Metaverse?

For everyone familiar with video games, the understanding of what the metaverse is might just become a tad bit simpler. In uncomplicated terms, the metaverse is our world in a virtual setup; which means that humans, objects, nature, and everything else, exist in a virtual space in virtual forms. 

The concept of virtual reality is not new; VR first emerged in the 1980s, when Jaron Lanier developed goggles and gloves that would enable people to enter and feel virtual reality. This concept successfully found a niche in the video game world. Roblox games used the concept of virtual reality, where children could devise their virtual ‘avatars’ and hang out with friends in a virtual world, doing pretty much anything. The VR used in video games gradually transpired into a more amplified version opening the gates for the emergence of the metaverse.

The metaverse has become a popular space that is continuously getting explored and created by people globally. Starting with virtual personalities, the concept of virtual reality has reached a stage where people are going heavy with their investments in properties, assets, and artworks to build a more secure, comfortable, and fancy virtual reality for themselves. 

To achieve this security and comfort, people have created and bought stadiums, houses, and pieces of land in this virtual space. The prices of these assets, the digital avatars, and other objects being created and bought in the metaverse are influenced by factors such as their demand, the brand value, the ability to recreate it, and the complexity of its creation process, etc.

Impact of Metaverse on Fintech

Like other sectors that have been influenced by the emergence of the metaverse, fintech has also witnessed a few changes. Here, come the roles of cryptocurrencies and blockchain technology.

Cryptocurrencies are decentralized currencies used as investments or to make purchases.  The term ‘decentralized’ means that these currencies are not governed and influenced by any company, individual, or government, and blockchain technology follows the same supremacy.

Blockchain is the platform where all cryptocurrency dealings are performed and stored. All purchases, transfers, and transactions related to cryptocurrencies, are automatically stored in this digital and decentralized platform.

The metaverse involves both virtual and augmented reality, to access which one doesn’t necessarily require VR or AR technology. Some aspects of the metaverse involve cryptocurrencies and, in turn, blockchain technology. 

The financial aspect in the metaverse is where and how fintech comes into play. As the metaverse exclusively exists digitally, all the financial activities associated with this space are accounted for in the fintech industry. When people purchase NFTs or other digital assets in the spectrum of the metaverse, the financial dealings are carried out digitally, suggesting an urgent need for fintech.

As the confluence of the metaverse with fintech deepens, it opens doors for more innovation in both industries. According to a report, the trends in the fintech industry have suggested that its investments in developing technology, applications, etc., to meet future consumer requirements could shoot past $1 trillion in VR.

With metaverse gaining more popularity among the masses, the level and frequency of investments have also increased, resulting in a more pronounced need for fintech capabilities to cater to this advent of new technologies.

The Future of Metaverse in Fintech

The most powerful augmentation by the metaverse in the fintech spectrum would be monetary exchanges that would allow users and participants to engage in monetary transactions in a singular dimension employing decentralized media. Such opportunities would prompt fintech companies to remodel and innovate the financial sector to cater to the virtual world more efficiently. 

Another implementation of VR and AR would be like the addendum of remote working, where users can attend meetings or their offices in a virtual setup, making the best of both worlds. In this particular concept too, fintech can have the opportunity to reshape the virtual fintech world very differently from how it is shaped in our reality.

Such innovations and ideas allow immense freedom for creativity and growth, accelerating the overall evolution. By making use of the right opportunities at the right time, the fintech industry can reap the most benefits from the metaverse. 

‍

The fintech industry has witnessed extravagant numbers in terms of growth, valuation, and participants. There have been rapid developments bringing both disruptions and definitions into the market. All this dynamism has powered an upsurge in the number of opportunities, and in turn, the number of participants. Amidst this transformation, a few cities got propelled towards becoming fintech hubs owing to some prerequisites and strategic benefits.

The dominance of Silicon Valley in technological developments invoked the origination of the major fintech stalwarts like PayPal, Intuit, Robinhood, and many more. Similarly, London has housed several startups and companies that have immensely contributed to changing the face of fintech over the years. The country-city of Singapore has followed these giant hubs closely, owing to the readily available talent, the timely influx of investments, combined with the right mix of opportunities, and a supportive regulatory structure.

But with more participants entering the arena, there has been an evident shift in the dominance of these hubs. More countries are steadily realizing the opportunities and benefits of being on the frontline of fintech. The countries and cities that are now looked at as the emerging hubs of fintech are:

Brazil – Sao Paulo

Talking about emerging hubs, the city of Sao Paulo in Brazil takes the cake. It has housed more than 270 startups, all of which are relentlessly working towards building innovative solutions that challenge traditional methods of banking and finance. Brazil has the highest number of startups in all of Latin America, because of which it has acquired the status of becoming the financial hub.

The Brazillian market has revved its supremacy because almost 40% of the country’s population has abdicated their trust in traditional banking methods. The roots of this mistrust in banks originated due to the prolonged financial crisis that took over the country.

NuBank has emerged as the shining star of the hub, followed by many others like C6 Bank, Unico, Creditas, etc.

Israel – Tel Aviv

The city has been known for its supremacy in science, engineering, and technology, due to which it is considered one of the emerging hubs of fintech. The country is equipped with knowledge and talent, and after receiving exemplary aid from its government, Israel has deservingly become a dominating market in InsurTech and Investment platforms. The culture of entrepreneurship, combined with easy loans from the Israeli government, help create an active ecosystem that accommodates and supports innovations, business, and growth.

Lithuania – Vilnius

Lithuania has already been ranked 19 out of 190 by the World Bank in the Ease of Doing Business Index. Post Brexit, Lithuania has witnessed an influx of British companies wanting to shift their operations to the country. This upsurge has occurred because of the favorable fintech environment that is supported by the country’s regulatory practices. The education level in the country is among the highest in Europe, which brings tremendous opportunities for the youth to advance in emerging fields like fintech.

The city of Vilnius alone has over 60 fintech startups, all of which are performing well. Out of these, the most prominent names that have made headlines are Kevin, Bankera, and Nordigen.

The Netherlands – Amsterdam

Amsterdam is home to more than 120 fintech startups, some of which have been applauded globally for their contribution to risk management, like Adyen. The environment of entrepreneurship in the country focuses on providing as much support as possible by giving tax benefits and allowances to startups.

India – Bengaluru, and Mumbai

Bengaluru, previously known as Bangalore, has gained immense traction in the past few years, attracting global attention. It is a tech-savvy city which has excelled in producing innovative fintech startups. It is one of the fastest-growing ecosystems that has been claimed to be the Silicon Valley of India. Zerodha is one of the biggest participants in this market.

In the past five years, the growth of fintech in India has been dramatic. By 2025, the valuation of the fintech market in India is expected to cross $150 billion. The country is housing several unicorns, like Groww, Razorpay, Paytm, and CRED, which have changed the way Indians are banking nowadays.

Norway

Norway is aiming to become the first country to go completely cashless in the near future. The fintech environment in Norway is seeing some of the brightest days, where there is immense support from the government coupled with a high level of education, making it one of the emerging fintech hubs.

‍

South Africa- Johannesburg

Johannesburg is steadily advancing towards becoming an emerging fintech hub. In the past few years, investors have poured in from all over the world in South Africa, which has increased the rate of investment in the country by almost 50%. There are about 46 startups currently operating in Johannesburg, and the number is steadily increasing. Not only this, a large section of the population currently remains unbanked or underbanked, giving rise to tremendous opportunities for the fintech industry to step in.

Conclusion

Apart from these, there are quite a few other countries that are swiftly climbing the ladder of becoming fintech leaders and hubs like Malaysia, Estonia, the UAE, Argentina, Malta, Mexico, Luxembourg, and Frankfurt. All these countries have commonly shown tremendous opportunities, some due to their talent, some for their respective government aid, and some owing to a large section being unbanked or underbanked. Although the fintech giants are still predominant in the existing hubs, these countries are allocating significant resources to develop their fintech markets. 

‍

By far and large, the growth in fintech has witnessed a sharp upward trend since 2010. Due to its huge market and the prevalence of the scope of technological benefits, the fintech industry has ballooned aggressively. The emergence of fintech startups has amplified globally, resulting in massive investments supplementing fintech growth. And such colossal investments have resulted in an upsurge of fintech unicorns.

What is a Unicorn?

A unicorn is a private entity that values at more than $1 billion. Currently, there are more than 1000 unicorns in the world operating in distinct areas and catering to different markets, like Bytedance in China- a technology provider with a valuation of over $150 billion, Shein in China, with a valuation of over $100 billion, and Stripe, a fintech in the USA, that values around $100 billion.

Scenescape of Fintech

There are about 473 fintech unicorns all over the world, and their total market value is estimated to be a little more than $1.8 trillion. The number of startups that gained a unicorn status in 2021 was around 150; in 2022, the number currently stands at 51.

The largest fintech investors that have played a dominating role in changing the landscape of fintech are:

Sequoia Capital – The world’s biggest venture capital firm, Sequoia Capital has invested internationally in more than 1500 organizations across different fields. The company has invested in more than 31 fintechs across the globe, including Razorpay, Klarna, Chime, etc.

Tiger Global Management – A New York-based venture capital firm, that has the biggest portfolio in terms of investments, including Facebook. The company has a keen interest in the UK and Indian markets, where it has invested in over 20 fintech startups like Revolut, Checkout.com, Mambu, Veriff, etc. 

Ribbit Capital – A venture company, especially known for its fintech investments, that has actively invested in North and Latin American startups. The company has invested in more than 20 fintechs like Nubank, Affirm, Robinhood, Coinbase, etc.

Top 25 Fintech Unicorns in the World

1. Visa & Mastercard – The largest payment processing companies in the world, Visa and Mastercard are currently valued at $450 billion and $350 billion, respectively.
2. Ant Group – A Chinese conglomerate valued at $150 billion, provides innovative fintech solutions. It owns Alipay, the largest Super app in the world.
3. Stripe – Valued at approximately $95 billion, this Irish-American company is a fintech that provides e-payment processing software and API (Application Programming Interface) for websites and applications.
4. Klarna – Klarna Bank is a Swedish entity that provides financial services, majorly focusing on digital payments. The company is valued at $46 billion.
5. Nubank – A Brazillian fintech offering digitalized banking solutions, Nubank is the largest fintech bank in Latin America. Valued at a staggering $45 billion, this company is one of the largest fintechs in the world.
6. Checkout.com – Headquartered in the UK, the company provides an online payment platform providing various payment options for several currencies. With a valuation of more than $40 billion, this is one of the largest fintech organizations in the world.
7. Revolut – The epitome of modern-day banking, Revolut provides financial services where customers can manage their money, get prepaid debit cards, operate Forex, trade stocks, and even engage in crypto. Valued at $33, it is one of the most successful fintechs today.
8. FTX – A crypto exchange platform, offering crypto products including leveraged tokens, options, derivatives, etc. Valued at $32 billion, the company is headquartered in the Bahamas.
   
9. Paypal – One of the most popular online payment and money transfer platforms, that has successfully expanded internationally to offer payments and remittances services. This American company has been valued at almost $26 billion this year.
10. Chime Financial, Inc. – An alternative to traditional banking, Chime is an online-only bank that offers banking services without charging any fee to establish a wider market. The company focuses on empowering young individuals and people who have trouble with traditional banks by offering them small credit and guidance tools, and opportunities to improve their credit scores. The company aims to bring peace of mind to its customers. Chime is an American company that has been valued at $25 billion.
11. Ripple – A payment solutions provider for the world’s largest banks, Ripple is a fintech that is breaking barriers to bring the best out of fintech. With its cryptocurrency XRP, Ripple is going against the current to create new possibilities that have earned it a highly reputable position in the fintech fraternity. Valued at $15 billion, this American company is all set to awe us with its inspiring mission and strategies.
12. Blockchain.com – A company focused on offering crypto solutions, like the most popular crypto wallet, Bitcoin transactions, a platform to study Blockchain, APIs to integrate Bitcoin, etc. This $14 billion London-based company has been a pioneer in advancing the engagement and integration of Blockchain and Bitcoin which are said to be the future of fintech.
13. Plaid – A company based in San Francisco, USA, Plaid offers third-party fintech infrastructure for data transfer between fintech providers and banks that enables parties to share user data. The company is currently valued at $13.5 billion, making it one of the biggest fintechs in the world.
14. Brex – Brex is an American company offering everything under the fintech umbrella of credit and loans. This $12.3 billion organization provides business loans, company credit cards, spend management software, and more to establish an efficient fintech credit system.
15. Robinhood – A stock trading and investing platform that charges no commission, Robinhood is valued at $11.2 billion. This American company offers free tools to help people trade and shape their financials in the trading spectrum.
16. Gusto – A payroll services company that provides easy and intelligent payroll systems to help companies efficiently manage employee payrolls, benefits, and more. Valued at $10 billion, this American company has gained a large market in this niche.
17. N26 – A German company valued at $9.23 billion, N26 provides digitalized banking solutions, including money transfers, investments, and many more banking services.
18. Rapyd – A digitalized payment solutions provider that helps businesses operate globally. The solutions focus on providing fintech-as-a-service that enables businesses to scale internationally without creating fintech infrastructures. Valued at $8.75 billion, this UK company offers payment solutions, including remittance, transfers, wallets, etc.
19. Coinbase – The company provides a secure crypto platform that enables sales, purchases, and transfers of cryptocurrencies. Headquartered in the USA, the company is currently valued at $7.8 billion.
20. RazorPay – The company is a payment gateway provider that offers a variety of payment solutions for businesses. Incorporated in 2014, this $7.5-billion-dollar Indian company is steadily increasing its global market.
21. TransferWise – Incorporated in 2010 in London, the company has established an online money transfer system to enable easy cross-border transfers using artificial intelligence to automate currency rates. The company is rapidly expanding and is currently valued at $5 billion.
22. Munzo – Munzo offers an online banking platform based on open banking. Based in the UK, the company values at $4.5 billion presently.
23. Affirm – Headquartered in San Francisco, USA, that focuses on Buy Now Pay Later (BNPL) services for consumers by providing them installment loans at the point of sale. Valued at $4.5 billion, this company has recently gained tremendous global attention for its tactics.
24. Lemonade – A top-rated Insurance company, Lemonade covers several types of insurances using artificial intelligence to stand out in the InsurTech crowd. The company’s value stands at a little more than $4.5 billion, making it one of the largest InsurTechs in the world.
25. Hippo – Another American InsurTech valued at $3 billion, Hippo provides quick and efficient insurance solutions at competitive prices.

Closing Thoughts

The valuation and rate of investments in the fintech industry are growing aggressively, increasing competition and service standards across the globe. As more and more companies enter the market, the adoption, use, and need for innovative solutions increases. With national boundaries gradually fading, users can have a wider and more empowered reach, enabling a more powerful and efficient financial system across the globe.

2021 saw many companies becoming unicorns as investments poured in from all corners of the planet. Although the number of fintech unicorns in 2022 is comparatively much lesser, the volume of investments is remarkably higher, implying an enormous potential for fintech growth in the coming years.

The Indian market has recently become the emerging front-runner in the fintech world. The last five years have shaped the market in a way that has helped India gain steady momentum to become one of the world’s fintech leaders.

Facts and Figures
–         There are more than 6500 fintech startups in India
–         The Indian market is expected to cross $150 billion in valuation by 2025
–         There is a wide variety of fintech startups in the country that have brought a diverse range of fintech services, like payments, investments, stock trading, credits, insurance technology, regulation technology, asset management, UPI (Unified Payments Interface), and much more
–         India has one of the highest numbers of fintech unicorns
–         The country has the highest fintech adoption rate in the world

Indian Fintech Market Insights

The Indian market boasts of one of the highest numbers of smartphone users in the world. The banking and financial institutions in India started moving towards technological supplements a few years back. Around the same time, fintech startups started emerging in the country, offering different services and platforms for digitalized payments, easy investments, stock trading, etc., which gained considerable success owing to their ease of use and aggressive marketing.

During the pandemic, amidst the heavy restrictions where people compulsorily had to look for contactless and cashless options, the fintech industry got propelled into a different dimension, where now fintech has become a part of people’s everyday lives in India.

Factors Influencing the Astronomical Growth of Fintech

With India robustly moving its way to the top of the fintech pyramid, it is essential to analyze the factors aiding in this aggressive growth.

Government

The Indian government focuses on creating an empowered and strong economy, because of which, startups all over the country receive tremendous support not only on the regulatory front but also in providing adequate financial and logistical support that would ensure lesser obstacles. By stressing Make In India, the government has opened doors for people to create and build their small and big businesses using the resources available in the country. To enable fintechs to have a broader reach, the government has done exemplary work in extending internet access to all corners of the country. The government is also targeting to increase the rate of digital literacy in the country, which would help increase the involvement of people. Several Government programs are helping build a strong, and independent economy.

Investments

The influx of investments in the country has immensely helped the growth of fintech. The valuation of the fintech market in India is expected to grow by more than $150 billion by 2025. Out of the 189 unicorns in the world, 21 of them are from India. Housing more than 6500 startups, India has become a lucrative fintech investment option for investors.

Population and Demand

The demographics in India are also a big reason for the immense success of the fintech industry. India has the largest youngest population in the world, which combined with the highest number of smartphone users makes it ideal for industries like fintech, where the demand for innovative, convenient, and easy options is extremely high. India has also clocked in the highest number of minutes spent on fintech applications, which reflects the perfect ecosystem for a blooming fintech market.  

Major Fintech Areas in India

The Indian market has a broad spectrum of fintech, where organizations are targeting different categories to provide innovative solutions. The main areas that are most dominant are:

Digital Payments

The digital payments industry is growing at a competitive rate, and it is expected to cross $10 billion by 2026. The success of digital payments has been inspiring for onlookers, with digital payments significantly replacing cash payments. Going by this replacement rate, almost 65% of the transactions will be digital payments by 2026.

E-Payments in India have had the most successful journeys compared to other segments. This category includes different platforms like wallets, automated bills, QR codes, UPI, etc. The integration of third-party applications with financial institutions using APIs is one of the most popular concepts that has materialized into an independent market. The largest players in this area are Paytm, Razorpay, PhonePe, Mobikwik, and Google Pay.

Credit

The demographics in the country have heavily contributed to the success of the lending business. The youth wants to make purchases, where they have options of instant credits, Buy No Pay Later, EMIs (Equated Monthly Instalments), etc. The credit industry in India includes all types of lending, including peer-to-peer lending and platforms that get loaners and borrowers together. Because of the elaborate lending system, some fintechs are solely focused on offering credit score services. RazorPay, Mswipe, and Google Pay are leading the credit market in India.

Investment Management

The investment market is another major sector that has gained tremendous ground in the past few years. Various applications in India are offering services, like stock broking, portfolio management, easy trading, financial advising, investments in digital gold, mutual funds, and more. With such applications, people can have easy access to market data, ready trends, reports, future predictions, and customized news. The leaders in this field are Zerodha and Smallcase.

Digital Banking

Digital banking has taken over the Indian market by storm. Numerous third-party applications are partnering with traditional banks and financial institutions to bring neo banking and open banking services to the people. Services like automated onboarding, customer background checks, eKYC (Know Your Customer), and others, are changing the face of banking altogether. YONO and Krazybee are the dominant stakeholders in this space.

InsurTech

InsurTech is a rapidly growing area in the Indian market. PolicyBazaar is the pioneer of building an insurance comparison platform that ties up with different insurance providers and advises the users on the best suitable insurance packages available. Not only this, there are different types of insurance services covered like electronic insurance, employee insurance, life insurance, asset insurance, etc.

RegTech

The compliance segment in fintech is an integral part of the industry overall. As more focus grows on systematizing the regulatory field the world over, the Indian market too is readying itself. RegTech is still an emerging field in India, but it is not an ignored field. Numerous fintech organizations are competing in this space, and sooner or later, we will see Indian RegTech unicorns too.

Final Thoughts

The Indian market is a key fintech player that is rapidly expanding in terms of valuation, innovation, and opportunities. Prerequisites like a young, internet-dependent population, together with the government support, available talent, and pouring investments, make an ideal setup for fintechs to flourish. The success of the Indian fintechs is already on the rise, and it is only with time that we’ll see if the Indian market makes it to the top or not.

‍