Snapshot
India - A Global FinTech Superpower
India is amongst the fastest growing Fintech markets in the world. Indian FinTech industry’s market size is $584 Bn in 2022 and is estimated at ~$1.5 Tn by 2025.
The Indian Fintech industry’s Total Addressable Market is estimated to be $1.3 Tn by 2025 and Assets Under Management & Revenue to be $1 Tn and $200 Bn by 2030, respectively
Major segments under Fintech include Payments, Digital Lending, InsurTech, WealthTech
- The Payments landscape in India is expected to reach $100 Tn in transaction volume and $50 Bn in terms of revenue by 2030.
- India's digital lending market was worth $270 Bn in 2022 and is expected to reach $350 Bn by 2023.
- India is the 2nd largest Insurtech market in Asia-Pacific and is expected to grow by ~15X to reach $88.4 Bn by 2030; India is poised to emerge as one of the fastest growing insurance markets in the world.
- The Indian WealthTech market is expected to grow to $237 Bn by 2030 on the back of a growing base of retail investors.
- Bn
Number of digital transactions in FY 2023-24
- INR Lakh Cr
Value of digital payment transactions done via UPI (FY 2022-23)
Fintech Unicorns
- $ Bn
Fintech Funding (2014-2022) (approx)
3rd largest fintech ecosystem globally
Over 3000 fintech startups are registered by DPIIT in India
India accounted for 46% of all real-time transactions worldwide in 2022
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
Industry Scenario
Fintech Funding & Valuation
The Fintech sector in India has witnessed funding accounting to 14% share of Global Funding. India ranks #2 on Deal Volume. The Fintech Market Opportunity is estimated to be $2.1 Tn by 2030. Indian fintechs were the 2nd most funded startup sector in India in 2022. Indian Fintech startups raised $5.65 Bn in 2022. The total number of unique institutional investors in Indian fintech almost doubled between 2021 and 2022, rising from 535 to 1019 respectively.
Digital Payments
- From just 1 Mn transactions in 2016, UPI has since crossed the landmark 10 Bn transactions
- UPI recorded the highest ever volume of transactions in Oct 2024 – 16.58 Bn
- Daily transactions on the UPI platform can touch 1 Bn by 2025
- Digital Payments increased by 76% in transactions and 91% in value (2022)
- A pan-India digital payments survey (covering 90,000 respondents) revealed that 42% of respondents have used digital payments
- Acceptance of digital payments infrastructure has increased from 170 Mn touch points to 361 Mn touch points (increase of 34%)
Regulatory landscape
- India Stack: A set of APIs that allows governments, businesses, startups and developers to utilise a unique digital infrastructure. One of the most important digital initiatives undertaken globally, aimed at putting up a public digital infrastructure based on open APIs to promote public and private digital initiatives. The ‘Indiastack.global’ website serves as a single repository of all major projects on India Stack.
- JAM Trinity:
- Jan Dhan Yojana: The world’s largest financial inclusion initiative, “Jan Dhan Yojna”, has helped in new bank account enrolment of over 539 Mn beneficiaries
- Aadhaar: The world’s largest biometric identification system (1.3+ Bn Aadhaars generated so far)
- Mobile connectivity: India has the 2nd highest number of smartphone users
- Cross border linkage of India’s fast payment systems (UPI & RuPay network – QR code & P2M based payments) with other countries, is aiding in enhancing the global footprint.
- Financial Inclusion: India’s financial inclusion has improved significantly over calendar years 2014 to 2021 as adult population with bank accounts increased from 53% to 78%.
- Financial Literacy: The RBI has set up the National Centre for Financial Education and plans to expand the reach of Centres for Financial Literacy (CFLs) to every block of the. These steps aim to promote financial education across India for all sections of the population.
- Introduction of UPI123Pay and UPI Lite: Allows access to UPI to 400+ Mn feature phone subscribers and facilitates low value transactions in offline mode through on-device wallet.
- RBI Payments Vision 2025: The RBI plans to achieve certain outcomes such as 3x increase in number of digital payment transactions, increase of registered customer base for mobile based transactions by 50% CAGR, increase in PPI transactions by 150%, increase of ard acceptance infrastructure to 25 Mn by 2025.
- Account Aggregator Framework (AA): AA is an advanced framework of sharing consent based financial information between Financial Information Providers (FIPs) and Financial Information Users (FIUs). With 23 Banks onboarded to the AA framework, more than 1.1 Bn bank accounts are eligible to share data on AA. 70.89 Mn users have linked their accounts on the AA framework and shared data. RBI has also notified GSTN as FIP which will enable digital invoice financing and provide much-needed credit to the MSME sector.
GROWTH DRIVERS
India stack
Open API platforms i.e. Aadhar, UPI, Bharat Bill Payments, GSTN
Technological Innovation
Implementation of new business models driven by technologies such as Artificial Intelligence and Machine Learning
Increasing internet & smartphone penetration
India already has the 2nd highest number of smartphone users globally and is the 2nd largest Internet user market. ~1 Bn Internet Users by 2026. The number of households with internet connections with an increase by 46%, reaching 233 Mn households by 2026, compared to 160 Mn in 2021
Favourable Demographics
68% of India’s population is young and 55% of its population is in the age group of 20-59 (working population) in the year 2020 and is estimated to reach 56% of the total population by 2025. By 2030, India will add 140 Mn middle-income and 21 Mn high-income households which will drive the demand and growth of Indian FinTech space.
Financial Inclusion Initiatives
Financial inclusion programmes such as PMJDY, DAY-NRLM, Direct Benefit Transfer, Atal Pension Yojana among others have accelerated the digital revolution and brought more citizens, especially in rural areas, within the ambit of digital financial services
Government Mechanisms to Support Fintech
Industrial Land Bank Portal
GIS - based map displaying available infrastructure for setting up business operations in the state.
Gallery
