India Fintech Market 2021-2026

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    • Indian FinTech is one of the top three markets by value of capital funding and investments in the sector (behind USA and UK) with nearly USD 3.1 Billion of funding in 2019.
    • The announcement of demonetization in 2016, revolutionized India’s digital payment landscape as liquidity crunch arose. Technologies such as AI, blockchain, IoTs were introduced and since then Indian fintech market is growing rapidly with rate of approximately 100 % from USD 1.8 Billion in 2018.
    • COVID19 is also considered as another landmark in fintech industry. In early covid period, it disrupted the business models of many FinTech, but throughout the year it has jumpstarted the digital or contactless payments and neo banks again. Between January and July 2020, fintech investments reached $1.47 billion which is approximately a 60% jump when compared to 2019.
    • Online brokerages were gaining traction, encouraging investors to buy equities, IPOs, ETFs, mutual funds; UPI payments were skyrocketing; more and more people turned to online banking to socially separate themselves and keep themselves safe; and insurance transactions grew.
    • Key industry players such as Zerodha, Paytm, PhonePe, and Groww, among others, witnessed growth in activity and users as people turned to digital solutions for investing, banking, and contactless payments.
    • Partnerships with banks and fintech are going to bring new dynamics in the industry. They will take advantage of recent developments in the behaviour of customers and use of technology and capitalize on the higher levels of trust people have in tech to provide services that effectively engage with consumers. 2021 will also see hybrid banking become more mainstream. In a hybrid banking model, financial institutions combine the brick-and-mortar physical banking approach with virtual banking
    • The recent government initiative of establishing Fintech hubs and an allocation of INR 15 billion to boost digital payments will further immunize the industry in the coming years.




    Technology has been a great enabler in the growth of a digital economy. Over the years, Indian banks and financial services providers have gradually adopted technology to improve reach, customer service and operational effectiveness with evolving market and technological advances.


    The amalgamation of finance and technology which is known as “Fintech” is driving a financial inclusion revolution in the country to bring a change in the quality of life of underbanked or unbanked communities that accounts for around 80 % of the Indian population.



    infographic: India Fintech Market, India Fintech Market size, India Fintech Market trends and forecast, India Fintech Market risks, India Fintech Market report



    Indian FinTech is one of top three markets by value of capital funding and investments in the sector (behind USA and UK) with nearly USD 3.1 Billion of funding in 2019 registering a growth rate of approximately 100 % from USD 1.8 Billion in 2018 and have a global adoption rate of 87% which is higher than the global average of 64 %.


    Payments have been at the forefront of India’s digital revolution, with digital payment transaction volumes (worth USD 3.5 trillion) touching approximately 24.13 billion in 2018.


    The demonetisation drive launched in November 2016 and lucrative returns on mobile wallets and UPI transactions (which led to their widespread adoption) have been key to driving exponential growth in digital transactions. In addition, the rise of digital commerce, innovation in payments technology using AI, blockchain, the Internet of Things (IoT) and real-time payments; and the introduction of mobile point of sale (POS) devices have led to a reduction in the cost of acceptance infrastructure and also contributed to growth.


    Government-led Initiatives: The Indian payments landscape has been revolutionized by the regulators and the central bank’s proactive initiatives, e.g., India Stack and UPI. India has emerged as one of the most exciting markets for digital payments across the world. Last year, home-grown payment networks (Ru Pay and UPI) took the lion’s share of the total digital transactions, i.e., 65%, showcasing how their efforts have been in the right direction for achieving targets.


    Innovations in Digital Payments

    • National Common Mobility Card (NCMC): ‘One nation, one card’

    The Indian Government recently launched the NCMC, also labelled as ‘one nation, one card’. This interoperable, contactless transport card enables consumers to make multiple payments, including transit to toll and retail shopping, and also allows for money withdrawal. With the Government’s emphasis on smart city projects, the transit sector is set to witness rapid growth. These cards would then play a key role in driving the adoption of digital payments in this sector.


    • Merchants are increasingly leaning towards solutions which make payments processing passive.

    They want the payments to happen instantly, invisibly and conveniently for consumers. Behind this evolution is the constant endeavour to make the purchase process fast and frictionless, and thus reduce shopping cart abandonment. Examples of this trend are Visa Checkout ,American Express eze Click, LoopPay, Apple Pay or Apple Watch, etc.


    • The Internet of Things (IoT) and emergence of cryptocurrencies and blockchain

    IOT brings consequences and opportunities for consumer payments and new commerce.  By 2025 there are likely to be around 30 billion connected devices. The “things” that can be interconnected range from thermostats to automobiles to refrigerators to lightbulbs. For instance, cars can talk to each other, and the refrigerator can by itself place groceries orders.


    Cryptocurrency and blockchain technology would act as a game changer in the field of money transfer ,consumer payments  and e-commerce in India  after Supreme court revoked the ban on use of cryptocurrency that was imposed by RBI.


    • Tokenisation – A method to secure digital payments

    Tokenisation is the process of replacing sensitive information like card/account details with a random value that is provided by the bank in the form of a token. During the transaction, it is the value on the token that is exchanged and not the user data. This ensures that merchants cannot store customer data, thus reducing the chances of fraud. With the RBI releasing a circular permitting its use in select use cases, tokenisation is set to play a crucial role in securing payments in the country.






    The Indian Government began to liberalise the Indian Banking Industry with the introduction of technologically savvy banks. Various payment technology was pushed such as MICR, electronic



    funds transfer to boost the banking sector but most of them were government driven and lacked financial innovation.

    FinTech’s began to dominate the US and UK landscape, they started penetrating in the Indian banking Industry by offering various consumer centric services. FinoPay Tech and EKO India were the two major start-ups that built their model around the banking correspondent model (BC Model) which was used to increase penetration in rural areas at lower cost using basic technology with the help of agents.



    This period witnessed the emergence of  major fintech start-ups such as Oxigen,Paytm, Free charge, Mobikwik in the field of mobile wallets-bill payment and mobile recharge services



    From 2010, there have been multiple fintech start-ups that have mushroomed in different segments such as lending (100+),personal finance management (40+) and investment management (90+) start-ups.



    Demonetisation introduced in November 2016  is considered as the biggest boost to Fintech in India and Introduction of India stack (Aadhaar / eKYC / UPI / eSign etc) simplified as well as disrupted Payment, Lending, Insurance and Wealth business. While wallets collapsed due to UPI, Lending FinTech’s/InsurTech prospered. Wealth business went through challenges due to Direct plans of Mutual Funds.


    2019-till date

    India stack continues to positively impact FinTech’s with newer services. NeoBanks have emerged as a segment of choice for investors. Neo-Entrants are introducing “Fintech as a service line” in their current business models by either developing it organically or buying out fintech’s. Lending start-ups are going through the evolution phase. Complex areas like Trade Finance and B2B start-ups are getting support in the new wave.



    • Similar to 2016 demonetisation, Covid-19 pandemic is another landmark development for the fintech firms. It has jumpstarted the digital or contactless payments again after the reported slowdown due to the virus impact.
    • The lending companies have been severely impacted because of COVID-19. While pandemic has accelerated Indian customers’ adoption of digital financial products, the new account openings for neobanks were already above pre-Covid levels.
    • Significant investments are being made by established banks and insurance companies, which led to acquisition and more investments from investors in 2020. In 2021, there will be increased momentum in partnerships between fintechs and banks as Finance Minister urged banks to use a Co-origination model. The announcement reflected the acceptance of fintech firms by the large format traditional financial institutions.
    • Challenges for Fintech startups during mid of COVID19:
      • The pandemic has disrupted the business models of many FinTechs
      • FinTechs are likely to face a prolonged period of softened demand as consumption decreases across India
      • Due to travel restrictions, startups are struggling with new business origination
    • Strategies taken by most of the fintech firms:
      • Launched new products
      • Improved/optimized existing products
      • Identified and targeted new customer segments
      • More customer centric approach
    • It is expected that by the fourth quarter 2021, companies will start witnessing GNPA levels touching 3 to 4 times of pre-pandemic level and there could be some spill over even into the next fiscal year. (CNBCTV18).
    • With the expected liquidity squeeze in the initial part of the year, cooperation in the space of co-lending may be a major theme for the coming years. Many players can look for large partners in the banking space to achieve pre COVID-19 volume levels in Q4 and then subsequent growth, but their collection efficiencies and performance during these test times will be the determining factor.
    • In the Union Budget 2021, government of India announced the setting up of a FinTech hub in Gujarat International Finance Tec (GIFT City). The FinTech Hub will help create around 150,000 jobs and accelerate the use of artificial intelligence, machine learning, etc. It will drive tech-enabled tax functioning which will illuminate the increased importance of digitisation.
    • The budget 2021 also allocated INR 15 billion to support and boost digital payments. Creating a ‘bad bank’ is also an interesting move, aimed at moving bad assets of banks to an asset reconstruction company (ARC) and an allied structure to buy out and turn around stressed assets, particularly of public sector banks (PSBs).



    India has ~2,200 fintech start-ups. Bengaluru and Mumbai lead the momentum in FinTech, and together, these cities represent 42% of the start-up headquarters. Apart from the top five FinTech destinations, which include Mumbai, Bangalore, New Delhi, Gurugram, and Hyderabad, the rest of India accounts for 738 FinTech start-ups.


    City Wise Breakup (Top Ten Cities )

    City Number of Fintech Head quarters
    Bengaluru 447
    Mumbai 437
    Delhi 208
    Hyderabad 133
    Gurugram 128
    Chennai 104
    Pune 88
    Noida 77
    Kolkata 47
    Ahmedabad 35



    Between January and July 2020, fintech investments reached $1.47 billion which is approximately a 60% jump when compared to 2019. The last 4-5 years have been golden for the fintech business and India is definitely on a path of thriving success in the following years.


    Areas Fintech Segment Number of Fin techs Examples
    A.     Credit 1.    Peer-to-Peer Lending

    2.   Crow funding

    3.   Market Place for Loans

    4.    Online Lenders – on-book lending by NBFCs

    5.     Credit Scoring Platforms





    Loan Meet, Lending kart,

    Lenden Club

    B.     Payments 6.   M-Wallets and PPIs

    7.   Merchant services and POS services.

    8.   International Remittances

    9.   Cryptocurrencies






    Oxigen, Razor pay

    C.     Investment Management 10.Robo-Advisors

    11.  Discount Brokers

    12. Online Financial Advisors




    Zerodha, Robo-Capital ,Small Case



    D.    Personal Finance Management 13. Tax Filling and Processing

    14.Spend Management and Financial Planning

    15. Credit Scoring Services







    E.     Bank Tech 16.Big Data

    17. Blockchain

    18.Customer Onboarding Platforms




    FinMantra, Sticky Note,Riskcovry

    F.     Insurtech 19.Insurance Aggregator

    20. IOT, Wearables and Kinematics



    Policy Bazaar, Policy Bachat,

    Plan Cover

    G.    Others 748




    The next five years hold immense potential for both Fin Techs and incumbents to revolutionise the Financial services landscape and uplift India’s economy by driving the consumption story. However, success in this digital economy would be dictated by an organisation’s capacity to innovate, along with its ability to manage partnerships across both Financial Services and non-Financial services players to provide financial solutions at the point of consumption and increase its adoption.


    Increasing geopolitical tensions between USA and China and the pandemic can act as cornerstone that can help the Indian Fintech ecosystem to grow at an exponential rate as the country stands as in a direct benefit in attracting companies to migrate and grow in an ecosystem that is robust, dynamic and immune to economic and political setbacks.



    • PolicyBazaar
    • Zerodha 
    • LendingKart
    • Paytm
    • Billdesk
    • Pine Labs
    • RazorPay
    • Mobikwik
    • CoverFox
    • Cred
    • Clear tax
    • Groww
    • Bharatpe
    • DigitInsurance
    • Zest Money


    Sl no Topic
    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive innovation in the Industry
    10 Technology trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on Point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2021-2026
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2021-2026
    19 Market Segmentation, Dynamics and Forecast by Application, 2021-2026
    20 Market Segmentation, Dynamics and Forecast by End use, 2021-2026
    21 Product installation rate by OEM, 2021
    22 Incline/Decline in Average B-2-B selling price in past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in past 12 months
    26 M&A in past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2021
    29 Company Profiles
    30 Unmet needs and opportunity for new suppliers
    31 Conclusion
    32 Appendix


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