The COVID-19 pandemic has been changing the way we see the world and work around the world. India remains lockout, as field activities were shut down and work-from-home around the board is being enforced. A lot of the fintech startup community will have to sit back and wait to see how the scenario evolves after the official lockout is over.
E-commerce and its impact on Fintech payments
A substantial share of the revenue for fintech who work in payments comes from e-commerce transactions. As online retailers also completely stopped selling non-essential goods in the short to mid-term, or even between a few weeks and a few months, due to the COVID-19 pandemic.
Since the critical products now being sold on such platforms have small margins, India’s private digital payment companies or payment fintech will see their revenues decline. It would be because the amounts and prices of the transactions control their margins. With critical services being delivered more often, the effect on the margins on these low-priced products would have a more dramatic impact on their sales given the higher volumes being delivered.
We’ll see digitization occurring around the board, from procedures, how workers communicate with each other, and also how banks, fintech, and other players meet their customers. Let’s take a look at some cases.
In such days when the potential of the industry is uncertain and fintech’s survival — particularly startup fintech — is doubtful, the government may play a key role in their support. Central and state governments may offer tax cuts, tax holidays, or other opportunities to banks and financial firms that make use of fintech startups’ technology strengths in digitizing their processes—especially in the priority banking field.