In a market dominated by legacy players, innovation in digital payments has helped fintechs create a growing customer base for themselves. Fintechs need to build on this and foster trust further by addressing pain-points, such as customer service, experience and transparency.
Banks continue to remain the most trusted providers of financial services. Engaging in strategic bank partnerships can help fintechs build their credibility and leverage the trust from these incumbents to establish stronger customer relationships. These partnerships are also an effective way for fintechs to build visibility and get access to a large customer base. Banks in turn, can exploit these collaborations to digitise their own offerings and use technology to better engage with their customers.
With RBI bringing in strict norms to address the cyber security concerns around digital payments, fintech companies need to further strengthen security around payment products. Along with the convenience of digital payments, fintechs need to proactively educate their customers on how to protect their sensitive information. Creating awareness on best-practices to safeguard their personal data & transactions can also be a good engagement tactic and help fintechs build credibility & trust among customers.
API-based platforms developed by tech providers have built ready-to-use solutions that include the latest security features like interceptors, tokenisation, risk-based authentication and more. Fintech companies can make use of these robust solutions and ensure greater security of sensitive customer information and transaction data.
Digital payments in India have been growing at an unprecedented rate, owing to the increasing internet penetration in the last few years.
Despite the increasing internet penetration, cash is the preferred mode of payment in rural and semi-urban India. A few major challenges responsible for this are:
Customers in these areas primarily rely on regional banks and co-operatives for their financial needs. Fintechs can partner with such entities to revamp their current legacy infrastructure to support digital payment technologies. This collaboration is key for fintechs to build trust with the local communities. With their in-depth knowledge of the local customer base, these banks can in turn help fintechs, to educate users about digital payments and aid them in customer acquisition. Co-operatives can also facilitate merchant onboarding initiatives to improve digital payment acceptance in such areas. Offline solutions like dynamic PIN, QR code payments can also help address authentication challenges in areas with poor connectivity.
