India's Open Network for Digital Commerce (ONDC) and similar public digital platforms are set to unlock over $5 billion in annual revenue by FY30 through financial services integrated into these networks, a report has said.
The report, released on November 19 by Elevation Capital in collaboration with McKinsey & Company, said India’s open digital networks, including ONDC, Ayushman Bharat, and Agristack, are expected to engage over 300 million participants by FY30.
These networks will enable financial services players and apps to capitalise on the opportunity by embedding digital payments, loans and insurance products directly into commerce and supply chains.
The government-backed ONDC alone has set ambitious targets to onboard 1.2 million sellers and reach 900 million consumers within the next four years, creating vast opportunities for financial services companies.
Its open ecosystem allows for innovation, using data like seller reputation scores and transaction histories to offer tailored financial products and enhance credit underwriting.
On October 1, ONDC officially made its entry into the mutual fund space, as part of its broader strategy to expand in the financial services sector and provide access to such products across India.
The launch of mutual funds came after the company, on August 22, forayed into lending service. It also plans to introduce insurance in the near future, Hrushikesh Mehta, senior vice president (financial services) told Moneycontrol earlier.
Also read: Inside ONDC’s financial services game plan over next 18 months
ONDC is just one example of India’s broader initiative to build integrated digital networks.
Ayushman Bharat Digital Mission, for example, aims to digitise healthcare services, having already issued over 59 million health IDs and aim to onboard 3 lakh healthcare providers.
AgriStack, still in development, is expected to benefit more than 2,000 agritech startups by enabling farmer-focused solutions.
Industry leaders acknowledge the potential but emphasise the need for robust mechanisms to build trust and scale.
“ONDC is in its early stages. Transactions are growing, but proper mechanisms and customer assurance are critical to scaling effectively,” a chief digital officer at a leading private bank said on condition of anonymity.
While it is still early days, financial services players will likely decide how to create the most value from these networks, the report said.
Embedded finance: A $25-billion opportunity
Experts are excited about the transformative potential of embedded finance, where financial services are directly integrated into everyday consumer platforms and supply chains beyond just open digital networks.
Embedded finance is expected to create a $25 billion revenue opportunity by FY30.
Large platforms in e-commerce, travel and mobility are particularly well-positioned to deliver contextual financial services due to their vast user base, high engagement and trusted brand presence.
By FY30, these platforms are projected to serve 400-450 million users, unlocking a $10-15 billion revenue opportunity.
“This transformation has been a decade in the making, fuelled by the creation of public rails and DPI (such as UPI, KYC, GST), the establishment of large digital channels (spanning both consumer and supply chains), the widespread adoption of new-age core software and middleware, and the acceleration of manufacturing innovation,” Mridul Arora and Vaas Bhaskar, partners at Elevation Capital, said in a joint statement.
Embedding financial products is the most effective way to drive product-market penetration. This is not just a topline opportunity but also as a way to improve retention, increase affordability, and create significant new value in distribution, manufacturing and software, they said.
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