COVID-19 crisis: How fintechs are changing the payment norms

With contactless banking and social distancing being the new buzzwords across the world, thanks to the lockdowns initiated due to coronavirus, there is going to be a substantial change in the way businesses will be interacting with each other and customers. Driving this change from the frontline will be the Fintech industry, which is adapting itself to the challenges that will soon be coming its way.

According to deVere Group, one of the world’s largest independent financial advisory organisations, fintech apps have seen a 72 percent increase in usage in Europe, since the initiation of the lockdowns. Glint, a gold purchasing app, has also reported an incredible 718 percent increase in its traffic—pointing to a major shift in the way customers are buying and consuming services. Along with similar encouraging figures from the Asian & Middle East markets, it seems safe to conclude that Fintech apps are going to play a major role soon by facilitating access to financial services.

Closer home, India has the highest Fintech adoption rate globally at 87 percent as compared to the global average of 64 percent. This growth rate is well poised to increase at a CAGR of 20.2 percent during 2017-21 to reach an overall transaction value of USD 92bn, a considerable increase over the USD 65 bn, India achieved in 2019, according to Invest India--the National Investment Promotion & Facilitation Agency of India.

Within the Fintech industry in India, digital payments are the major driver of growth, with OTAs (online travel aggregators), various booking portals, online food aggregators, retail and utility bills being key contributors. These are also the sectors that have been severely affected by the lockdown, forcing businesses to adopt a wait & watch situation.

Since the lockdown was enforced, there has been an increase in card-based transactions and digital payments in general. Nevertheless, it’s a bit too early to predict whether this will continue to remain a long-term trend, experts point out. Similar thoughts are also being echoed across the globe, in Europe, America, and other developed markets.

To encourage contactless transactions, global payment firms are focusing on innovative initiates while companies like Mastercard are contributing by revising the transaction limit. WorldRemit, for instance, has tied up with Paykii, to facilitate cross border payments easily. In India, banks and fintech firms have upped their efforts in dealing with the pandemic crisis. For example, ICICI Bank has begun offering banking services through WhatsApp to discourage branch visits for basic banking services.

As the pandemic gradually settles down, the Fintech sector is expected toinnovate and offer more interactive and user-friendly apps to meet the needs of both businesses and customers, for a healthy and safe to operate financial environment.