PDF PwC's FinTech Insights February March 2023

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PwC insights of the month

Embedded financial services in India: Opportunities and strategies for growth

India Stack has enabled the foundational blocks of digital transformation to accelerate the adoption of digital tech in financial services by combining various infrastructural and financial rails including Aadhaar, Unified Payments Interface (UPI), secure data access (account aggregators) as well as initiatives and open networks such as Open Credit Enablement Network (OCEN) and Open Network for Digital Commerce (ONDC). This, coupled with improved consumer access, reach and technology proliferation, has opened the doors for digital innovation across the industry.Read more

From around the web

The February–March period in 2023 witnessed some significant developments in the global FinTech ecosystem. A few of these developments have been curated and are outlined below.

Global

• As per a report by Juniper Research, credit cards issued through digital platforms will reach 120 million in 2023.Read more

• European open banking platform TrueLayer has teamed up with UK credit management app Incredible to support variable recurring payments (VRPs).Read more

• Digital payment infrastructure provider PPRO has extended its services to South Korea by integrating with local cards and an e-wallet company.Read more

• The Paladin Group, an InsurTech digital brokerage, and Dais Technology, an insurance technology provider, launched UnderwriteGPT – a generative AI underwriting tool.Read more

• Western Union and Beforepay offer ‘send now, pay later’ service to consumers for international money transfers.Read more

• Zenus Bank, a digital bank making US bank accounts available internationally, has become the first bank to launch a Visa Infinite debit card to a global audience.Read more

• Sure, an InsurTech that aims to unlock the potential of digital insurance, has partnered with FinTech Esusu to offer renters insurance.Read more

• Munich Re has partnered with InsurTech Paperless Solutions Group (PSG) to launch a risk assessment and e-application solution to transform life insurance underwriting.Read more

• Copal launched a family payments app initiative in Egypt.Read more

• MUFG, Japan’s largest bank, launched a USD 100 million fund for Indonesian start-ups.Read more

Funding

• Brookfield Reinsurance has entered into a definitive merger agreement to acquire Argo Group International Holdings in an all-cash transaction valued at approximately USD 1.1 billion.Read more

• Trade financing firm Marco has secured a USD 200 million credit facility from middle market lender MidCap Financial and asset-based private credit specialist Castlelake.Read more

• Equisoft, a Montreal-based insurance and investment software developer, has raised USD 125 million in equity investment.Read more

• Abound, a UK FinTech company that uses open banking and AI to provide better loan deals to consumers, has scored GBP 500 million in a mixture of debt and equity finance.Read more

• Digital investing giant eToro has reportedly raised USD 250 million in a funding round with valuation of USD 3.5 billion.Read more

• Kredivo, a buy now pay later (BNPL) service for consumers in Indonesia and Vietnam, has reportedly raised USD 270 million in an oversubscribed Series D funding round.Read more

Regulation

• The UK government has unveiled proposals to put crypto assets into the same regulatory regime as traditional financial services.Read more

• The Consumer Financial Protection Bureau (CFPB) has proposed a rule to curb excessive credit card fees that cost US families around USD 12 billion a year.Read more

• EU regulators (EBA, EIOPA and ESMA) hold a public meeting to discuss the Digital Operational Resilience Act (DORA).Read more

India

• Indian FinTech Decentro launched operations in Singapore.Read more

• PhonePe introduced UPI International to the UAE, Singapore, Mauritius, Nepal and Bhutan. It will be available across merchant outlets that have a local QR code in all of these countries.

• PhonePe, Google Pay accounted for 81% of transactions in February.Read more

• A UAE-based financial services company, Lulu Exchange, signed an agreement with an Indian private bank to strengthen cross-border payments between India and the Gulf Cooperation Council (GCC) region.Read more

• India’s retail giant Reliance will start accepting Central Bank Digital Currency (CBDC) at stores.

• The Reserve Bank of India (RBI) and UAE central bank have signed a pact for promoting various emerging areas of FinTech – especially CBDC cross-border transactions.Read more

• India and Singapore launched UPI–PayNow linkage.Read more

• PhonePe continues its funding spree with a USD 200 million raise from its parent company, Walmart.Read more

Incumbent FinTech initiatives

Here are a few incumbent FinTech initiatives launched by Indian financial institutions in February–March 2023:

• CRED forays into BNPL, tap-to-pay service.Read more

• The RBI and National Payments Corporation of India (NPCI) launched ‘UPI One World’ for foreigners at G20 with Transcorp’s ‘@trans’ handle.Read more

• Cashfree Payments launched ‘Co-lend’: a fully automated escrow management solution for co-lending.Read more

• ICICI Bank launched digital solutions for participants of capital market and custody services.Read more

• Indian Overseas Bank introduced an electronic bank guarantee (e-BG) scheme with National e-Governance Services.Read more

• FinTech EaseMyDeal launches a unique scan and pay process via its credit card.Read more

• Tide and WE Hub launched ‘Sarthika’ to operationalise Government schemes for women micro, small and medium enterprises (MSMEs).Read more

• Airtel Payments Bank launched BizKhata for small businesses and merchant partners across the country.Read more

• Cheq launched a UPI-enabled payment wallet for foreign tourists.Read more

Regulatory developments

A few important regulatory developments in the Indian FinTech sector are highlighted below.

• The Securities and Exchange Board of India (SEBI) made know your customer (KYC) mandatory for e-wallets used to invest in mutual funds.Read more

• The RBI gave in-principle approval to 32 entities to operate as online payment aggregators.Read more

• The Government proposed changes in the Banking Regulation Act and other laws to enhance investors’ protection.Read more

Top FinTech deals and partnership news – India

• India’s anti-money laundering laws will now apply to crypto transactions.Read more

Investments

The Indian FinTech ecosystem received a significant amount of funding in the months of February to March 2023.

A few of these are highlighted below.

Start-up Sector Amount raised Lead investors Source

Mintifi Lending USD 110 million PremjiInvest, Norwest, Elevation

Capital Read more

Bike Bazaar Lending USD 10 million Various institutional investors Read more

Growfin Cash

management USD 7.5 million 3one4 Capital and others Read more GrayQuest Lending USD 7 million Pravega Ventures and others Read more Stable Money Wealth

Management USD 4.5 million Matrix Partners India and

Lightspeed Ventures Read more

Nimbbl Payments USD 3.5 million Global Founders Capital, Sequoia

Capital India and others Read more Finsire Lending USD 1.3 million iSeed, Spark Capital and others Read more

Partnerships

The FinTech ecosystem saw a diversified set of partnerships built across different sectors. A few handpicked partnerships that developed in the Indian FinTech space in February–March 2023 are listed below.

Financial firm Partnered with Sector Purpose Source

IRIS Vayana Supply chain

finance To provide GST compliance services, finance facilities to MSMEs

TripMoney Cover Genius Insurance To offer ‘cancel for any reason’

travel protection Read more