top fintech companies is therefore in a hurry to get into this new consumer trend, with several of them offering digital solutions to small merchants. These range from instant loans for digital billing to even geotagging, as companies believe the digitization business of businesses will flourish as the shutdown eases.
Leading UPI player PhonePe, for example, has introduced new features on its popular mobile application that allows customers to track live stores in their vicinity. The Walmartowned payment company has also provided an opportunity to make remote payments – without visiting the stores – directly from the app.
“These features also solve the problem from the grocery side as they open stores not only according to current government rules, but also based on inventory levels,” said Vivek Lohcheb, VP Offline Business Development, PhonePe. “I think the innovations … will make a change in the way customers act according to everyday necessities.”
Investments in online-to-offline (O2O) trading spaces are gaining momentum with Facebook’s acquisition of the multi-billion dollar stake in Reliance Jio and the recent rounds of capital investment by PhonePe, PineLabs and Paytm. However, experts say that the profitability of the payments industry is likely to continue to be a challenge, leading to more players offering value-added services such as lending and insurance.
“Ordinary payment transactions are unlikely to return as there is no fee on MDR,” said Raman Khanduja, CEO, MintOak, an SME payment platform. “The opportunity is to create a platform where banking and SME conditions can thrive. The segment is globally under-banked because there are no salary tracks to take out loans. But with digital payments, financiers are getting more comfortable lending to these companies. ”
Paytm, PhonePe and BharatPe have either launched or have announced small ticket credit to users. WhatsApp Pay has become the latest participant in the club, announcing its ambitions to borrow in a filing with local regulators.
Pinelab-owned MasterCard has also begun to offer lending services through interconnections with NBFCs such as Mahindra Finance, Indifi and Flexiloans, which plans to supplement it with billing services.
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