Business, Technology

How the Indian Payment Ecosystem is Ripe for Disruption

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This guest column is by Rohit Kulkarni, Country Manager, Payoneer India

Over the past few years, the Indian economy has picked up momentum and has grown at a healthy rate and has emerged as one of the lone bright spot in the stagnant global economy. As a result, the number of financial transactions between individuals, businesses, institutions and other services providers has increased exponentially. Additionally, with the renewed vigor amongst the micro enterprises, startups and local semi-skilled service providers, buoyed by government initiatives such as Smart India, Digital India, Jan Dhan, Skill India and Make in India have led to a boom in the sheer magnitude of online cash being handled in India.

The payments ecosystem in India is witnessing a gradual but steady shift, supported by the onset of consolidation amongst existing market participants and the entry of nimbler & flexible payment solution providers. Not only is the Indian market underserved but also yet to reach the levels of penetrations of other emerging economies in terms of smartphones (per head) & broadband connectivity. In short the opportunity is immense.

The disruption in the existing Indian payment landscape will take place in terms of redefining the present processes, touch points and customer engagement. New commercial models and fresh business thoughts will emerge which will be ‘borderless’ and truly global in nature. The playing field will be thrown open to players catering to specific needs of customers be it on P2P platforms, offline modes or PPI’s.

While other sectors were being disrupted, the Indian payment ecosystem was largely left untouched. That is until much recently and India has a big story to tell through its milestones. An average Indian is now an informed one and is realizing the benefits of technology. This is leading to fast changing consumer behavior and increased entrepreneurial activity which is in turn instigating a lot of disruption and innovation across various sectors.


Spotting the trends off late, there is an increased awareness about various payment methods such as digital payments, mobile payments, etc. as well as hassle free and secure a payment solution which has resulted in a dynamic payment landscape.

The payment vertical in India (globally) is a niche low margin, high volume business but it is a growing opportunity as payments are fundamental to the entire way commerce and businesses operate, both online and offline. The government of India along with various regulators is fostering innovation, encouraging competition and enabling an environment which is allowing disruption to thrive.

India has a plethora of organized and unorganized merchants and businesses who are striving to expand and venture into global markets in order to position themselves to benefit in today’s highly competitive market. Average Indian merchants are no longer doing business the traditional way; they are upping their reach, they are expanding their channels of income and are looking for cheaper and more cost-effective ways to conduct cross-border business.

When it comes to Indian businesses conducting cross-border transactions, there are multiple friction points that these SMEs face on a day to day or occasional basis, however miniscule they may be. It may be easy to establish operations or a means to conduct business but the costs involved in currency conversions and bank fees often results in little to no profit. This urge for businesses to expand along with the need to address these friction points is pushing innovators and disruptors to come up with news ways to transact and create different forms of financial transactions. In spite of high fees associated with bank transfers, the vast majority of cross-border payments received into India are still going through the banks.

Within a span of a few years, India has seen a rise in the number of players in the Indian payment arena, each contending to offer more disruptive/innovative/flexible solutions than the other. These players consist of traditional players such as banks, payment aggregators and intermediaries who are individually and collectively (consciously or unconsciously) disrupting the payment ecosystem of India. Each of these players, by building on cost-effective intuitions, are trying to create a framework which enables SME’s and entrepreneurs to conduct business globally at affordable costs anytime, anywhere and using any channel.

India is the perfect market for financial disruption right now. While the full impact of this disruption will play out over the course of a few years, businesses and consumers alike are ready and they are waiting. India is ready to make the big leap.

Disclaimer: This is a guest column. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s).

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  1. 1

    Hi Mr. Rohit,
    This is Rakshith and my email id is – I am India Country Manager of a US start up organization ‘Perfect Internet Inc’ I am new to Payoneer. Applied for a withdrawal (30022725) of $362 which got rejected. I need and request your urgent intervention as I have huge sum lined up for withdrawal but I am unable to apply for it due to this rejection. I already replied to the customer care mail (Reference Number: 160828-004715 Customer ID: 17258655). My mobile no. is +91 9059290809. Thanx and regards

  2. 2
    • 3

      Hi Shibhasish,

      I am sorry to hear that you feel this way. I would request if you could share with me your email id and I would be happy to answer any queries or address any of your concerns.

      Rohit Kulkarni

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