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‘Cross-country tie-up only way to win fintech market’

Jan 23, 2019 by The Passage Team
‘Cross-country tie-up only way to win fintech market’

With the crash of the P2P lending market in China, many Chinese fintech companies are showing interest in the Indian market. Founders believe it’s better to enter a regulated market than struggle with unregulated ones.

Speaking about the future of digital payments in India and China, Zengxiao Jin, CEO of One Card, a virtual credit card product in 9F Group, said, “We see a great opportunity in India. Cross-country collaboration is the only way we can win fintech market here.”

Jin was addressing a gathering at the India-China Fintech Summit 2019, hosted by The Passage on Tuesday.

“It’s quite amazing how Chinese citizens can get so used to storing their money in some virtual place. It requires a lot of education and starts with the younger generation. I have a lot of hopes for UPI to become successful,” Jin added.

He further appreciated that the Indian fintech market was regulated by the RBI, since this ensures lending companies play by the rules rather than enter the market first and figure out what the rules are — something they’re used to in China. According to a Bloomberg report, the lack of oversight has led P2P loans ballooning from almost nothing in 2012 to CNY 1.22 trillion in December 2017.

P2P lending, which was at its peak in China with 10% of the regular lending, is now back to 1-2%, said Narayan Ramachandran, co-chairman Unitus Capital, at the summit.

It’s easier to start a company, access capital

Ramachradran, who was a keynote speaker at the summit, said the field of P2P in India was still very small, and because user protection was put on priority P2P may not develop too fast in India. “Even if it develops, it will be subject to strict supervision.”

Ramachandran thought India’s payments sector did develop very well, but for consumers, not for companies. "Unlike China, the user acquisition cost in India is higher, he added.

Narayan Ramachandran, vice chairman of L Catterton Asia and co-chairman of Unitus Capital.
Narayan Ramachandran, vice chairman of L Catterton Asia and co-chairman of Unitus Capital.

“The user base of Internet finance in India is not as big as China. Two major Internet finance giants in China — WeChat & Alibaba — started as communication and ecommerce platforms respectively, and then launched the payment platforms. As a result, the user acquisition costs in China were low because users were coming from social media or e-commerce,” Ramachandran said.

Summing up his note, Ramachandran said, “I think there is indeed a lot of room for cooperation between China and India, so that India can benefit from trade and China can find a commercial way to cooperate with another big country in Asia.”

India's social media is dominated by Facebook and WhatsApp and it’s one of the biggest markets for them. Like in the United States, they have not fully entered the financial sector. In fact, WhatsApp is just trying the payment experiment is India. Abhijit Bose, head of WhatsApp India, avoided talking about the WhatsApp Payment plan in India, but he noted that it’s now easier to start a company and access capital, while not being busy with reinventing the wheel.

“Online platform business allows you to scale immensely. Once you have infrastructure in place, all you have to do is build services on top of it. The rail road has been built by government entities like NPCI (National Payments Corporation Of India), and private sector companies can open up their services and build new ecosystem on top of it,” Bose said.

The summit organised by The Passage witnessed participation from industry bigwigs like Ganesh Rengaswamy (co-founding partner, Quona Capital), Prayank Swaroop (principal, Accel), Yu Cheng (partner, Morningside Venture Capital), Eric Savage (co-founder, Unitus Capital), Ashish Agrawal (principal, Sequoia Capital) Sanjay Jain (volunteer, iSPIRT Foundation), Morden Chen (general manager-Mobile Monetization, Alibaba Group), Alex Li (general manager-South Asia, Alibaba Cloud), Pranav Pai (founding partner at 3one4 Capital), Dilip Asbe (managing director & CEO at NPCI), Srikanth Nadhamuni (CEO & co-founder, Khosla Labs), Ravi Garikipati (Sr vice president & head of Fintech, Flipkart), Mukesh P Kalra (founder & CEO, ETMONEY), Akshay Mehrotra (co-founder & CEO,, Madhusudan E (CEO, Krazybee), Wenjun Ye (head of international, QuantGroup), among others.

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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