Cashless ecosystem spells big bucks for fintech startups, to reach $2.

4
billion by 2020
http://articles.economictimes.indiatimes.com/2016-0607/news/73622343_1_fintech-kpmg-india-startups
Supported by the growth in e-commerce, increasing consumer expectations and
spends and an unprecedented smartphone penetration, Fintech startups are set to
rake in the moolah. A joint report by KPMG and NASSCOM titled 'Fintech in India: A
global growth story' predicts the market to double its growth from $1.2 billion to
$2.4 billion in the next four years.
The fintech companies in India are transforming the transactional ecosystem with
new and innovative technologies and backing this transformation are investors.
While the nation as a whole is witnessing an increased investor inclination in startup
funding, the sector, in particular, has piqued investors' interest with the number of
angel deals jumping from 370 in 2014 to 691 in 2015 and investments registering a
multi-fold rise from $247 million in 2014 to $1.5 billion in 2015.
The primary driver providing the platform to these fintech companies to grow into
billion-dollar unicorns are the Indian customers who have shown an unexpectedly
fast adoption rate towards fintech offerings. Key drivers for this change include the
significant growth in both mobile and internet coverage and digital payments
processing in public services. This deep and fast growing penetration into the Indian
population base offers fintech firms an opportunity to address the legacy issues of
low banking penetration (53%) and dormancy (43%) in the Indian banking sector.
Payments and financial inclusion have gained major market attention in India. At the
same time, there exists a strong case for investing in the lending and security
biometrics space of fintech. Specifically, P2P lending and remittances are the
current trends in the Indian fintech space.

No credit card? Bengaluru-based fintech startup ZestMoney has the

answer
http://yourstory.com/2016/07/zestmoney/
E- Commerce industry average states that 75 percent of transactions are done via
CoD, which means cost of logistics and returns are through the roof. After all, the
average consumer is still cash-strapped. Finance companies and banks which offer
gold and home loans are not going to lend money to an online buyer for buying a
piece of furniture or jewellery.

Priya Sharma from Delhi, Lizzie Chapman from London, and Ashish Anantharaman
from Mumbai together founded a startup ZestMoney, which gives instant EMIs to
online customers, thereby enabling shoppers with no credit card history to shop as
much as they want.
According to RBI there are more than 23 million credit cards issued in India. But the
actual umber of credut card holder are still less than 10 million as almost all the
eligible customer take scredit carcd from more than one bank. Thats a miniscule
number in a population of 1.3 billion. The rest of the population is the target for
ZestMoney, which is essentially a consumer finance technology platform that
enables online shoppers to create a virtual EMI in real-time at e-commerce portals.
With data gathered from sources like credit information bureaus, ZestMoney
conducts back checks before a loan is disbursed by the bank or NBFC. Since
repayment of a ZestMoney EMI does not depend on credit cards, more customers
can shop online.
Credit cards and the likes of Bajaj Finserv are obvious competition for
ZestMoney. But Banks ask for many documents which will take time, whereas in
ZestMoney case, you just need to upload documents like ID proof, bank statements
etc. which are easily accessible. Salary slips are not needed. According to Priya it
can be done in just two hours, whereas a credit card will take two weeks.
As a tech company, ZestMoney does not need a licence. We work on behalf of
some underlying NBFCs which are legally lending to the customer. They effectively
employ us to do the KYC and we rework the process with them. We design a KYC
process that will fit in a digital economy, using what the government has already
provided.
In future, ZestMoney might go offline too. We want to go where our customers go.
We want to find out what they want and then serve it rather than try now and make
a fresh customer base offline, says Lizzie.