India’s competition watchdog on Friday ordered an investigation into Alphabet’s Google following allegations from news publishers, saying its initial view was that the tech giant had broken some antitrust laws.
Google did not immediately respond to a request for comment.
The complainant, Digital News Publishers Association, which comprises the digital arms of some of India’s biggest media companies, said Google denied fair advertising revenue to its members.
“In a well-functioning democracy, the critical role played by news media cannot be undermined,” the CCI order said. “It appears that Google is using its dominant position in the relevant markets to enter/protect its position in the market for news aggregation service.”
News organisations, which have been losing advertising revenue to online aggregators such as Google, have complained for years about tech companies using stories in search results or other features without payment.
The CCI order also mentioned new rules in Australia and France — fuelled by media lobbying and public pressure — that have led to licensing deals around the world collectively worth billions of dollars.
© Thomson Reuters 2021
Competitors or Collaborators: The Way Ahead for FinTech's and Traditional Banks
Finance seeps into the very fabric of our daily lives — for individuals and businesses alike, so it only seems fitting that banking and financial services keep up with the times and imbibe technology into most, if not all processes. There is also the fact that India is the third largest FinTech ecosystem in the world. Following suit only after the US and China, the Indian FinTech market–valued at $31 billion (roughly Rs. 2,40,600 crore) in 2021– is poised for a quantum leap. In the next five years, FinTech is expected to grow at a Compound Annual Growth Rate (CAGR) of 22 percent. Funding for FinTech companies in India through IPOs, M&As, and private funding rounds increased by 3x in 2021. The numbers tell a great story, but it seems that we’re only getting started.
Within the FinTech space, some of the emerging players in the sector are digital payments, neobanks, digital lending, WealthTech, and InsurTech. In the digital payment space, India has grown to become one of the most mature markets globally. Even after COVID, digital payments have continued their massive growth. India’s Buy Now Pay Later or BNPL market is also witnessing a spurt with 9x funding growth and massive adoption growth in 2021.
In the last few years, Unified Payments Interface (UPI) has emerged as the largest retail payment system in India. Dec 2021 saw nearly 4x growth in UPI per two million transactions compared to April 2020. According to the Economic Survey, India witnessed 4.6 billion transactions worth Rs 8.26 lakh crore through UPI in December 2021 alone.
Considering the promising numbers and the direction in which the market seems to be headed, it’s only natural to wonder what the figures bode for the Indian marketplace. How will it change the economy, the way money is spent, and how banks operate? To fully understand the national reshaping across this sector, we need to analyse why FinTech presents such an attractive proposition to the Indian economy.
Understanding the rise of FinTech
FinTech, the more enhanced and digitised delivery of financial services, encompasses a wide range of sectors and businesses, including education, retail banking, nonprofit fundraising, investment management, and more.
As India stands at the brink of a FinTech revolution, exploring some of the initiatives that have expedited this growth may be worthwhile. Over 435 million people have enrolled in the Jan Dhan Yojna, the world’s largest financial inclusion program; financial literacy has improved across all sections of the population; e-RuPI, a user-friendly digital payment instrument has enabled cashless and contactless payments; and IndiaStack, an API platform, has enabled governments, businesses, and startups to become paperless, cashless, and presence-less.
Before digitisation, India was highly underpenetrated in terms of banking services, with traditional banks focusing on a specific group of customers – financially well-off individuals and large corporates. Attracted by the immense scope presented by the Indian market, several FinTech players have entered the digital lending space and this trend is expected to solve issues for chronically underpenetrated segments.
The rise in digital payments has created fertile opportunities for credit democratisation and the trend is likely to continue, with the digitisation of corporates, merchants, and retail consumers creating a vibrant digital payments ecosystem.
With large captive customer bases, payment apps are expanding to other high-margin and large addressable markets. Since 2015, there has been increased investment into InsurTechs and WealthTechs, with payments and alternative finance segments constituting more than 90 percent of the sector’s investment flow. By 2019, 75 percent of consumers were using online money transfers, payment services, or both. In 2020, India had 25.5 billion transactions, ahead of the US, UK, and China combined. In September 2021, India had more than 5.7 billion digital payments worth nearly $2 trillion (roughly Rs. 1,55,17,500) (Total Digital Payments).
Neobanks, digital-only entities partnered with traditional banks, are poised to transform the retail banking experience through better technology. Based on learnings from the growth trajectory of neobanks globally, it is expected that Indian neobanks will have more than 100 million consumers by 2025. Marquee investors too have resonated their belief in neobanks to drive the next wave of India’s banking space. 2021 saw an investment of nearly USD 900 million.
As FinTech brings innovation across various applications, including payments, loans, and insurance among others, they are increasingly becoming a well-loved part of banking and financial services.
Major growth drivers for FinTech
The ever-evolving payments industry has continued to attract underserved and last-mile customers with alternative forms of digital payments infiltrating areas where branch banks and ATMs are not feasible.
With the high adoption of smartphones, digital payment channels provide an easy, convenient, and rewarding payment experience to customers.
MSME digitisation trends
Recent structural changes have altered how Micro, Small & Medium Enterprises (MSMEs) conduct their day-to-day operations. By leveraging digital payment options, MSMEs have been able to optimise both their front and back-end operations.
During the lockdown, the number of digital transactions in the market increased by 40 percent. As a result of their fear of public gatherings, people began to switch from traditional financial ways to cashless and digital payment methods. The InsurTech industry also grew dramatically as people became more interested in life and health insurance.
Government initiatives such as ‘Make in India‘ and ‘Digital India‘ played a significant role in accelerating FinTech adoption. Demonetisation and GST also contributed to the nation’s FinTech revolution, paving the way for a shift from a paper-based economy to a digital one. Digital financial
inclusion programs such as PMJDY, DAY-NRLM, Direct Benefit Transfer, and Atal Pension Yojana have also propelled the digital transformation journey, benefiting more people, especially in rural areas. The Reserve Bank of India (RBI) has also encouraged the growing use of electronic payments in recent years to create a truly cashless society.
How can FinTechs and traditional banks work together?
Traditional banks have more sophisticated security features and processes, established networks, and decades of customer loyalty, making it imperative for FinTechs to coexist with banks. The best way forward is for FinTechs and banks to collaborate and leverage each other’s strengths as below:
- Innovation: Customer experience across the banking ecosystem is likely to improve through FinTech-led innovation.
- Revitalising growth: Traditional banks witness a boost in adoption, especially by the Gen-Z/ millennial segments.
- Trust: Easier for FinTechs to overcome consumer adoption barriers by leveraging the trust built by traditional alternatives.
The writing on the wall has never been clearer. The way forward would be for both banks and FinTechs to work together and enter the next digital wave as collaborators rather than competitors.
The author is a partner at Redseer Strategy Consultants.
Disclaimer: The opinions expressed within this article are the personal opinions of the author. Gadgets 360 is not responsible for the accuracy, completeness, suitability, or validity of any information on this article. All information is provided on an as-is basis. The information, facts or opinions appearing in the article do not reflect the views of Gadgets 360 and Gadgets 360 does not assume any responsibility or liability for the same.
Ransomware GoodWill Detected in India, Makes Victims Donate to Fake Causes: Cloudsek
A new ransomware has been detected in India that makes victims donate new clothes to homeless, feed kids in branded pizza outlets and provide financial help to anyone who needs urgent medical attention but cannot afford it, according to digital risk monitoring firm Cloudsek. The company warned that the Goodwill ransomware could also result in temporary, and possibly permanent, loss of company data and a possible shutdown of the company’s operations and accompanied revenue loss.
“GoodWill ransomware was identified by CloudSEK researchers in March 2022. As the threat group’s name suggests, the operators are allegedly interested in promoting social justice rather than conventional financial reasons,” Clousek said in a report.
Once infected, the GoodWill ransomware worm encrypts documents, photos, videos, database, and other important files and renders them inaccessible without the decryption key.
“The actors suggest that victims perform three socially driven activities in exchange for the decryption key- donate new clothes to the homeless, record the action, and post it on social media, take five less fortunate children to Dominos Pizza Hut or KFC for a treat, take pictures and videos, and post them on social media and provide financial assistance to anyone who needs urgent medical attention but cannot afford it, at a nearby hospital, record audio, and share it with the operators,” the report said.
Once all three activities are completed, the ransomware asks victims to write a note on social media (Facebook or Instagram) on “how you transformed yourself into a kind human being by becoming a victim of a ransomware called GoodWill.” Upon completing all three activities, the ransomware operators verify the media files shared by the victim and their posts on social media.
The actor will then share the complete decryption kit which includes the main decryption tool, password file and a video tutorial on how to recover all important files, the report said.
“Our researchers were able to trace the email address, provided by the ransomware group, back to an India-based IT security solutions & services company, that provides end-to-end managed security services,” the report said.
Google to Allow Tinder Owner Match to Offer Alternate Payment Systems to Users on Play Store
Match Group said on Friday that Alphabet’s Google will allow the dating apps maker to offer users a choice in payment systems, eliminating Google’s control over user data.
The company said it has withdrawn its request for a temporary restraining order against Google after some concessions, including eliminating its complete control over user data.
Match’s lawsuit came against the backdrop of ongoing cases brought by Fortnite maker Epic Games, dozens of US state attorneys general and others in targeting Google’s allegedly anticompetitive conduct related to the Play store.
The development comes almost 10 days after Google rejected an app store monopoly suit filed by Tinder parent Match Group, saying it is a “self-interested” campaign putting money ahead of user safety.
Google’s response came a day after Match filed a lawsuit in federal court in San Francisco accusing the tech titan of abusing control of the Play Store that sells digital content for Android-powered phones.
“This is just a continuation of Match Group’s self-interested campaign to avoid paying for the significant value they receive from the mobile platforms they’ve built their business on,” a Google spokesperson told AFP.
The litigation comes as part of an ongoing battle by Match, Epic Games and others to force Google parent Alphabet and iPhone maker Apple to loosen their grips on their respective app stores.
Match’s filing came after Google modified Play Store rules to require its family of apps to use the Internet giant’s payment system, which collects fees of up to 30 percent on transactions, court paperwork said.
Google has made it clear that it will remove Match apps from the Play Store if they do not comply with the rule, Match said in the filing, which described such punishment as a “death knell.”
“This is a case about the strategic manipulation of markets, broken promises, and abuse of power,” Match said in the suit.
Google countered that Match is free to make its apps available elsewhere online, including on its own website.
While the App Store is the only gateway for content to get onto Apple mobile devices, users of Android-powered smartphones or tablets can download apps at their own risk from online venues other than Google’s Play Store.
Match’s lawsuit contends that despite having options, users get content for Android devices from the Play Store more than 90 percent of the time.
Match apps offered in the Play Store qualify to pay fees of just 15 percent on subscriptions, according to the Google spokesperson.
© Thomson Reuters 2022
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