Economy

Fintechs to Accelerate Revenue Plans With Growing Costs

Digital payments companies may be compelled to accelerate their revenue streams since expectations related to RBI and government compliance might increase operating and compliance-related expenses.

Recently, RBI announced new rules concerning digital payment security. Banks and fintech companies will need to adhere to RBI’s list of compliance requirements in the following six months. For adhering to the changes in the compliance needs, Fintechs might witness an increase in operating costs almost two-fold, even threefold, in a few cases.

In the past, domestic and international payments firms incurred high costs to comply with know-your-customer (KYC) guidelines and data localisation norms, which resulted in a new payment instrument called the Unified Payments Interface (UPI).

Industry experts believe that there will be innovation around the cybersecurity sector with the increase in compliance costs. There will be more avenues for tech-oriented intervention to prevent frauds and bring down costs. Payments have not generated revenue; nevertheless, piling up of compliance-related costs have been pressing companies to cross-sell vigorously and capitalise on current customers. Revenue timelines need to be trimmed, and international firms will aim at making profits for the long-term investments they have made.

As RBI has been rigid regarding security norms, banks partnering with FinTechs will now come under the central bank’s purview.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

Share

Recent Posts

Mutual Funds: SIP Inflows Breach Rs 19,000-Crore Mark for the First Time in February ’24

The systematic investment plan (SIP) contribution in February 2024 has crossed a new milestone. The monthly contribution tipped at Rs…

9 months ago

Income-Tax Return: A Brief Note on Annual Information Statement (AIS)

The Income-Tax (I-T) Department has directed taxpayers to access the Annual Information Statement (AIS) via the e-filing official portal and…

9 months ago

Mutual Funds: All About SIP and Market Fluctuations

Considering the vagaries of the stock market, investors often ponder over reevaluating their strategies. Whether to continue to remain invested…

9 months ago

Income-Tax Saving Through Strategic Life Insurance Planning

Financial planning is beyond just investing wisely to save on taxes; it's also related to protecting oneself and one's loved…

9 months ago

Income-Tax Return: Here’s a Note on Tax-Saving Avenues

A salaried individual earning up to Rs 5-15 lakh as net salary on an annual basis must first take stock…

9 months ago

A Quick Take on Equity-Linked Savings Scheme

Equity-linked savings schemes (ELSS), also referred to as tax-saving schemes, are equity funds that invest a significant portion of their…

9 months ago