The recent report on local fin-tech players.

Syllabus: GS-III

Subject: Economy

Topic: Banking and Financial Intermediaries

Issue: Fintech companies

Context: Standing Committee on Communications and Information Technology submitted its report to the Parliament.

Fintech: Finance Meets Technology

Fintech, short for financial technology, refers to the use of technology to modernise and automate financial services.

Example: UPI based payment services in India

Highlights of the report:

  • Emphasised that digital payment apps must be effectively regulated.
  • Raised concerns about the dominance of fin-tech apps owned by foreign entities in the Indian ecosystem. (Walmart-backed PhonePe and Google Pay dominate the Indian fin-tech sector.)
  • The NPCI (National Payments Corporation of India) has already issued a 30% volume cap on transactions facilitated using UPI to prevent monopoly/duopoly.
  • The Committee observed that fin-tech companies were also being used for money laundering.

Example — an Abu Dhabi-based app called Pyppl was being administered by Chinese investment scamsters.

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