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.
