The Evolution of Fintech in India

Fintech is the new marriage between the banking sector and technology.

The adoption of Fintech has been extensively taken up by two countries, China (62%) and India (52%) that are leading from the front.

Financial Technology (popular as Fintech) evolved ever since the banks went online. The need for a cashless society opened doors for applications and platforms that helped create better management of finances. The future of fintech and how the fintech industry would succeed in the future can only be determined if we dig into the history and figure out the driving changes.

History of fintech

The term fintech gained popularity in the 21st century but it goes way back. Technology has helped improve financial services in fintech. Let’s take a look at its evolution in three different time periods.

Fintech 1.0 (1866-1967)

Financial globalization took place with the help of telegraphs, railroads, and steamships. For the first time in history due to the evolution of fintech, financial information could be transmitted across borders. The new developments that took place in this era were: 1866: The first transatlantic cable

1918: The first Fedwire

1950: Diner’s club and credit cards

Fintech 2.0 (1967-2008)

This period changed from analog to digitalization of finances. From online banking to e-commerce business models there was a major shift in the customer’s and financial institutions’ relationships. This era ended due to global crisis in 2008. The evolutions that took place in this period are:

1967: First ATM and physical calculator

1968: BACS (previously known as Bankers’ Automated Clearing System)

1973: SWIFT

1983: Mobile phones and online banking

1999: Internet

2007: iPhone launched

Fintech (2008-present)

With the global crisis, the traditional banking system went down leaving people with distrust feelings towards the system. In this period along with the large finance companies, new players emerged that took the financial systems to a whole new level. The evolutions that took place in this period that made our financial transactions seamless and gained trust are as follows:

2009: Bitcoin

2010: Smartphones changed the preference of using different financial services.

2011: TransferWise (P2P transfer) and Google Wallet

2014: Apple pay

Fintech Today

History shows how the management of finances has evolved with time making it easier for customers. The hassle of waiting days for a transaction to happen has been overpowered with minutes to make a transaction. The new money payments like bitcoin and cryptocurrency have taken a toll that is beating the traditional banking systems with a new approach. The new era which we can call the 3.5 is spreading geographically covering both developed (USA, Europe) and developing countries like China and India. The developing countries have adapted quickly to the new solutions due to the constraints of physical banking infrastructure.

There is another debate that revolves around fintech taking over the traditional banking system. To some extent there might be some truth with new innovations that have started replacing the old traditional finances. Let’s take for example how Telsa, the giant of electronic cars not only revolutionized the automobile industry but also the financial infrastructure by accepting Bitcoin to buy cars in the past.

Future of fintech in India

The introduction of online banking, ATMs, credit cards, EMI options, the internet, and many more have brought about a change in the revolution of substantial change. In India, the fintech industry has seen a significant change in financial management in need to overcome the physical banking system. The investments in the fintech sector have been recorded at around $8 billion in the country. The average adoption rate of fintech is around 64% and India’s adoption rate is at 87% making it the third-largest fintech ecosystem in the world. In the span of the last 5 years, there has been the establishment of around 1400+ companies in India.

The urban areas in India are adapting rapidly to digital ways and this has led the fintech sector to evolve. With the growth and adaptability toward new technology, the fintech firms are growing making India at the top of the fintech industry.

Through some static data and the example of a leading Indian fintech company (Paytm), it can be figured out by studies how India is the future of Fintech:

· From US$ 66 billion in 2019, the value of Fintech transactions is anticipated to rise to US$ 138 billion in 2023.

· According to reports, India has above 17 Fintech businesses that have achieved the Unicorn Status (where a start-up company has a value of over $1billion).


Who hasn’t heard about Paytm, a pioneer of the fintech industry in India? The company has gained name and fame throughout the country. Paytm is a multinational financial company that provides digital payment systems, and financial and e-commerce services. The total revenue the company earns as reported in 2021 is 3,187.6 crores INR (US$420 million, 2021). It is the most popular platform in India that is used for all sorts of money transfers, online payments, bookings, loans, credit cards and so much more. Founded in 2010, it has risen from a $2 billion company to a profitable revenue-generating company.


The fintech sector is booming rapidly and India is leading from the forefront with hundreds of start-ups being established every year. India with its quickly evolving fintech companies and user adaptability is going to be the fintech hotspot. Things are just beginning and there are so many new inventions and changes coming that will make India a leading economy in the Fintech sector.