FINTECH ROUNDUP2025 NOVEMBERAn analysis of market dynamics, regulatory shifts, and emerging technology trends in Indian fintech.

TABLE OF CONTENT AI TAKES OVER FINTECH ("CHATGPT- FICATION")01 02 03 04 API MISUSE SCARE: REGULATION TIGHTENS BNPL EVOLVES INTO CHECKOUT CREDIT UPI GROWTH: VOLUMES EXPLODE, MARGINS DON'T IPOS THAT MOVED THE MARKET 05 06 07 08 INFRA "QUIET GIANTS": KFIN, KNIGHT FINTECH, BANKU CROSS-BORDER & GLOBAL SOUTH: INDIA BECOMES EXPORTER CREDIT, MSMES & INCLUSION: THE REAL GROWTH ENGINE 09 “FINTECH AS A THEME” BECOMES INVESTIBLE

(CHATGPT-FICATION)AI TAKES OVER FINTECH WHAT HAPPENED The Ken highlighted India's rapid "ChatGPT-fication of fintech" as banks, brokers, NBFCs, and payment apps bolt AI copilots into lending, investing, and support flows. Knight Fintech, Perfios, Cred, PhonePe & broking platforms rushed AI-risk, AI- service, and AI-collections layers. AI has moved from "UI gimmick" to an infrastructure layer controlling risk, onboarding, fraud, cross-sell, and service. Unlike US markets (consumer-facing first), India's AI adoption is backend-first, driven by compliance + scale sensitivity. STRATEGIC ANALYSIS AI underwriting + AI co-lending infra will become industry standard. Fintechs without proprietary AI data loops will lose cost advantage within 12–18 months. FUTURE PREDICTION 01

WHAT HAPPENED ET exposed large-scale abuse of bank payout APIs by shady TSPs funnelling money without OTP/dual-auth. Several digital-lending NBFCs saw RBI scrutiny spike. Moneylife highlighted erosion of citizen control in digital finance. Expect mandatory API gating, certifications, and central "fintech risk registries." Non- compliant players will lose bank partnerships, accelerating market consolidation. FUTURE PREDICTIONAPI MISUSE SCARE: REGULATION TIGHTENS STRATEGIC ANALYSIS India's fintech market is shifting from "innovation-led" to "compliance-led growth." API hygiene and partner risk-management are now primary competitive differentiators, favoring clean players like PhonePe, Razorpay, ICICI, Kotak. 02

BNPL is shifting from "micro-credit" to structured checkout financing backed by bank balance sheets. Compared to Europe's Klarna model, India's evolution is more regulated, embedded, and credit-sound. Ecommerce checkout credit will account for 35–40% of festive GMV by 2026. Standalone BNPL apps without bank/NBFC backing will not survive. STRATEGIC ANALYSIS BNPL players like Slice, Uni, ZestMoney pivoted to regulated credit, co- lending & lifestyle EMI. Flipkart's super.money surged (~₹740 crore monthly loan volume; planning 2M credit cards in 2026). BNPL EVOLVES INTO CHECKOUT CREDIT FUTURE PREDICTION 03

UPI GROWTH:VOLUMES EXPLODE, MARGINS DON'T UPI is now utility infrastructure: huge volume, low direct monetisation. Winners are ecosystem operators who use UPI as a zero- CAC funnel → high- margin credit, wealth, insurance. STRATEGIC ANALYSIS Cross-border UPI (UAE, Nepal, SEA) could become India's biggest fintech export. UPI-linked micro-credit and recurring subscriptions will explode in 2026. FUTURE PREDICTION WHAT HAPPENEDUPI TRANSACTIONS20.7BOct–Nov highs.₹27.3lakh croreStill Dominate 04

~12–14%Listed premium rallied ~94% aboveabove issue in days.$440MRaised +28.5%Listed GROWW PUBLIC DEBUT Retail investing boom gave it a "new-age HDFC Direct" valuation, pricing in aggressive monetisation across brokerage + lending + MF. PINE LABS PUBLIC DEBUT FUTURE PREDICTION Infra fintech IPOs will outperform consumer fintechs due to recurring revenue. Groww sets valuation benchmarks for Zerodha, Dhan, and Upstox. IPOS THAT MOVED THE MARKET Proves strong investor trust in merchant payments and offline rails. Higher margin & lower churn model vs US peers (Square/Toast) due to POS software services. 05

Infra businesses become prime IPO candidates in 2026–27. Expect wave of consolidation with large banks acquiring credit/lending infra startups. FUTURE PREDICTION INFRA "QUIET GIANTS": KFIN, KNIGHT FINTECH, BANKU 06WHAT HAPPENED FE profiled KFin as "the engine behind every SIP." Knight Fintech connected 80+ banks/NBFCs to co- lending infra. BankU launched 150+ APIs expanding India Stack.STRATEGIC ANALYSIS India's fintech is maturing: money is shifting from "apps" to interchange + infra + rails. Infra players showed superior profitability vs consumer fintechs.

Pine Labs, Razorpay, PhonePe & Kaleidofin aggressively pushed payment and credit infrastructure into SEA, GCC & Africa. GIFT City’s Rivexa established cross- border FX rails to streamline international trade settlements for Indian enterprises. India’s high-volume, ultra-low-cost financial architecture is competing directly with legacy players like Stripe and Wise across developing economies. Domestic saturated margins are forcing top-tier Indian fintechs to productize their stacks globally for higher fee-based yields. WHAT HAPPENED STRATEGIC ANALYSIS CROSS-BORDER & AMP; GLOBAL SOUTH: INDIA BECOMES EXPORTER 07 FUTURE PREDICTION India-led Global South payment rails will become strategic geopolitical fintech assets by 2027, unlocking massive cross- border transaction revenue.

CREDIT, MSMES & INCLUSION:THE REAL GROWTH ENGINE08 WHAT HAPPENED MSME Digitisation & Underwriting: Rapid adoption of GST-backed real-time cash flow underwriting. Consumer & Business Credit Expansion: Fibe expanded personal credit access, while Knight Fintech and Open powered scalable co-lending infrastructure. STRATEGIC ANALYSIS India's credit gap is shifting from a lack of data problem to an execution and distribution challenge. The combination of GST-based cash flow analysis and hyper-local Kirana-agent networks provides an unmatched engine for scale. FUTURE PREDICTION GST-based real-time cash flow underwriting combined with localized community distribution will completely replace collateral-based MSME lending by 2026.

FINTECH AS A THEMEBECOMES INVESTIBLE Fintech is no longer evaluated as a speculative startup bucket; it is now recognized alongside legacy IT and Pharma as an essential macroeconomic sector. Public and private markets are heavily penalizing vanity metrics, redirecting capital toward profitable, infra-heavy, compliant platforms. STRATEGIC ANALYSIS 2026–2027 will see the debut of dedicated Fintech Index Funds & ETFs in domestic markets, driven by institutional mutual fund allocations. FUTURE PREDICTION 09 WHAT HAPPENED Bajaj Finserv BFSI Fund aggressively pushed the "invest in India's digital finance story" narrative. Sustainable fintech and ESG-focused capital flows highlighted digital finance as an independent institutional asset class.

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