Pre-Budget Quote by business payments industry icon

FinTech has boomed in 2019, with India witnessing the highest adoption rate globally. As one of the fastest growing FinTech markets in the world, we have a lot of expectation from this year’s Union Budget, owing to several measures issued by the government to create a sound and profitable environment for start-ups while enabling Digital India.

The government has paved the way for video KYC and digital KYC with the amendment of Prevention of Money Laundering Act (PMLA, 2002) and the issuance of RBI norms, clearing the path for a paperless and remote form of KYC compliance. Given the advantages of digital KYC for conducting hassle-free digital on-boarding, these benefits need to be extended to businesses as well, since the current norms apply only to individuals.

With the announcement of zero MDR on UPI and Rupay cards, the government’s vision is to foster digital transactions in the country. We are hoping that the government will relax its stand on zero MDR given that banks and other service provider could be discouraged from providing merchants in rural areas with payment infrastructure and digital payment options, since the complete withdrawal of these charges would make it difficult for them to absorb the costs.

We are optimistic that the government will take innovative routes to build a cashless economy, such as establishing data centres to facilitate smooth and hassle-free digital transactions even in remote, rural locations. The need for common legal framework to deal with consumer issues for the entire financial sector has become inevitable.

While there have been several moves made to simplify taxes, compliance and regulations, we are looking forward to a policy framework that enhances the ease of conducting business for startups in India. To address the current economic climate, we anticipate a further slash on the corporate tax slab, of 22 per cent, for startups, to encourage new and existing ventures, as well as the continuation of the benefits of the waiver on Angel Tax for DPIIT registered startups. With the e-commerce sector spurring growth in the digital payments space and Fintech companies fuelling India’s ‘USD 5 Trillion Economy’, we hope that favourable tax benefits would be granted to startups in the fintech space.