ET World Leaders Forum; PayU’s consumer payments push

Posted by Admin September 2, 2024 Tech

Happy Monday! Top startup and tech leaders at the Economic Times World Leaders Forum said India is poised to become the hub of tech innovation. Updates from the event and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Green shoots in IT’s BFSI sector
■ India’s electronics manufacturing plan
■ ULI explained

ET World Leaders Forum | Bullish on anything that’s internet first within India: Balaji Srinivasan

Sajith Pai, partner, Blume Ventures (Left) and tech investor Balaji Srinivasan

Startup and technology leaders and government authorities spoke at The Economic Times World Leaders Forum on Saturday about India’s place in the technology and artificial intelligence (AI) landscape and how local entrepreneurs stand to gain from the rising flow of global and domestic capital.

‘Bullish’ on India: In conversation with Blume Ventures’ Sajith Pai, tech investor and author Balaji Srinivasan said he’s bullish on anything that is internet-first within India.

“I’m extremely bullish on the Indian Network, of which we see the Indian state as a subset. What’s the Indian Network? That’s all of the technological, political, financial, and media figures that have arisen now… globally,” he said. He also highlighted the significant impact of AI on India and the role of cryptocurrency in enhancing sovereignty.

Also Read | Govt to launch new scheme for domestic electronics component manufacturing: Vaishnaw

ETtech editor Samidha Sharma and Google vice president Ambarish Kenghe

Fintech progress: Ambarish Kenghe, vice president of fintech major Google Pay, said at the event that India’s digital payments market is large and growing fast, with ample scope for new players. This comes against the backdrop of UPI players seeking clarity on the long-standing issue of a ceiling on market share.

“I don’t see a challenge with this issue of market share because I think there is a large number of players who are operating with a large number of apps, and there is scope for everyone,” Kenghe said in a conversation with ET’s Samidha Sharma.

Also Read |UPI market share cap directive a spoiler for IPO plans: PhonePe’s Sameer Nigam

Google Pay is the second-largest UPI app, according to transaction volume, only behind Walmart-backed PhonePe. The two players together command about 85% of the market share.

Also Read | UPI market share cap delay likely to keep online payments pie unchanged

(L-R) ET south editor Archana Rai, Nikhil Goel, Maria Katris and Keshav Reddy

AI dominance: Maria Katris, cofounder and CEO of tech jobs community portal Built In, said the rapid growth of AI will bring with it “significant opportunities for new jobs.”

Thomas Dohmke, CEO of Microsoft-owned developer platform GitHub, pointed out that while AI is still in its nascent stages, early adoption will be crucial for success.

At a panel discussion on ‘Catalysts of Change: Crafting the Future Through Startups,’ Keshav Reddy, founder of identity verification startup Equal, highlighted that global investors may be investing in India, but the quantum of Indian rupee capital making its way to startups is also increasing “significantly”.

PayU eyes full-stack consumer payments through its LazyPay

Digital payments company PayU is looking to expand its consumer fintech offerings through LazyPay, while maintaining its core focus on merchant payments. The Naspers-owned fintech firm plans to leverage LazyPay to develop a consumer payments and credit platform.

CEO’s take: Anirban Mukherjee, chief executive officer at PayU, said the company is growing fast. “We will build a consumer brand around LazyPay. (So PayU will) not only be B2B in the long run, thereby extending its model to build a B2B2C platform. We will serve enterprise merchants, financial institutions, and consumers,” he said.

Long-term plans: Mukherjee said PayU’s sub-brands, like LazyPay and Wibmo, which operate as independent brands, will eventually be unified under the mother brand PayU. The company is seeking regulatory guidance on allowing non-bank lenders on UPI to tap credit opportunities in the future.

Aiming to build a full-stack fintech play in the country, Mukherjee said credit and payment offerings are already in place; wealth management and insurance distribution are among its long-term plans.

Also Read | PayU receives RBI’s in-principle nod to operate as a payment aggregator

IPO in the works: The PayU management is driving towards an eventual goal of a public listing, but Mukherjee did not divulge any timeline for the same. He added that the company is on track for the planned listing, and the first step towards that—creating an independent Indian business with its governing board—is already completed.

Also Read | PayU India FY24 consolidated revenue rises 22% to $1.1 billion

HCLTech, Wipro see discretionary spends uptick in BFSI sector

Two of the top four Indian IT companies, HCLTech and Wipro, are seeing an uptick in discretionary spends in the banking, financial services, and insurance (BFSI) segment.

Driving the news:

HCLTech told analysts about the uptick in discretionary spends in BFSI; its other verticals continue to be driven by ‘cost takeout’ deals
Wipro also saw a spurt in its Capco consulting, which mainly focuses on BFSI clients and discretionary spends.

Green shoots: Experts are hoping the revival of discretionary spending will be widespread in the next two quarters, as they expect a rate cut to take place soon. Analysts told us that clients have already hired consultants to discuss next year’s budget and take a call on discretionary spending.

Bigger rivals TCS and Infosys have tightened their purse strings for discretionary spending, as stated in their first-quarter earnings statements. But green shoots from the others have still given industry watchers some hope.

Also Read | How BFSI is playing a lead role in Indian IT services comeback

Expert take: Avinash Vashistha, chairman of Tholons, is confident of an impending US Federal Reserve rate cut in September. “Clients are already proactively engaging with consultants to discuss next year’s budgets, with a particular focus on discretionary spending allocated towards AI (artificial intelligence) and digital transformation initiatives,” he said.

Also Read | IT companies expect BFSI to lead recovery in a few quarters