Financial technology (fintech) start-ups are leaving no stone unturned to come up with new business initiatives and products to cope with the impact of the Covid-19 pandemic. Bengaluru-based Instamojo has come up with an initiative for essential businesses, such as pharmacies, called Priority KYC, which will allow them to go online with their products in five minutes. “In times like these, when online is the only solution, several small businesses need support to go digital. Through this initiative, Instamojo is offering Priority KYC, helping these essential services go online in less than five minutes,” said Sampad Swain, chief executive officer (CEO) and co-founder, Instamojo.
Sequoia Capital-backed Razorpay has partnered with Rentlite, a division of Featherlite, with corporate offers to enable people to rent office furniture for working from home. It has also launched same day settlements for all Razorpay customers who provide essential businesses till April 15, which means businesses will receive funds in just a few hours instead of the usual 3-5 working days settlement period. “This will help businesses improve their cash flows and manage operational expenses better,” said Harshil Mathur, CEO and co-founder, Razorpay.
Several start-ups have also started offering insurance coverage against Covid-19. Digital payments and financial services platform Paytm has rolled out a Covid-19 insurance policy in collaboration with Reliance General Insurance with a cover ranging from Rs 25,000 to Rs 2 lakh. “With our Covid-19 Benefit Insurance Policy, we aim to provide simple health insurance coverage that will take care of most expenses that a Covid-19 patient might have to incur. The policy can be purchased on the Paytm app, and is generated online within a few minutes from the safe confines of one’s home,” said Amit Nayyar, president, Paytm.
Experts say the Covid-19 pandemic could fast-forward certain industries by 3-5 years, including fintech sector. “Certain behavioural patterns are going to be accelerated because of Covid-19. Cross selling relevant products, such as insurance, is one of the big opportunities for fintech start-ups. These opportunities were always in the plans, but have been fast-tracked because of the given situation,” said Sanjay Swamy, managing partner, Prime Venture Partners.
Earlier this month, Walmart-owned digital payments company PhonePe had also launched Corona Care, a coronavirus hospitalisation insurance policy, in partnership with Bajaj Allianz General Insurance. Priced at Rs 156, the plan comes with a cover of Rs 50,000 for a person aged under 55 years, and is applicable at any hospital offering Covid-19 treatment. It also covers 30 days of expenses related to pre-hospitalisation costs and post-care medical treatment.
According to the company, customers need not undertake any medical tests before purchasing the policy that can be bought on the company’s app with the purchasing process taking less than two minutes.
Leading a global business entity, one quickly understands the fundamental importance of fintech services to the developing world. FinTech’s have a unique capability to extend financial inclusion, improve the daily lives of people and spur growth. While a great deal of attention has been given to the impact of COVID-19 on traditional banking institutions, there is also a significant impact being felt in the fintech marketplace. This is best evidenced by the slowdowns in funding, drop in establishment of new fintech firms and the reduced revenues of most organizations already in business. In many ways, fintech firms are more vulnerable than their legacy banking counterparts, despite being better positioned for the digital transformation occurring in banking.