50% of New Fintech Registrations are happening in Tier-2 & -3 Cities: Arun Tikoo, CBO, Cashfree Payments

The payments landscape has undergone a remarkable transformation in recent years, driven by the relentless evolution of technology and the rise of fintech. Arun Tikoo, Chief Business Officer at Cashfree Payments, has witnessed this evolution firsthand during his nearly two-decade-long journey in the industry. In this exclusive interview, Amit Singh delves into his insights on the changing payments landscape and the key trends shaping the sector today. He shares his vision for Cashfree Payments, highlighting its innovative products and solutions that contribute to the industry. Furthermore, Arun discusses the pivotal role of APIs in the fintech world and underscores the significance of robust security measures. Finally, he provides a glimpse into Cashfree’s business achievements and offers a compelling forecast for the future of the payments industry, pointing out the potential disruptions and innovations on the horizon.

Amit Singh: How has the payments landscape evolved over the last few years, and what key trends do you think are shaping the industry today?

Arun Tikoo: I’ve been in the payment industry for almost 20 years. I’ve witnessed the industry’s transformation from traditional banking to FinTech. Recently, in August, we processed approximately 10 billion transactions via UPI, and we’re rapidly heading towards 1 billion daily transactions. This incredible growth has occurred in just a couple of years, showcasing India’s dynamic shift towards digital platforms. With our innovations in UPI banking and the introduction of new-age products, we anticipate substantial growth. UPI’s global expansion, adoption in other countries, and its use in various industries like salary and vendor payouts and collections are all game-changing developments. What we’ve seen so far is just the tip of the iceberg; the future holds even more robust growth.

Amit: Can you also tell us about Cashfree Payments’ business in India and globally? How does it add value to the overall BFSI landscape, and what sets it apart from the competition?

Arun: Cashfree Payments is about to celebrate its eighth anniversary. Our primary goal has always been to provide a one-stop solution for a range of financial needs. We aim to offer all fundamental building blocks within our platform. This includes solutions for online collections, payments, refunds, and various other aspects of the payment ecosystem. We have been pioneers in building a holistic pipeline for payouts. Our focus is to ensure that once a customer adopts Cashfree Payments, all their financial needs are met in one place, from account opening to collections, payments, and verifications. This integrated approach is what sets us apart, eliminating the need for clients to utilize multiple platforms. We even offer embedded finance solutions. We are continually exploring new possibilities, such as cross-border payments and blockchain. We’re in the process of identifying how these technologies can benefit the industry. Our current focus is on growth and identifying new challenges where we can contribute to society.

Amit: Can you also talk about the innovative solutions or technologies that Cashfree is exploring to enhance the payments experience for its customers?

Arun: Cashfree is dedicated to developing innovative products. One of our pioneering products is payouts, which allows seamless, high-volume transactions interlinked with multiple banks. We enable companies to process hundreds of transactions per second, whether it’s refunds, gig payments, or employee salaries. Our platform offers instant refunds and includes products like Cashgram, a way to send money when you don’t have a recipient’s account details. We have pre-authorizations for secure transactions and a flexible subscription model, catering to businesses like OTT platforms. Instant settlements are another feature; we provide funds to clients on the same day. Interoperability across payment gateways and card tokenization is already integrated. Our verification suite is comprehensive, covering various validations, including bank account verification, GST, and more. We are also looking into advanced verification methods, like face recognition. These products are already active and serving the industry, with scalability and robust support.

Amit: How crucial do you think APIs have become for any FinTech or organization aiming to provide seamless customer experiences?

Arun: APIs (Application Programming Interfaces) have become essential for any FinTech or organization aiming to deliver seamless customer experiences. These interfaces have driven the digital revolution, and I’ve witnessed their evolution firsthand. One of my initial experiences involved an e-commerce company struggling with processing 30,000 daily refunds. They faced delays due to traditional file-based processes. However, when we introduced APIs, it transformed the speed and efficiency of their transactions. Today, the entire digital landscape relies on API banking platforms. APIs are fundamental for services like banking as a service, enabling B2B and B2C companies to integrate embedded banking into their apps. Companies can process hundreds of transactions per second, thanks to APIs, acting as a messaging system. This allows near-instantaneous processing of transactions, benefiting businesses like rideshare platforms that must handle massive transaction volumes daily. APIs have been a driving force in the digital revolution and will continue to play a pivotal role in the future.

Amit: What kind of security measures and customization options do platforms like Cashfree offer to make transactions secure and convenient?

Arun: Security is of paramount importance to Cashfree Payments. Dealing with public and company funds demands a high level of confidence in security and compliance. We are an RBI-approved payment licensing company, and we uphold the highest security standards. To emphasize our commitment to security, we’ve obtained ISO certifications, including ISO 27017 and 27018. These certifications are the gold standard in the industry. Furthermore, we adhere to IT security techniques and a code of practice for the protection of personal and identifiable information in public cloud systems. Our certifications and compliance assure our customers that their transactions and funds are secure. Beyond security, we focus on providing excellent customer support. We maintain a substantial service team to support our customers, ensuring their payment, collection, refund, and verification needs are met seamlessly.

Amit: Can you talk about Cashfree’s recent business achievements over the last few years?

Arun: As a company, we aspire to be a leading player in India’s payment ecosystem. We aim to continue growing in the country, in close cooperation with regulators and the National Payments Corporation of India (NPCI). Recently, we launched UPI on OTT platforms, allowing online mandate creation by scanning a QR code, in collaboration with NPCI. We look forward to our expansion into international markets. We’re actively exploring partnerships in the Middle East and Southeast Asia, and plan to be present in 10 to 15 countries within the next few years. Our goal is to replicate the successful financial products we’ve developed in India on a global scale. With the global expansion of UPI, we anticipate faster growth in these markets.

Amit: What are your insights for the future of the payments industry? What innovations or disruptions do you anticipate in the coming years?

Arun: The future of the payments industry looks extremely promising. India’s digital transformation has been remarkable, with 10 billion transactions processed in a single month and a target of reaching 1 billion daily transactions via UPI. India has become a global leader in digital technologies, with around 8,000 fintech companies, making it the third-largest fintech market worldwide, following only the US and China. India is poised to surpass these giants soon. The significant presence of fintech unicorns, around 25 of which are from the fintech domain, is a testament to the industry’s rapid growth.

Cross-border payments and UPI international are the major upcoming challenges and opportunities. With the support of regulators and platforms like UPI, India’s digital journey is set to continue its incredible trajectory. The market is no longer limited to tier-one cities; tier-two and tier-three cities are rapidly adopting digital technologies. The fintech ecosystem is expanding, with 50% of new fintech registrations occurring in tier-two and tier-three cities. India is likely to become the global leader in the fintech sector, with innovations that will set new standards in the industry. The future is bright, with a plethora of opportunities for growth and development.