Indian SMEs and startups will need a digital footprint in the looming fintech revolution.

Mastercard (NYSE: MA) and India’s Razorpay announced a partnership to help onboard the country’s micro, small and medium enterprises (MSMEs) and startups on the digital highway. The pandemic has unleashed a huge demand for secure, easy, and contactless payments. The two companies want to empower merchants, consumers, acquirers, and fintech companies to expand the adoption of digital payments in India. (Mastercard)

COVID-19 and India’s payments landscape

India conducted 90% of its retail payments in cash before the pandemic struck. But the event triggered a massive pivot towards digital payments. MSMEs were confronted with twin challenges. They had to maintain the continuity of their businesses as well as to rapidly transform their payment mechanisms to digital.

“We’re going through one of the biggest transformations in Indian financial history – the Fintech Revolution. It will significantly alter the payment and banking experience of consumers and businesses now and in the years to come,” said Amitabh Tewary, Chief Innovation Officer, Razorpay. “New businesses are evolving every day with different payment and banking needs and catering to a different set of consumers and markets.”

Moreover, Tewary said the partnership with Mastercard would help equip millions of businesses, especially in India’s tier 2 and 3 cities, with digital technologies. It would create seamless onboarding solutions for the digitization of bill payments, digital content platforms, and other subscription services.

Razorpay became a unicorn in October

In October 2020, Razorpay raised $100 million in a Series D funding round. The round was led by Singapore sovereign wealth fund GIC and Sequoia. It saw participation from previous investors Ribbit Capital, Tiger Global, Y-Combinator, and Matrix Partners.

Furthermore, Razorpay co-founder Shashank Kumar confirmed the funding round had catapulted the startup to unicorn ranking.

“With COVID causing a potential paradigm shift in the way commerce happens in the country, we are seeing multiple new demographics of businesses. They are looking to move online and start leveraging the internet and mobile technology,” wrote Kumar in a blog.

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