Transforming the Indian retail landscape: The Journey From Retailer to Fintailer
If in 2010, I had told you that your kirana shop would be a one-stop solution for all daily needs, bill payments, insurance, and a centre for cash deposit and withdrawal – you would have laughed off the idea.
But today, paying via UPI, digital wallets, or a direct money transfer at your next-door shop seem very normal.
So, how did your kirana store owner transform from a simple retailer to a fintailer? What are the factors that facilitated his journey?
Let us take a look.
The pandemic and digital transformation
As per reports, kirana stores account for over 50% of grocery purchases and are responsible for 90% of the $600 billion grocery business.
During Covid-19, customers shopped more at their local stores due to restrictions, compelling small shopkeepers to adopt technology to expand their businesses. These stores also served as a lifeline for several individuals in rural and urban India, enabling them to conduct financial transactions even during lockdowns.
In many cases, neighbourhood stores provided credit facilities to their regular customers who were facing financial difficulties during the lockdown. It helped people purchase essentials even if they did not have the cash.
The rise of e-commerce
E-commerce has brought new opportunities for retailers. As per reports, India is the 8th largest market for e-commerce with a projected revenue of US$71,292 million by 2023.
Many retailers have launched online stores or partnered with e-commerce platforms to sell their products. It has allowed them to reach customers globally and provide an additional sales channel. E-commerce has also helped retailers in cost reduction by eliminating the need for a physical storefront and expenses like rent, utilities, and staffing. This has allowed them to offer their products at lower prices and still make a profit.
The banker to the unbanked
As per the World Bank report, around 190 million adults in India don’t have a bank account, and only 48% of women have access to formal financial services in India. However, fintech has brought new hope for financial inclusion with Indian retailers at the forefront of this movement.
Retailers are offering a range of banking services, including payments through digital wallets, remittances, microloans, and savings accounts by partnering with fintech companies and banks, making it available for customers who may not have access to traditional banking services.
In rural areas, where the nearest ATM is often located far away, people turn to local shops to withdraw cash through AePS and mATM. Moreover, it’s through these ‘fintailers’, people receive direct transfers of government funds and schemes without leaving their communities or struggling with complicated digital systems.
The remittance services offered by retailers in small towns allow customers to send and receive money across borders conveniently as compared to traditional methods.
Retailers are also partnering with fintech companies and small lending institutions to provide micro-loans and help individuals build credit and save money. This has benefited small businesses and startups who may not have the necessary collateral or credit history to qualify for a loan from a traditional bank.
Moreover, offering banking services, bill payments, recharges, loans, and insurance has generated an extra source of income for fintailers and made them ‘atmanirbhar’.
You too can become atmanirbhar by becoming a fintailer and growing your business.
The facilitation of digital payments
As per NPCI, India recorded a massive increase in digital transactions from 2,071 crore in FY 2017-18 to 8,840 crore in FY 2021-22. The use of UPI, mobile wallets, and prepaid cards by fintailers has made it easier for individuals to make and receive digital payments specifically in rural areas where access to banking services is limited.
The road ahead
India’s digital payment infrastructure has ample room for improvement, considering the country’s large underbanked, and underserved population. With fintech technology, there is significant potential for innovation and expansion of financial services.
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