Know Your Fintech Partners

Over the years, the banking industry has embraced technology to meet the imperatives of a changing world. One of the more important technological advances in banking was automated teller machines (ATMs) which then moved to the age of internet banking. Today, banking has leapfrogged the technological innovation curve to successfully provide its services to customers seamlessly and efficiently. For example, as a banking customer you now simply visit your nearby shop to make payments or withdraw money via micro-ATMs in areas where bank branches are not feasible. 

However, to truly leverage the benefits of innovative technology and stay ahead of the curve, financial institutions need to be agile and proactively adapt to meet the changing needs of their customers, investors, and the regulator.

Financial technology or Fintech companies that lie at the crossroads of finance and technology are acting as catalysts for this change. These companies are adding value across the financial services spectrum by leveraging technology to better understand the unique needs of customers, create innovative products and solutions, and deliver them seamlessly and efficiently. Fintech platforms and assisted payment service providers are now quite in demand with banks, microfinance companies, aggregator websites, insurance companies, and other financial companies.

Given the proliferation of fintech companies, it has become important for merchants and retailers to understand the factors that lend them credibility and should be considered before engaging with Fintech players for payments and other related services.  

1. Financial Strength - The first and foremost factor to consider while engaging with a fintech company is its financial strength. Check online or ask the company representative about the turnover, number of customers, and other financials of the company. Ensure your money is safe with this company and it is not a fly-by-night operator.  

2. Team and Regulatory Licenses – Always check the background of the company, the management team, and the required licenses and certifications it has. You can refer to its website for checking the above-mentioned details. Ensure that the company has the required licenses (RBI etc) from a relevant regulatory body. Another good way of checking its stature is to see the number of app installs, online reviews, and customer testimonials. Customers should ensure that the people they deal with are true representatives of the company and check their ID cards to verify that they are employees of the company. 

These are just some of the many factors that you must consider before engaging with a fintech company. Considering that these engagements require the sharing of personal and banking details, you must be careful while choosing the fintech company and during your interactions with them. This will ensure that you have a secure and value accretive experience. 

The author is the MD and CEO of RapiPay Fintech Private Limited 

DISCLAIMER: Views expressed are the author's own. Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.