BENGALURU: Operating in the country’s fintech and payment sector can indeed be a significant challenges due to the regulatory environment, said Sampad Swain, co-founder and CEO of Instamojo, a D2C (direct-to-consumer) technology platform.
In an interaction with this newspaper, Swain said while the sector offers immense opportunities, navigating through regulatory requirements often requires careful planning and execution.
“The challenges arise from the evolving regulatory landscape, which demands a proactive approach to compliance. The complex and fragmented regulatory framework, with different regulations governing various aspects of fintech operations, creates compliance challenges,” the CEO said.
The co-founder of Instamojo, which is backed by Mastercard, also said that despite these challenges, the regulatory environment is gradually evolving to support fintech and payment company’s growth.
Last year, the Reserve Bank of India (RBI) returned Instamojo’s application for a payment aggregator (PA) licence, and it halted operations of its payment gateway business in order to comply with the central bank rules. The RBI said it did not meet the eligibility criteria. Instamojo can reapply for licence and when asked about it, Swain said six months later, they may have a reason to revisit the RBI to apply for the PAPG license anew, or “we may decide not to pursue this avenue.”
The decision is still a work in progress. However, our primary focus remains on leveraging our expertise in bringing more merchants onto our platform and expanding their capabilities, he added.
Post the return of its application, Instamojo has been focusing on the business to get back to being profitable. Last year in terms of business, the company had been EBITDA profitable. “But due to the regulatory issues the business did take a hit. Hence the current focus is to get back on our feet where we were in the pre- licence phase,” he further said.
The company’s focus and also target market is MSMEs. “Today almost every other household has somebody in the family trying to start a D2C brand and sell online on various platforms like Instagram, Facebook, and even WhatsApp. We help them build their own identity by starting their own online store and not just be one of the many players in the overcrowded marketplaces,” he said.
The company has a few products in pipeline and it will soon be launching the same. “We will continue to work towards building a robust platform for our end users and we look forward to being the only preferred partner for anybody who wants to start a business online. There is a lot to do in this space and as of now we feel we have just seen the tip of the iceberg,” he added.