GST Impact on FinTech and E-Payments in India

GST implications for Fintechs in the e-payments ecosystem in India of late, most of us are used to hearing an oft-repeated term, 'fintech', in our daily conversations. This is perhaps because fintech has become all pervasive and ubiquitous in our lives. Briefly explained, the term 'Fintech' (short form for Financial Technology) is often used to refer to modern technology and software that seeks to automate and improve the delivery and use of financial services.

Typically, in a financial ecosystem, there are many non-banking companies, banks, payment processors, and remittance firms. But all these participants also mean that each follows a unique protocol or process which could be incompatible with the other, thus creating confusion and inefficiency for the consumer. Also, if each of these players charges a fee, the total cost for the consumer could be unaffordable. Besides, there is an overriding concern for security and prevention of fraud amongst the consumers as well as participants that has added a whole new dimension to the way financial transactions are undertaken. This is where Fintech comes into play.

Today, the use of Fintech is fairly widespread in the banking and financial services (BFS) ecosystem across the world and also in India.…