FinTech Products and Innovation
Hands down, FinTech has really emerged these days. Deep-diving into FinTech Products and innovation around UPI, we were joined by Shubham Bisht, Senior Product Manager at RazorPay managing UPI payments for an AMA session on our Slack channel. In case you missed it we regularly host product managers and talk about everything #product
Shubham being at the forefront of the FinTech movement in India at RazorPay delved into some interesting insights, let's get into them!
If you are to hire someone with a non-FinTech background as an APM, what are the:
Skills you see in potential candidates?
Groundworks that the candidate could show you to prove he can be good fit?
Nothing much changes if the candidate is from a non-fin-tech background. In fact, most of the PMs at RazorPay (including me) are from a non-fin-tech background. Whenever you move to a FinTech product company, you might need to spend 3-6 months to understand how payments work. The basics of Product Management remains the same. However, there are few key things to keep in mind if you are taking care of a fin-tech product:
- Precise documentation: People/businesses do care about their money. Thus, all the edge cases need to be thought through and whatever we build should be of the topmost quality. It is okay to be slow (sometimes) rather than launching a sub-optimal product.
- Ability to deal with multiple stakeholders: In case of FinTech product, the PM might have to deal with multiple external entities to get things done - NPCI, UPI apps, Banks, etc.
- Other non-negotiable skills: Structured thinking approach, high level of ownership, and basic business acumen.
What is the amount of programming effort needed to complete a particular project?
- I am sure you will get more understanding once you will spend some more time working with your tech team. Cross question your EM, ask them the right (sometimes tough) question, but at the end of the day, always trust them with the estimates.
- Programming knowledge: It will always help but should not be a blocker for the PM.
What % of time do you spend on resolving bugs and speaking to the technology team?
Fortunately, because of spending a good amount of time in Product Conceptualisation, thorough testing, and proper documentation, I don't have to spend the majority of my day to day time in resolving bugs. But I can still expect the support team reaching out to me 2-3 times a week.
What are your tips for someone entering into Product from non tech background?
- Work with an early stage start-up for few yrs if you want to learn Product Management at a very fast pace and in parallel, read good books and content around Product Management and try to implement them in your day to day work life.
How can the payments system disrupt remittances from abroad? Is Razor pay doing in that domain or any other player from India in that space?
As of now, we are not working actively in this domain but have heard NPCI planning to build international remittance on UPI <but this can take some time.
What is the next big thing in FinTech in coming years?
As of now, UPI is the biggest thing in Indian fin-tech space and you will see a lot of new use cases coming up in the next few months.
- New UPI apps in the market to take care of different use cases
- Govt is planning to give GST rebate to merchants and customers based on UPI transactions. It will soon be mandatory for businesses to collect customer's GST/PAN number while initiating UPI transactions.
- UPI in new geographies/countries
- Credit in UPI: Alternative to Credit Card
- Recurring payment in UPI: This product is scaling up now and in the next few weeks/months, you will be able to do recurring payments using your UPI ID. For example: Recurring payment to Netflix, Hotstar, Uber, etc.
What would it take for crypto-currencies to become more mainstream in India?
Not an expert in this domain, but will still try to answer this.
- Acceptance: More and more businesses/institutional entities need to start accepting it. For example: JP Morgan accepting bitcoin is a good early sign.
- Uncertainty around govt regulations: In India (for example), even though the govt has kind of allowed bitcoin trade, there is still a lot of uncertainty. Investors are thus very cautious.
I am curious that with major players in the UPI market - GPay, PhonePe, BHIM UPI, AmazonPe - is there any scope for differentiation in the customer value being created?
With the 30% NPCI Capping on UPI PSPs (apps), 0 MDR on UPI payment, and with the entry of Whatsapp in this club, the PSP market has changed a lot. Scope of differentiation:
- UPI apps have already evolved a lot or are still evolving: Gpay or Phonepe is not just a UPI app now. With the Gpay SPOT and Phonepe Switch product, you can use these app for multiple use cases. These apps will start allowing you to purchase flight tickets or Insurance, or invest in stock market, etc. So customers will not open Gpay just to make UPI payment but they will open it purchase products and UPI is just a payment method.
- Better success rate and better offers can be a true differentiator.
What are some of the challenges faced in the UPI payments industry and how does the future look like?
- Success Rate and uptime: While the adoption of UPI is growing significantly MoM, there has been a corresponding rise in transaction failures on account of the high volumes of transactions flowing through the banking system.
- 0 MDR: With the 0 MDR, most of the banks/entities have stopped investing to maintain the required infrastructure. RBI needs to incentivise banks and other entities so that there is an economic model for everyone.
- Future of UPI is very bright. Currently, UPI has 50-60% market share in online payments and this will soon hit 75% market share.
- There are many new use cases that UPI will solve in the next few months - Taxation (GST/PAN number in each and every UPI payment), Credit on UPI, Recurring payment on UPI, Remittances on UPI, etc.
What are the things you've learned in your PM journey that you wish you knew when you started?
Extra focus on planning, strategy, and documentation. What are some of the books/podcasts/blogs (online resources) you would recommend?
- The design of everyday things
- Algorithms to Live By: The Computer Science of Human Decisions
- FinTech: https://medium.com/authncapture
What advice do you have for someone new to Product Management like Associate PMs?
- Don't shy away from asking questions. Ask all the questions before trying to jump into the solution-ing.
- Always maintain the highest level of ownership
Wanted to know your thoughts on new-age neobanks vs existing banking players entering the millennial market by one means or the other.
- I personally feel that the market is huge enough for both these entities to co-exist. Existing banks have started to either invest in neo-banks or are partnering with them and helping them out.
- Neo-banks are trying to solve problems that were not prioritised by existing banks for too long. Primarily because there is already so much in their plate.
UPI has boosted digital payments in India by margin, but there are still gaps. What are the important changes within UPI ecosystem if implemented would be a game changer from UX point of view?
- Investment in tech infrastructure: Success Rate of UPI payments will improve if the banks will be made accountable. RBI recently asked HDFC to stop issuing new Credit Card because of their downtimes. Won't mind NPCI/RBI taking more such steps.
- Faster roll out of features: Usually, it takes 12-16 months for new feature to be rolled out in UPI. For example: UPI AutoPay was launched in July but most of the banks are not yet live with this feature.
What are the resources/reports you follow keep up with payments ecosystem every month/quarter etc?
- With Razorpay, being in the forefront of FinTech in India, I usually get most of the content served internally. Apart from the circulars of RBI and NPCI , I often read the quarterly fintech reports of Matrix, Medici, etc.
- If you want to learn the basics of FinTech : Follow the medium blog - https://medium.com/authncapture
- To know whats happening outside of India: I follow PMs/CXOs of most of the FinTech companies abroad. Stripe is one such company and you can go through their product blogs.
I am curious how does a FinTech PM plan to tackle the security concerns that some users may have (especially in rural india) regarding UPI, which if unaddressed may lead to a potential plateau in user acquisition.
As a PM, we need to look at the data, figure out the pattern, listen to customer queries, and learn from our peers and competitors. While NPCI and banks are trying to figure out these loopholes and plug them, other entities (Razorpay, other aggregators, or UPI apps) also need to take this very seriously.Most of the UPI apps have now come up with their risk engine that helps in flagging fraudulent transactions. I will just give you a sneak peek of what we have done at Razorpay to tackle these scenarios:
- Stricter on-boarding of businesses: Thorough KYC documentation and checks are in place to make sure we are not on-boarding fraud merchants to accept payments.
- Delayed settlement to businesses in case of grey categories: We make sure we are not instantaneously settling the money to suspected businesses so that if there is a chargeback, we can refund the money back to the customer.
- Suspected BINs (or Credit/Debit Cards) are blocked from being used at our platform.
- UPI Collect payment (most of the fraud is done via Collect request) is blocked on multiple merchant categories. Just to make sure fraud is prevented.
- Working closely with all payment entities: We work very closely with Gpay, Phonepe, NPCI, etc and share our learnings on a weekly basis to make sure the entire eco-system takes this very seriously.
How can RazorPay be a global product like Stripe? Does building in America have a natural advantage of capturing the world market given that both RazorPay and Stripe are similar products just made at different places.
- There is still so much to solve in the Indian market and Razorpay is first trying to solve that before doing the same for other geographies. No doubt, Stripe has done a great job with FinTech and we definitely learn from them as we do from any of our competitors.
- However, there are plans to open up our services for the international market. Let's hope we see that soon!
- Building in America has added advantage: Will agree with you as for a long period of time most of the financial services were with the big banks or Govt only. But this is changing at a very fast pace. Govt and banks have started trusting start-ups and technology. In fact, with dedicated organisations such as NPCI and start-up mindset, we are moving ahead of the curve in some areas. UPI, Rupay, Fastag, IMPS, 24*7 NEFT, etc are a few examples.
What is the future of RazorPay looks like is it planning to go beyond the payment gateway?
How do you see Neobanking evolve from where it is today?
No body wants to visit the retail banking outlet/branch right?
- This is what neo banks are going to do. They will simply remove the need to visit a bank. All things banking will be through APIs.
- Currently, the penetration of neo banks in India is very less. It will soon pick up.
- The traditional banks will either partner with these FinTechs (neo-banks) or will launch their own neo banking platforms.
- While Razorpay is just trying to solve this for SMEs/Businesses, there are multiple other players who are doing it for the end customers.
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