Fintech’s regulatory environment makes compliance difficult: Instamojo
Sampad Swain, co-founder and CEO of Instamojo, a D2C (direct-to-consumer) technology platform, said that the regulatory framework might provide serious hurdles for businesses operating in the nation’s fintech and payment sectors.
In an interview with this publication, Swain said that while the industry has a plethora of potential, managing regulatory obligations often requires meticulous preparation and implementation.
The difficulties stem from the dynamic regulatory environment, necessitating an anticipatory approach to adherence. The CEO said that compliance is difficult because to the fragmented and convoluted regulatory structure, which has distinct laws covering different parts of fintech activities.
The Mastercard-backed Instamojo co-founder said that despite these obstacles, the regulatory landscape is steadily changing to facilitate the expansion of fintech and payment companies.
Instamojo’s application for a payment aggregator (PA) license was denied by the Reserve Bank of India (RBI) last year, and the company had to suspend its payment gateway activities to adhere to RBI regulations. It did not match the qualifying requirements, according to the RBI. When questioned about it, Swain said that Instamojo may reapply for a license and that, “we may decide not to pursue this avenue” if they are not granted permission after six months.
The choice is still being finalized. But, he said, “our main focus is still on using our experience to get more merchants on our platform and increase their capabilities.”
Following the reintroduction of its application, Instamojo has been concentrating on the company to resume profitability. The company’s operations was EBITDA profitable the previous year. Nonetheless, the company did suffer as a result of the regulatory problems. Therefore, our present goal is to return to our pre-licensing level of performance,” he said.
MSMEs are the company’s primary focus and target market. “Someone in practically every family today is attempting to launch a direct-to-consumer (D2C) business and sell online on several platforms, including Facebook, Instagram, and even WhatsApp. By launching their own online shop, we assist them in creating a unique brand rather than just becoming another participant in the congested markets,” he said.
The business is in the process of introducing a few goods that it has in the works. We’ll keep working to provide a solid foundation for our customers, and we want to become the exclusive choice for everyone looking to launch an internet company. We believe we have just scratched the surface of what is possible in this area, and there is still more work to be done,” he said.
