Note ban opens doors for fintech, but cyber attacks are a big concern

India is still reeling from the effects of the demonetisation policy that was announced on November 8, 2016. With 95 percent of all transactions still dependent on bank notes, the replacement of the demonetised notes was slow to meet demands. The tech boom helped India to grow as Asia’s third largest economy, but the cash crunch is affecting the tech sector. Many electronic services like Uber and Amazon India are cash-dependent.

Opportunities in fintech despite e-commerce hit

E-commerce was initially projected as a major well of opportunity in India as investments continued to pour in. Large e-commerce firms like Flipkart and Amazon went on spending sprees to beef up their infrastructure and market presence in India. Amazon spent heavily in the country believing that it is the next biggest market after the US.

The cash crunch is expected to put e-commerce players into a bigger bind, especially with cash-on-delivery sales expected to decrease due to cash shortage. The demonetisation backlash, however, presents a unique opportunity for cashless payment processors and may well be a saviour of Indian e-commerce.

Fintech is not immune to cyber crime
 

Unfortunately, this shift is also expected to draw the attention of cyber criminals. While the previously mentioned debit card hacking attack used skimming devices on ATM kiosks to gather and compromise card information, this does not mean that internet and mobile-app-based digital payments are safe from attacks.

Security is everyone’s responsibility
 

All businesses with a digital presence should keep security as part of their agenda. Vigilance is definitely a major factor as one does not have to look far for sources of attacks. Indian nationals had been reported to commit such crimes domestically.

Unfriendly neighbouring states may also be behind such threats.

This is an excerpt from Tech in Asia. You can read the full article here.