B2C deals gain traction in banking as digitisation cuts down middlemen

As digitisation cuts down middlemen, banks are seeing an increased demand for Business to Customer (B2C) solutions. Recent bank-fintech partnerships were focused mostly on B2C solutions, say experts.

“Traditional corporates who had focused on B2B (Business to Business) like supply chain payment solutions through banks, are now engaging with us for developing B2C solutions for their end consumers and employees viz. loyalty cards/wallets that can be used in the open market,” said Ritesh Raj Saxena, the business head in retail banking, digital & payments domain, IndusInd Bank.

The bank has partnered with Fintech companies for various B2C solutions ranging from wallets, payment gateways, digital lending, micro ATMs and so on.

Axis Bank has also seen rising demands for B2C solutions from clients in financial services, consumer goods, transportation and new economy businesses. The bank is working on multiple solutions on IMPS, ABPS and payment gateways with several B2C clients.

Financial institutions, such as insurance companies, non-banking finance companies as well as small merchants, are following the footsteps of ecommerce companies eager to convert ‘Cash on Delivery’ business to digital, said industry players.

Citibank’s recent fintech partnerships are mostly centered around maximising efficiency in the process of receiving and sending payments for businesses. “Technology has removed a lot of middlemen and led to an increase in B2C instead of B2B transactions,” said Morgan McKenney, head of core cash management, Citi Asia, at a press meet.

B2C solutions, especially mobile-based solutions, help businesses looking to target new customers and expand customer base.

“While B2B solutions Fintech are being used extensively by banks as part of their digital solutions, B2C Fintech are engaging with banks as a lead originator or front end for penetrating into new customer base, specially digital natives and new adopters of formal  banking ecosystem,” said Sachin Seth, partner and Fintech leader, Advisory Services, EY.

Digitisation has helped provide a platform for seamless integration of the entire ecosystem, leading to prevalence of ‘B2B2C’ solutions, bankers said.

"Banks and other payment services providers offer these solutions to partnering businesses that help them to enable online, real-time fulfilment of everyday purchase and payment requirements," bankers said.

While online marketplaces and aggregators are prominent use cases of B2C solutions, Indusind Bank said that demand for G2C (government to customer) solutions is also picking up.

“We see G2C disintermediation as the new ‘here to stay’ way for government schemes that entail disbursements of subsidies, etc, to end citizens directly into their bank accounts, enabled of course by Banks solutionising each of these use cases across states,” said IndusInd's Saxena.