India has become a global benchmark for digital payments over the last decade, driven by UPI, affordable data, and widespread smartphone adoption. But Raman Khanduja, Co-founder and CEO of Mintoak, believes QR codes are only the beginning of the story. Speaking at MSME Sparks 2026, Khanduja highlighted the potential for digital payments to transform micro, small, and medium enterprises (MSMEs) by turning transactions into visibility, credit, and long-term growth.
### From ‘Underserved’ to ‘Visible’
For decades, MSMEs struggled to access formal credit because banks relied on traditional financial documents such as salary slips, Income Tax Returns (ITRs), and Form 16. “MSMEs always needed capital and banks always wanted to lend, but they never really understood each other,” Khanduja said. The lack of conventional financial documentation often left small businesses labeled as financially underserved.
Related Posts
The advent of digital payments has begun to change this dynamic. As MSMEs adopt point-of-sale terminals and QR codes, each transaction generates a record of business activity. “Today a bank can literally see a restaurant’s lunch rush, a pharmacy’s repeat customers, or a wholesaler’s inventory cycle,” Khanduja explained. These transactions provide economic signals, enabling banks to better understand the cash flow of MSMEs. The challenge now is to leverage this data to foster business growth.
### The Competitive and Funding Landscape
The rise of digital payments in India has catalyzed a competitive environment among fintech companies and traditional banks. Players like Paytm, PhonePe, and Google Pay have become household names, contributing to the digital payment ecosystem’s rapid expansion. Meanwhile, traditional banks are also investing in digital infrastructure to keep pace with the evolving market.
The funding environment for fintech companies has been robust, with significant investments pouring into the sector. According to a report by Bain & Company, India’s fintech sector attracted over $8 billion in investment in 2022 alone. This influx of capital is driving innovation, enabling companies to develop solutions that cater to the unique needs of MSMEs.
### Implications for India’s Startup Ecosystem
The evolution of digital payments and the focus on MSMEs have significant implications for India’s startup ecosystem. As MSMEs become more visible and accessible to formal credit, startups offering financial technology solutions are in a prime position to capitalize on this opportunity. By providing innovative services tailored to the needs of small businesses, these startups can drive economic growth and job creation.
Furthermore, the increased visibility of MSMEs can encourage more entrepreneurs to enter the market, knowing that access to credit and other financial services is improving. This could lead to a more vibrant startup ecosystem, with diverse players contributing to India’s economic development.
As digital payments continue to evolve, the next step for stakeholders in the ecosystem is to focus on leveraging transaction data to provide comprehensive financial solutions for MSMEs. This includes not only access to credit but also tools for business analytics, customer engagement, and supply chain management.
For founders, investors, and engineers, the key will be to watch how digital payment platforms evolve to meet the growing needs of MSMEs. With the right innovation and strategic partnerships, these stakeholders can play a pivotal role in shaping the future of India’s digital economy.
