India’s Fintech sector went through a major reset in 2025 as companies moved away from rapid expansion and focused on profitability, compliance and long-term scale. The year was defined by tighter regulation, selective funding, product diversification and a clear push toward cross border expansion. Firms closed the year with leaner structures, stronger partnerships and a sharper focus on sustainable business models.
Cross border payments emerged as a key growth engine. Razorpay secured a Payment Aggregator Cross Border licence from the Reserve Bank of India, allowing international collections in over 130 currencies and expanded operations across the UAE, Europe and Southeast Asia. PayU strengthened its global merchant acquiring business, scaling enterprise payroll and high-volume commerce flows. Nium expanded its B2B payments stack across APAC and North America with strong adoption in real time multi-currency settlement. XFlow gained traction among SME exporters by offering lower cost international receivable and payable solutions through banking partnerships.
Digital lending saw consolidation as regulatory pressure reshaped the market. Platforms such as KreditBee and MoneyTap slowed loan disbursements to focus on profitable customers. Banks expanded co lending partnerships, reshaping the digital credit ecosystem. Paytm revived its lending business through NBFC tie ups and cash flow based MSME loans. CASHe expanded salary linked and consumption focused credit lines, while Cred strengthened secured lending through home and vehicle loan marketplaces. ZestMoney shut down operations, highlighting risks linked to BNPL dependence and high acquisition costs.
UPI crossed new usage records in 2025, driven by P2M growth and recurring payments. UPI linked credit lines boosted adoption among SMEs and retail users. International expansion widened beyond Singapore and the UAE, with pilots in Sri Lanka, Mauritius and France enabling UPI QR payments for tourists. PhonePe retained market leadership while Google Pay expanded enterprise services. Regulatory tightening by the RBI impacted unsecured lending, FLDG exposure and KYC norms, forcing consolidation among payment players. Funding conditions improved selectively, with capital flowing to fintech infrastructure, insuretech, wealthtech and embedded finance. Insurtech firms like Acko and Digit expanded through partnerships, while Groww and Zerodha saw record investor participation. Embedded finance scaled across retail and B2B platforms, strengthening offline merchant ecosystems.
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