Foreign influence increasing over India's fintech sector: GTRI on Meta's investment in Cred

Tech giant Meta's $900-million investment in Cred has raised concerns about growing foreign influence over India's fintech sector and financial data ecosystem, think tank GTRI said on Tuesday.

It said that the deal gives Meta a foothold in one of the country's richest repositories of consumer financial-behaviour data, covering credit cards, loans, investments, insurance, and UPI transactions.

PhonePe, Google Pay, and WhatsApp Pay are already linked to Walmart, Google, and Meta, respectively, it added.


On the other hand, it said China built its digital payments ecosystem through domestic champions such as Alipay and WeChat Pay, keeping ownership and strategic control within Chinese companies.

However, India has allowed foreign firms to build dominant positions on top of public digital infrastructure, it said, adding that it risks transferring ownership of valuable financial data assets to foreign-controlled ecosystems.

Meta will invest Rs 8,550 crore (about $900 million) in Indian fintech firm Cred, and has appointed its founder, Kunal Shah, as the new global head of messaging platform WhatsApp.

"The central issue is not whether Meta gains access to Cred's data today. It is whether India is gradually allowing control over the financial data of millions of economically active citizens to migrate into foreign-owned digital ecosystems. The Meta-Cred deal may ultimately be remembered less as a funding round and more as a milestone in that transition," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said.

He said that Cred, which was founded in 2018, has one of India's richest repositories of consumer financial-behaviour data and its roughly 17 million users provide information on credit cards, repayment records, spending patterns, bill payments, loans, investments, insurance purchases, and increasingly UPI transactions.

"The company processes more than 40 per cent of India's credit-card bill payments, giving it a uniquely detailed view of the financial lives of affluent Indians," Srivastava said.

Cred may not provide access to customer data to Meta today, but GTRI expects that all of this data will soon be directly or indirectly made accessible for Meta's use, which can further use/sell them for training AI models.

"Meta's $900 million investment in Cred raises concerns about growing foreign influence over India's fintech sector and financial data ecosystem," he said.