India may overtake China as the world’s leader in fintech service adoption, according to a report released by Ernst & young, entitled EY FinTech Adoption Index 2017.

The report analyzes different nations’ fintech usage in five categories – money transfer and payments, borrowing, savings and investment, financial planning and insurance – to determine not only each nation’s current fintech adoption rate, but also its future fintech adoption rate. In other words, it measures how many people in each country have already adopted fintech and how many people in each country will adopt it in the future.

These adoption rates are based on what’s known as the Roger’s innovation adoption curve, which categorizes countries into one of five categories, based on their adoption rate: brave pioneers, early adopters, early majority, late majority, and laggards.

According to the survey, only China and India have reached the fourth stage of “late majority.” All other countries trail far behind.

It also concludes that, even though China currently boasts the world’s highest adoption rate of 69%, its predicted future adoption rate is only anticipated to reach 77%. By contrast, India currently lags behind China with its 52% adoption rate but is anticipated to ultimately reach an adoption rate of 80%.

Overall, the global adoption rate is expected to reach 52%.

The report also attributes the high adoption rates in countries like India to the famous “leap frog” effect. Simply stated, because they lack the banking infrastructure that North America and Europe rely on, they have incentive to invest in fintech, because it is cheaper to create an electronic infrastructure than a physical banking infrastructure. Or, as China Tech Insights Reports: countries like India “all skipped past the credit card era to jump directly into the mobile payment age.”

Though India is expected to overtake China in the adoption of fintech, however, specialists do not necessarily see India’s emerging fintech sector as competition for its Chinese counterpart. Rather, the development of India’s fintech sector is poised to benefit the Chinese companies that have already invested millions into India’s fintech sector.

In fact, participating in the active development of India’s fintech market has become the strategy of some Chinese fintech companies to help them expand their own operations into their neighboring market.

For example, Ant Financial has been injecting funds into India’s leading mobile payment platform, Paytm, since early 2015, when it obtained a 25% stake in the company. Today, it is the largest shareholder of One97, Paytm’s parent company. The Chinese internet giant even sent 20 people to Paytm’s New Dehli headquarters to rebuild its technology platform and risk control system. Paytm’s users subsequently jumped in numbers from 30 million to 220 million in April 2017.

Since New Delhi moved to invalidate high denomination bank notes, Indian companies, themselves, have sought alternative payment platforms to traditional cash. As a result, many have taken to wooing foreign investors, especially from China.

MobiKwik, an Indian e-wallet firm, is one such example. The company is backed by Hong Kong and Taiwanese investors, and the number of its bank transfers increased 1000% after the aforementioned announcement.

Regardless of which country, China or India, comes out of this transitional period as the world’s fintech leader, Chinese companies, themselves, stand to gain from the rise of Indian fintech.

Read more at: China Tech Insights, South China Morning Post, and TechNode