The Fintech revolution is shifting how the world pays.
Welcome to a new era in payments using subscription app solutions directly into the hands of our 7.2 Billion global population.
It’s been dubbed at the most transformative use of technology in our modern world next to artificial intelligence. The financial industry is going through it’s greatest revolution in Payments, Insurance, Wealth and Lending. With a booming investment portfolio and global market value of (US) $38 Trillion, FINTECH is shifting every economic market and exploding in growth like an out of control virus.
In this trend, we take a look at key challenges for start-ups, the impact of tapping into mass markets such as China and India through smart phone technology, how cryptocurrencies are gaining power and according to Business Intelligence, the prediction of robo-advisors managing (US) $8 Trillion in global assets by 2020.
Probably the biggest customer lead portion of Fintech is the consumer payment gateway systems or digital wallet. Leaders in this space are Alipay and Applepay.
Alipay has connected to it’s mass market of 1.3 Billion people who use smart phones in China to make payments through online banking and money transfers. Gone is the ideology of even going into a bank to be served by useless tellers, now customers are writing their own rules and technology is growing to support their diverse needs.
It was only a few years ago that the thought of paying by tapping your phone sounded like a novel idea by ‘Alipay’ has used it’s data to guide expansion and capatilise on this market.
Apple Pay is another payment gateway who’s strategy is to partner up with existing banks and credit card companies such as American Express, People’s Choice Credit Union and ANZ bank in Australia.
Apple Pay sells their services and an easier way to pay with your debut an credit cards by simply touching your smart phone onto a ‘point of sale’ (POS) system.
The idea behind this is pure convenience and they back it up by saying that banking details are never shared when making payments with your iPhone, Apple Watch, iPad, and Mac is the safer, more private way to pay.
Processing leaders in the payment gateway are impressive start-up Stripe. Started by brothers Patrick and John Collison, Stripe has grown into a giant company in terms of transactional value for thousands of companies and key partnerships with Silicon Valley E-Commerce company Shopify.
Stripe is built for developers, makers and creators. Stripe provides a developer-friendly way to accept payments online and in mobile apps direct to your bank accounts from a range of local and international cards.
Indian village economies
One of the biggest reason for mass transformation within the FINTECH sector is the idea of tapping into mass regional economies, particularly those in remote places in India. About 70% of India’s population currently live in rural areas.
FINTECH has exploded in India over the last 2 years with the Government prioritising an urgency on management of finance, payments, pensions, savings and bank account schemes for the unorganised workforce, children, and the unbanked.
In addition, there are more than 400 companies (200 start-ups) providing FINTECH products and services. By 2020, the market value of Indian Fintech sector is poised to grow to (US) $73 Billion according to Deloitte. This is largely due to the surge in numbers of people accessing these products through smart devices.
Some of the hottest start-ups in this space are One97 who provide local payment solutions or mobile wallets, BankBazaar providing instant customized quotes on loans and Fintellix who provide risk analytics products to a B2B market.
Data led insights through mobile driven data will ultimately shape each start-up and mature companies in India. Within each village economy lives a diverse set of cultural rules which companies need to understand in depth.
By connecting services into this space, we need to prepare for side effects of financial management into places that have survived without it.