Fintech Trends-We are now over a decade into the third era of finTtech innovation, which grew out of the fallout from the 2008 global financial crisis and the advent of the smartphone.
With record amounts of investment flowing into the sector again in 2018, this innovation train shows no signs of slowing. However, in the past couple of years, it has rounded a curve and started to branch off in some interesting new directions.
The curve? Consumers reaped most of the benefits of the early part of this wave, with more efficient payment and lending products leading the way. However, investment in B2B fintech startups has been ramping up for the past couple of years, and by year’s end we can expect to start to see businesses reap the benefits of the fintech wave in three major ways:
The early years of this third era saw a lot of very cool consumer payment products: The use of checks and physical wallets declined as people paid with smart phone apps. Mobile phones also proved to be a boon for the unbanked — meaning people without credit cards or even bank accounts– something very common in developing countries.
In that regard, Kenya’s mPesa has been leading the way by letting people in markets long underserved by banks store and transfer money, using their phones.
All the while, B2B payments involving fintechs have been chugging along slowly and steadily, but lately they’ve really picked up speed. This is a market that has long been underserved by banks. Business payments are rife with complexity, manual processes and paper checks. Fintech solutions, on the other hand, can automate more of the process, not just move money from point A to point B, which is all that banks do.
Up-and-comers in this market include WorldRemit, which, on the heels of closing $175 million in new funding, announced its WorldRemit for Business service, which will facilitate cross-border money transfers to pay employees and contractors.
Then there’s Ripple, which is building a global, blockchain-based payment network. My own company, Nvoicepay, was recently acquired by Fleetcor, which has been quietly assembling a portfolio of B2B payments companies over the past several years.
Banks have had a lock on business payments for decades, but we’ve seen that consumers have gotten comfortable turning to tech companies which have a better offering; and I predict that businesses are going to follow suit.