The banking industry did wonders to get fintech to where it is today, as perhaps the world’s most rapidly accelerating and profitable sector. Now that coupled with bitcoin’s recent explosion has led many less tech-savvy companies to desperately fight to stay afloat in this drastically changing world. For as sophisticated as many fintechs already are, this has not squashed the plethora of challenges that they now face in their fight for companies looking to stay competitive. Up till this point, banking has laid the foundation for modern fintech, such as account creation, debit and credit card payments, and transaction processing across the internet at countless consumers’ fingertips. Not only do many of these non-fintech companies want to allow users to make seamless purchases from the comfort of their homes, but want to effortlessly allow customers the options of loans and debit and credit cards right from their stores and websites.
The popularity of the fintech sector has led to huge developments from major corporations such as Google, Apple, and Mastercard, but more importantly it has inspired endless startups to get their feet wet, and their rapidly approaching the likes of those aforementioned. For example, Kenya has been making headlines for making some of the most drastic fintech innovations in the shortest time, as their inaccessibility to national internet distribution and modern tech such as smartphones and computers has made progress slow up until approximately 2005. One way in which they’ve made progress came from telecommunications company Safaricom, which developed its service called M-Pesa which allows users to make transactions without the use of an internet connection, but rather uses a technology similar to the likes of text messaging. Startups say they have the upper hand over long standing giants as their foundations have been laid with the newest technologies, which provides them the opportunity to offer very specific and tailored services to their customers. However, competing with giants such as Galileo and Marqeta will take more than this, as they easily still dominate the market.
On top of this, other challenges for businesses entering this space include banks’ willingness to work with startups over major fintech corporations such as payment processor Stripe, and the issue of trying to increase the number of customers sharing partners as companies grow larger. The choice of who to involve themselves with will be a challenging one for businesses entering the sector for the first time, as the choice is overwhelming. From giants such as Galileo and Marqeta, to countless startups with limitless potential, choosing a proper business partner is worth the research and effort it takes to make such a decision.