• Contact Us
  • Login
Upgrade
Tech News Hero
Advertisement
  • Home
  • News
  • Gadgets
  • Social
  • Gaming
  • Mobile
  • PC
  • Internet
  • Security
  • Apps
No Result
View All Result
  • Home
  • News
  • Gadgets
  • Social
  • Gaming
  • Mobile
  • PC
  • Internet
  • Security
  • Apps
No Result
View All Result
Tech News Hero
No Result
View All Result
Home News

Who will the winners be in the future of fintech? – TechNewHero

by technewshero
December 23, 2019
in News
0
Share on FacebookShare on Twitter

Nik Milanovic is a fintech and financial inclusion enthusiast, with a decade of work across mobile payments, online lending, credit and microfinance.

More posts by this contributor

  • Fintech’s next decade will look radically different
  • Libra’s critics are missing the forest for the trees

So what happens when fintech ‘brings it all together’? In a world where people access their financial services through one universal hub, which companies are the best-positioned to win? When open data and protocols become the norm, what business models are set to capitalize on the resulting rush of innovation, and which will become the key back-end and front-end products underpinning finance in the 2020s?

It’s hard to make forward-looking predictions that weather a decade well when talking about the fortunes of individual companies. Still, even if these companies run into operating headwinds, the rationale for their success will be a theme we see play out over the next ten years.

Here are five companies positioned to win the 2020s in fintech:

1. Plaid

In 2014, I met Zach Perret and Carl Tremblay when they reached out to pitch Funding Circle on using Plaid to underwrite small and medium businesses with banking data. At the time, I couldn’t understand how a bank account API was a valuable business.

Plaid’s Series C round in 2018 came with a valuation of $2.65 billion, which caught a lot of people in fintech off-guard. The company, which had been modestly building financial services APIs since 2012, recently crossed the threshold of 10 billion transactions processed since inception.

For those unfamiliar with Plaid’s business model, it operates as the data exchange and API layer that ties financial products together. If you’ve ever paid someone on Venmo or opened a Coinbase account, chances are you linked your bank account through Plaid. It’s possible in 2020 to build a range of powerful financial products because fintechs can pull in robust data through aggregator services like Plaid, so a bet on the fintech industry is, in a sense, a derivative bet on Plaid.

Those 10 billion transactions, meanwhile, have helped Plaid understand the people on its’ clients fintech platforms. This gives it the data to build more value-added services on top of its transactions conduit, such as identity verification, underwriting, brokerage, digital wallets… the company has also grown at a breakneck pace, announcing recent expansions into the UK, France, Spain, and Ireland.

As banks, entrepreneurs, and everyone in-between build more tailored financial products on top of open data, those products will operate on top of secure, high-fidelity aggregators like Plaid.

The biggest unknown for aggregators like Plaid is whether any county debuts a universal, open-source financial services API that puts pricing pressure on a private version. However, this looks like a vanishingly remote possibility given high consumer standards for data security and Plaid’s value-added services.

2. Stripe

Predicting Stripe’s success is the equivalent of ‘buying high,’ but it is hard to argue against Stripe’s pole position over the next fintech decade. Stripe is a global payments processor that creates infrastructure for online financial transactions. What that means is: Stripe enables anyone to accept and make payments online. The payment protocol is so efficient that it’s won over the purchase processing business of companies like Target, Shopify, Salesforce, Lyft, and Oxfam.

Processing the world’s payments is a lucrative business, and one that benefits from the joint tailwinds of the growth of ecommerce and the growth of card networks like Visa and Mastercard. As long as more companies look to accept payment for services in some digital form, whether online or by phone, Stripe is well-positioned to be the intermediary.

The company’s success has allowed Stripe to branch into other services like Stripe Capital to lend directly to ecommerce companies based off their cashflow, or the Stripe Atlas turnkey tool for forming a new business entirely. Similar to Plaid, Stripe has a data network effects business, which means that as it collects more data by virtue of its transaction-processing business, it can leverage this core competency to launch more products associated with that data.

The biggest unknown for Stripe’s prospects is whether open-source payment processing technology gets developed in a way that puts price pressure on Stripe’s margins. Proponents of crypto as a medium of exchange predict that decentralized currencies could have such low costs that vendors are incentivized to switch to them to save on the fees of payment networks. However, in such an event Stripe could easily be a mercenary, and convert its processing business into a free product that underpins many other more lucrative services layered on-top (similar to the free trading transition brought about by Robinhood).

Previous Post

Twitter Advises Users to Update Android App, Fixes Serious Security Vulnerability

Next Post

This Weatherproof EDC Kit Includes a Knife, Pen, & Notebook

technewshero

technewshero

Related Posts

Fluence, the energy storage systems developer, is now worth over $1 billion after QIA investment – TechCrunch
News

Fluence, the energy storage systems developer, is now worth over $1 billion after QIA investment – TechCrunch

by technewshero
January 13, 2021
Elon Musk says SpaceX will attempt to recover Super Heavy rocket by catching it with launch tower – TechCrunch
News

Elon Musk says SpaceX will attempt to recover Super Heavy rocket by catching it with launch tower – TechCrunch

by technewshero
January 14, 2021
2020 will change the way we look at robotics – TechCrunch
News

2020 will change the way we look at robotics – TechCrunch

by technewshero
January 15, 2021
Trump vetoes major defense bill, citing Section 230 – TechNewHero
News

Trump vetoes major defense bill, citing Section 230 – TechNewHero

by technewshero
December 24, 2020
Bandit ML helps e-commerce businesses present the most effective offer to each shopper – TechNewHero
News

Bandit ML helps e-commerce businesses present the most effective offer to each shopper – TechNewHero

by technewshero
December 23, 2020
Next Post

This Weatherproof EDC Kit Includes a Knife, Pen, & Notebook

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Most Popular

How to Know If You’ve Been Hacked—and What to Do About It

How to Know If You’ve Been Hacked—and What to Do About It

December 15, 2020
Lenovo’s $2,499 foldable ThinkPad is ready for preorder, joined by its lightest X1 laptop ever

Lenovo’s $2,499 foldable ThinkPad is ready for preorder, joined by its lightest X1 laptop ever

January 15, 2021
The Police’s Military Tactics Turn Peaceful Protests Violent

The Police’s Military Tactics Turn Peaceful Protests Violent

December 15, 2020

Browse by Category

  • Apps
  • Gadgets
  • Gaming
  • Internet
  • Mobile
  • News
  • PC & Laptops
  • Security
  • Social
Tech News Hero

© 2020 Tech News Hero.

No Result
View All Result
  • Home
  • Landing Page
  • Buy JNews
  • Support Forum
  • Contact Us

© 2020 Tech News Hero.

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?