Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: BaaS, Embedded Finance, API, Digital Banking
Zelle App Shuts Down, Shift to Bank Integrations
Payments | April 7, 2025
Image: Freepik/wayhomestudio
Zelle App Shuts Down, Service Still Going Strong
In 2017, Zelle, a U.S. payment service launched by a consortium of major banks and credit unions to compete against fintechs, enabled people to send money directly between accounts, instantly and securely. It's similar to Canada's Interac e-Transfer service but built for U.S. markets and has larger volumes.
Last October, Zelle updated consumers on their plan to shut down the Zelle app because most users were already using Zelle transfer services from within their banking apps. In fact, according to Early Warning Services LLC (the consortium that runs Zelle), 98% of Zelle's $1 trillion of transactions in 2024 took place through participating financial institutions and only 2% using the Zelle app.
See: Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud Handling
Zelle’s payment network now connects over 2,200 banks and credit unions, and has 151 million American users that trust it to send money directly from their accounts. The story isn't all sunshine though, as Zelle faced significant scrutiny over fraud and scam concerns. In late 2024, the U.S. Consumer Financial Protection Bureau (CFPB) sued several large banks over their handling of fraud on the Zelle network. The complaint was dropped in early 2025, but the questions around user protection remain.
Implications and Lessons
There are some key lessons for Canadian fintechs and credit unions with the news that Zelle is shutting down its dedicated app and continuing to grow through banking apps.
First, it shows that deep internal integrations within banks still work. Each financial institution that offers Zelle builds it directly into their own mobile or online banking platforms. They all use shared infrastructure provided by Early Warning Services LLC, the company that runs the Zelle service, which is owned by the banks themselves.
While the bank integrations of Zelle's payment services seems like embedded finance, it's not the same how fintechs are using the term today. Zelle isn’t being embedded into third party platforms or consumer apps, such as non-financial e-commerce sites. There’s no third-party fintech providing the payments layer. Instead, Zelle operates like a closed payments network run by banks, where each institution manages its own compliance and risk but share the same rails.
See: Zelle’s New Refund Policy Might Set New Standard
The model proves that bank collaborations can scale, allowing them to compete with financial technology competitors. By integrating Zelle into their own systems (legacy or otherwise), banks offered users a trusted way to send money without requiring the setup of another application. So, even though Zelle had a brand, a good UX/UI and performed well, users preferred to use the tools available inside their trusted bank app that they already use.
Another key lessons here is that as Zelle grew, so did fraud concerns. Regulators raised alarms about scams and missing consumer protections. The lessons is, the bigger your network gets, the more important it is to invest in fraud prevention, user education, and strong governance and oversight, to support growth.
Lastly, the same group of banks behind Zelle also launched a digital wallet called Paze, designed to make online shopping faster by allowing people to check out without typing in card details. It's part of the same strategy, and another example where banks are providing trusted payment tools within the banking system instead of relying on third party fintech apps.
Conclusion
Trust is fragile. Building a successful payment or fintech service doesn't always require a flashy new app, if you users can use the service where they already are or inside a trusted environment. The Zelle story also highlights that bank-led collaborations can compete with fintech innovation at scale, if well executed and governed.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Smarter API Integration with VoPay’s AI-Powered Assistant
Vopay | March 5, 2025
Image: Freepik/rawpixel.com
VoPay’s AI GPT Assistant is Transforming Fintech with Smarter, Faster, Fintech Integration
On March 4, 2025, Vancouver-based embedded payment solutions leader, VoPay, has revealed its latest innovation, it's API GPT Assistant. It's an AI-powered tool designed to help developers integrate financial technology solutions quickly and efficiently. By using advanced language models, it automates API documentation, troubleshooting, and even front-end development to significantly reduce integration time.
See: Embedded Finance: Banking Meets the Customer
Hamed Arbabi, CEO and Founder of VoPay:
“Integration is often the biggest hurdle in adopting new financial technology. With our API GPT Assistant, we are eliminating that friction—empowering developers to build faster, more accurately, and using the programming languages they prefer. This isn’t just about convenience; it’s about fundamentally accelerating financial innovation.”
Who is it for and How Will They Benefit?
The API GPT Assistant is built for developers, fintech startups, enterprises, and product teams looking to setup a payment API integration seamlessly. VoPay's API GPT assistant serves as an interactive guide with automated API call requests, real-time debugging and code suggestions across multiple programming languages including Python, JavaScript, C#, and PHP, and integration strategies. It can also create front-end payment interfaces and ensure compliance with industry regulations, helping teams integrate financial solutions with focused efficiency, and all customized to their specific use case(s).
See: Key Findings from 2025 Advanced Payments and Fintech Survey
Simply put, the assistant reduces complexity and saves a lot of time required for implementing fintech integrations. Developers no longer need to struggle through extensive documentation or troubleshoot errors manually, as the AI provides instant solutions tailored to their platform. By accelerating API implementation, companies can properly setup, launch, and scale financial products faster and more accurately. With this type of instant troubleshooting and 24/7 expert support, teams can focus on innovation, instead of being bogged down with hiccups.
VoPay’s Expanding Fintech Ecosystem
VoPay has been actively building a robust fintech ecosystem through strategic partnerships and groundbreaking innovations. The fintech is constantly improving how businesses handle payments. By refining its embedded payment technology, the company is making it simpler for businesses to add seamless, secure financial transactions directly into their platforms. Below are just a few examples to check out:
VoPay teamed up with Mastercard to make international payments quicker and safer. This partnership helps businesses move money across borders in real time, reducing delays and improving security.
VoPay is growing its presence in the U.S. by working with Cross River Bank. This allows businesses to use major payment networks like ACH and Real-Time Payments (RTP), making transactions smoother and more efficient.
VoPay’s payment technology made it easier for people to donate to charities using GiveWise. As a result, donations went up by nearly 50%, and more funds were sent to charities.
Real estate investment company, Parvis, started using VoPay’s payment system, reducing the time it takes for payments to go through from a full week to just a few days, giving investors quicker access to their funds and drastically speeding up transactions.
VoPay set up a special AI research lab to explore how artificial intelligence can improve financial processes. The lab focuses on predicting financial trends and automating repetitive tasks, helping businesses make smarter decisions and work more efficiently.
Conclusion
By reducing integration barriers and providing intelligent, real-time support, VoPay is helping businesses implement secure, scalable payment solutions with unprecedented ease. As AI adoption continues to transform financial services, VoPay remains at the forefront, driving efficiency and innovation in fintech solutions.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Top Trends from Forbes’ 2025 Fintech 50 List
Fintech Ranking | Feb 20, 2025
Image: 2025 Forbes Fintech 50 (Illustration by Óscar Raña for Forbes)
What We Can Learn from the Forbes Fintech 50 in 2025
Every year, Forbes publishes their annual ranking of the top Fintech companies. Checkout the Forbes Fintech 50 in 2025, showing fintech companies that continue to grow despite pressure on company valuations and a slowdown in investment in the sector. According to the judges who select and rank the top 50 at Forbes, this year there's been a rise of business-t0-business fintechs, as well as the increasing importance of fraud prevention and financial security companies.
| Category | Total Funding ($M) | # Companies |
| Payments | 4482 | 11 |
| Personal Finance | 3812 | 8 |
| Business to Business Banking | 3794 | 11 |
| Wall Street and Enterprise | 1892 | 9 |
| Insurance | 1742 | 4 |
| Blockchain and Cryptocurrencies | 1670 | 3 |
| Real Estate | 508 | 2 |
| Investing | 265 | 2 |
1. B2B Fintechs Strong Showing
More than half of the companies on the list provide fintech services to other businesses rather than consumers. Categories like Payments and B2B Banking are seeing strong growth as businesses turn to fintechs to automate and improve their operations, reduce costs and streamline regulatory challenges. Fintech goes well beyond innovative consumer digital banking, it's morphing into improving financial systems at scale. Wall Street & Enterprise fintechs are also playing an outsized role in modernizing financial infrastructure at the institutional level.
See: 10 Fintech and Crypto IPOs 2025 – Boom or Bubble?
The chart below illustrates the number of fintech companies in each category, emphasizing the dominance of business-focused fintechs:
Image: Total # of Fintech Companies by Category (Forbes Fintech 50, 2025)
The chart below shows the total funding received by fintech category, showing which categories are bucking the trend despite the downturn.
Total Funding by Fintech Category Forbes Fintech 50, 2025
Payments fintechs still lead the pack with over $4.4 billion in total funding. This aligns with their critical role in powering e-commerce and digital transactions worldwide.
2. Focus on Profitability Amidst a Funding Slump
In the early 2020s, fintech companies focused on rapid growth but times have changed and they are now after profitability and sustained growth. This year, 13 companies on the list reported official profits (up from just eight last year). Investors and businesses alike are prioritizing financial health over unchecked expansion.
See: CIX 2025 Fintech and AI Startup Award Winners
Even though global fintech funding fell from $144 billion in 2021 to $34 billion in 2024, most companies on this year’s Forbes Fintech 50 have shown resilience. Major players like Stripe and Ramp have adapted by pivoting, reducing costs while focusing on efficiency.
3. Fraud Prevention and Security Are More Important Than Ever
As digital transactions increase so do fraud risks. Security based fintechs are gaining traction as businesses need stronger protections against cyber threats and fraud. DataVisor, a company that uses advanced machine learning to detect fraudulent transactions experienced a 67% increase in revenue in 2024, reaching $50 million.
4. Lending Fintechs Comeback
Companies like Arc, Aven, and Imprint have made their way onto this year’s list, showing that the lending market is regaining investor confidence. Nova Credit, for example, previously fell off the list but re-emerged this year with a renewed focus on cash flow underwriting and a fresh approach to risk assessment.
5. One Canadian Contender, Relay
While much can be argued about the methodology of actually being selected for the Forbes Fintech 50 list. To be honest there are several significant Canadian fintechs that should be on the list but aren't for whatever reason, such as Wealthsimple. But Relay made it so something to cheer about.
See: Key Findings from 2025 Advanced Payments and Fintech Survey
They are a Toronto-based digital banking platform for small businesses and provide financial management tools that integrate with accounting software, making it easier for businesses to manage their money. In 2024, they raised $32.2 million in a Series B funding round, strengthening their market position and offerings.
Top Fintech Companies by Category
Here’s a closer look at a couple of standout fintech firms within each category:
Payments
- Stripe – A global online payments leader providing seamless transaction infrastructure for businesses
- DailyPay – Helps employees access earned wages before payday, improving financial flexibility for millions
Business-to-Business (B2B) Banking
- Relay – Canada’s only fintech on the list offering digital banking for small businesses
- Parafin – Uses marketplace data to underwrite loans, achieved 100% revenue growth in 2024
Wall Street & Enterprise
- DataVisor – Specializes in AI powered fraud detection, growing revenues by 67% in the past year
- Alloy – Provides identity verification solutions for financial institutions, automating compliance and security processes
Personal Finance
- True Link – Offers financial services for vulnerable populations including the elderly and those with disabilities
- Chime – A digital bank providing fee-free accounts and early direct deposits
Insurance
- Ethos – Makes life insurance more accessible with a fast, tech-driven application process
- At-Bay – A cyber insurance company that proactively monitors digital risks for clients
Blockchain & Cryptocurrencies
- Figure – Uses blockchain to offer home equity lines of credit and mortgage refinancing
- Fireblocks – Provides secure infrastructure for handling digital assets
Real Estate
- Aven – Introduces innovative financing solutions to make real estate investments more accessible
- Valon – A mortgage service provider making home loan management simpler and more transparent
Why This Matters
The 2025 Forbes Fintech 50 shows the race for scale is now about profitability with payments, security, infrastructure, and B2B services leading the way. For Canada, Relay’s presence on the list is promising but begs the question, why aren’t more Canadian fintechs on the list?
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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2024 Global Fintech Funding Insights for Investors & Founders
Fintech Report | Jan 16, 2025
Image: State of Fintech 2024 (CB Insights)
'State of Fintech 2024' Funding, Deals and Innovations for Growth in 2025
CB Insights published it's annual 'State of Fintech 2024 - Global Recap' report (whopping 200 page PDF) with the top line being global financial technology funding dropped 20% year-over-year to USD $33.7 billion. Certain sectors continue to shine with innovations in payments, blockchain and embedded finance showing robustness for 2025. This article presents key trends and takeaways for fintechs and investors to digest.
Key Global Funding Trends in 2024
Global fintech funding in 2024 dropped 20% year-over-year to USD $33.7 billion (deal volume also shrank 17%). It was a sobering year with macroeconomic headwinds in the air from volatile interest rates, cautious investment landscape, and geopolitical instability.
The payments sector led and captured 40% of total funding as embedded finance and B2B solutions enjoyed growth, as companies of all stripes looked to integrate financial services.
See: Fintech Trends & Predictions Across Generations in 2025
Enterprise adoption and tokenization drove blockchain funding to $6.5 billion globally, as more use cases emerge beyond speculative trading of cryptocurrencies.
Unicorns were rare sightings with only two (2) new fintech unicorns rearing their head in Q4, 2024, for a total cumulative count of 326 unicorns to date. Many established unicorns continued to thrive.
M&A activity increased 6% year-over-year with 664 exits including Stripe's $1.1 billion acquisition of Bridge.
Regionally, the U.S continued to dominate its position as the largest fintech market raising $3.9 billion in Q4.
Latin America was the fastest growing market fuelled by financial inclusion initiatives, raising $1.1 billion in Q4 alone.
Despite the global funding drop, one silver lining was the focus on quality over quantity (and then backing up the truck), driving a 33% increase in the median deal size to $4 million, primarily allocated to late stage firms with clear growth trajectories. While seasoned investors dominated activity, newer investors pulled back.
Investor Perspective
Although 2024 was largely a challenging environment, key late stage opportunities particularly in payments and blockchain firms such as Stripe’s $1.1B acquisition of Bridge and Zepz’s $267M Series F. Notably, embedded finance attracted over $14 billion globally, as non-financial platform businesses looked to integrate financial services as a new source of revenue.
See: Wealth Management Insights for Fintechs and Investors
- Total global fintech funding fell to $33.7 billion (20% decline yoy)
- Embedded finance boosted payments funding to $14 billion globally
- Total blockchain funding $6.5 billion
- Median deal size increased 33% (yoy) to $4 million
- Focus on later stage companies with strong business models and proven scalability in high growth sectors like blockchain infrastructure and cross-border payments
Founder Perspective
Fintech funding was more scarce in 2024. Global deal volumes shrank 17% but median deal sizes increased 33% to $4 million year-over-year. Not surprisingly, founders who aligned their models with hot trends like AI personalization tools and embedded finance had more success in securing funding.
See: M&A Opportunity as Fintech Valuations Drop
- AI is becoming an essential tool in fintech. Use cases are growing in lending and wealth management
- Blockchain funding expected to exceed $8 billion globally in 2025
- Embedded finance revenue is projected to exceed $140 billion in 2025 (growth potential)
- Cross border payments is forecasting 20% growth in 2025 due to global commerce
- Notable deals in 2024 - Public securing $105 million, and Zest AI raising $200 million Series H
- Founders should align their offerings with global trends and build partnerships with established players while focusing on scalability and gaining investor trust
2024 Fintech Funding in Canada
In 2024, a total of $300 million was raised across 14 deals in key sectors such as blockchain, digital banking and payments. Canada accounted for a modest 0.9% share of global fintech funding but its focus on niche sectors like blockchain and payments make it stand out. A few notable deals include:
- Neo Financial raised USD $80 million in a Series D round
- Blockstream secured USD $152 million through a convertible note
- PiP World attracted USD $10 million in seed funding
- Canadian fintechs are uniquely positioned to capitalize on AI automation in wealthtech and insurtech sectors. Collaboration with U.S. and European markets could expand Canada's influence in 2025
Closing Outlook
While fintech in 2024 was a reflective year, fintech in 2025 offers some big opportunities in blockchain, AI, and cross-border payments. Embedded finance will continue to expand to new industries, creating new ways for customers to engage. Create scalable ideas, form smart partnerships and stay ahead of key trends in this fast changing market. Learn more, download the full 200 page report from CB Insights.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Fiserv Acquires Payfare to Boost Gig Economy Solutions
Fintech M&A | Jan 2, 2025
Image: Freepik/rawpixel.com
Fiserv Acquires Payfare for CA$201.5M to Scale Gig Economy and Embedded Finance Capabilities Globally
Toronto-based financial tech firm specializing in earned wage access (EWA) and digital solutions for gig economy workers, Payfare Inc., announced that it has entered into a definitive agreement to be acquired by global fintech giant, Fiserv, for a total purchase price of CA$201.5 million in an all cash deal. The transaction is being structured as a court-approved plan of arrangement as per British Columbia’s Business Corporations Act and is expected to close in H1 2025 subject to shareholder and court approvals.
Payfare’s Focus and Value of the Gig Economy
Payfare is a recognized leader in workforce payments and digital banking tools for gig workers and partnerships with major gig economy platforms such as Uber and Lyft, processing millions of transactions annually that paid out wages faster and more efficiently than traditional payment structures, such as bi-weekly or monthly.
See: How Fintechs Are Tackling Financial Inclusion in Canada
In the U.S. alone, the gig economy employed 36% of the entire U.S. workforce or 59 million workers in 2021 and is projected to reach $455 billion globally by 2025. Payfare’s tools address critical needs in this rapidly growing sector, making it a valuable asset for Fiserv.
Transaction
Fiserv will acquire all issued and outstanding shares of Payfare for CA$4.00 per share in an all cash deal, representing a significant 90% premium over Payfare's closing price on Dec 20, 2024 ($2.11), and a 92% premium over its 60 day volume weighted average trading price.
By acquiring Payfare, Fiserv expands into the gig economy, one of the fastest growing sectors globally. Embedded finance offerings that cater to gig-focused workers and businesses will add new revenue streams and strengthen Fiserv's position in the digital payments space with customized tools for the modern workforce.
Frank Bisignano, Chairman and CEO of Fiserv:
“Payfare has built a reputation as an innovator in workforce payments for gig-economy companies. Together, we can accelerate the delivery of embedded finance solutions for all of our clients, empowering their next chapter of success.”
Why Did Payfare Sell?
Payfare experienced scaling challenges and with the loss of its major client, DoorDash, revenue's sharply declined along with its stock price plummeting over 50% in Q4, 2024. Before the acquisition was announced, Payfare's stock was experiencing significant volatility, declining from CA$8.43 to CA$2.05 in October 2024.
See: How This Fintech Is Helping Low-to-Moderate Income Earners
While the acquisition will provide Payfare with the resources and infrastructure to stablize and expand, the deal highlights a troubling trend in Canada's fintech sector where companies exit early due to scaling challenges.
Marco Margiotta, CEO and Founding Partner of Payfare:
“This transaction represents tangible recognition of the value and strength of what Payfare has built.”
Looking Ahead
Post closing, Payfare will no longer be a publicly traded company and its shares will be delisted from the TSX and OTCQX markets. For Payfare, joining Fiserv is a chance to scale its gig economy and embedded finance solutions globally.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Key Findings from 2025 Advanced Payments and Fintech Survey
Fintech and Payments Research Report | Nov 12, 2024
Image: Advanced Payments and Fintech Report 2025 (Edgar, Dunn and Co.)
Insights and Opportunities for Global Payments and Fintech Innovations 2025
Edgar, Dunn & Co. has just dropped the 17th edition of the 2025 Advanced Payments and Fintech Survey (103 page PDF report) digging into the latest innovations and momentum powering the global payments industry forward. The report brings together insights from a 100 senior payment professionals from around the world who explore the influence of emerging technologies like AI, IoT, and blockchain, the rise of digital banking, and the impact of alternative payment methods and Central Bank Digital Currencies (CBDCs).
See: 2024 Global Payments Growth, Trends, and Fintech’s Edge
This post by NCFA Canada highlights the key findings from the payments survey and uncovers the latest data-driven and actionable insights to propel your business forward, providing a strategic roadmap for growth.
Key Findings from the Advanced Payments Survey
The survey was hosted between May and July 2024 with responses from 100 senior payments professionals around the globe.
1. Top Use Cases for AI and Machine Learning in Payments
- 85% of respondents see AI’s primary role in risk management and fraud detection.
- 51% identified customer behavior analytics as a growing application of AI.
- 55% say automating operations for error-free and quicker payments is a priority.
2. B2B Cross-Border Payments in Play
- 52% of respondents said B2B payments are the main focus for cross-border innovations given the demand for efficient and low cost international transactions.
See: AI, Funding Shifts and Regulatory Hurdles in Fintech 2024
3. Sectoral Growth in Digital Payments
- Retail and e-commerce are expected to lead digital payment adoption (65%), with remittances (48%) and travel (46%) also ready for growth.
4. Future Growth in Payment Methods
- Digital wallets (88%) and bank transfers (57%) dominate the future payment landscape, a shift away from traditional credit card payments.
- Buy Now Pay Later (BNPL) solutions are also gaining traction, particularly among younger consumers.
5. Mobile Solutions and Instant Payment Demand
- 68% of respondents expect instant payments to become standard, as consumers demand faster and more convenient transactions.
6. Influence of Regional Trends
- Asia-Pacific leads in expected payment innovations (50%), with Europe following at 23%. Canadian Fintechs can look to these regions for inspiration in mobile and instant payments.
7. IoT’s Role in Enhancing Payments
- IoT devices for payments such as wearables and connected cars are gaining momentum, particularly in retail and automotive sectors.
8. The Role of Security in Mobile Banking
- 63% of respondents stress the importance of biometric authentication to enhance mobile banking security.
- Real-time payment features are equally critical with 57% saying these as essential for consumer trust.
9. Open Banking and Open Finance as Innovation Catalysts
- According to the majority of responders, Open Banking is remain a major driver for financial innovation that enables third party access to financial data, fuelling the rise of customer-centric financial ecosystems. Open Banking is evolving into wider initiatives like Open Finance and Open Data, creating opportunities to enhance competition and improve customer experiences. (See: OECD 2023: Key Insights on Open Finance Policies | EU: MiCA, DORA, Open Finance Framework, and Digital Euro)
Image: Freepik/rawpixel.com
Strategic Insights from the Report
1. Digital Banks and Profitability
- Digital banks have seen huge growth but most still aren’t profitable (some are).
- Around 85% struggle with high customer acquisition and operating costs.
- Cutting acquisition costs by using AI for targeted marketing can save them up to 25%.
- Automating manual processes can trim costs by 30%.
- If digital banks can get customers to make digital banks their primary accounts it can make a big difference since primary account holders contributing almost 70% more in revenue.
2. AI and Machine Learning in Payments
- AI is transforming payments with powerful tools for fraud detection, personalization, and efficiency.
- Payment processors like Visa analyze millions of transactions per second with AI, catching suspicious activity instantly and reducing fraud-related losses by up to 30%.
- AI automation has been shown to reduce payment processing times by half, saving labour costs.
See: How Real-Time Agentic AI Will Boost Fintechs
- Personalized AI-based customer service is another advantage (becoming a new standard) with approx 45% of consumers now expecting personalized digital experiences whe it comes to their financial services.
3. Blockchain as a Cross-Industry Solution
- Blockchain technology reduces cross-border remittance costs by as much as 60%, thanks to its ability to remove intermediaries and process transactions directly. This savings potential is huge for the $750 billion remittance market.
- Blockchain’s secure, decentralized structure has reduced fraud cases by up to 30% in companies using it.
- Its versatility also extends beyond finance to industries like supply chain management and insurance who use blockchain to ensure transparency and accuracy in their operations. (See: Investing in the Future of AI and Blockchain)
4. IoT Payments Transforming User Experiences
- IoT-enabled payment devices such as wearables or connected cars are set to reach $6 billion in transaction value by 2028 with roughly 20% of consumers adopting these options especially in the retail and automotive sectors. See: Autonomous IoT Transactions and Micropayments
- Visa’s connected car technology allows drivers to pay for fuel directly from their vehicles, while Samsung’s wearable devices make payments as simple as a tap.
- Businesses benefit from real-time data insights that can boost sales by up to 25% through personalized offers and loyalty programs.
5. Alternative Payment Methods (APMs) and Mobile Wallet Growth
- Alternative payment methods, especially mobile wallets are on track to overtake credit cards as the primary payment choice by 2028.
- Mobile wallets already account for nearly 60% of online transactions in Asia, showing their global growth potential. However, the lack of compatibility between wallets (especially cross border) will limit usage until interoperability.
See: The Role of Fintech in the Circular Economy
- It’s estimated that increasing wallet interoperability could boost transaction volumes by around 30% with companies like Apple Pay and Alipay leading the charge in wallet expansion.
6. Central Bank Digital Currencies (CBDCs) in Cross-Border Payments
- Central banks are exploring CBDCs but most retail CBDCs face slow adoption.
- Wholesale CBDCs show promise in reducing cross-border transaction costs by 50% according to central bank estimates.
- China has issued over 180 million digital yuan wallets reaching $250 billion in transactions, while the European Central Bank is aiming for a digital euro by 2027.
- These efforts illustrate how countries are exploring CBDCs to make international payments faster and more cost effective.
7. B2B Cross-Border Payments and Fintech’s Role in Efficiency
- Traditional B2B cross-border payments face high costs, delays, and FX fees, often adding up to 8% in extra expenses.
- Fintech solutions are addressing these inefficiencies by cutting out intermediaries and offering better exchange rates.
- Companies like Ripple and Wise save businesses around 20% in transaction fees.
- The B2B cross-border market is projected to reach $56 trillion by 2030, and fintech solutions are essential in making these transactions more efficient and affordable.
8. Open Banking’s Evolution to Open Finance
- Globally, open banking is expected to grow to a $123 billion market by 2031, with platforms like Plaid and Moneyhub demonstrating the potential for open finance to enhance financial services.
- Data from a recent PwC study indicates that 72% of global Fintech investors favor open finance ecosystems due to their potential for customer retention and revenue growth.
See: Canada’s Innovation Paradox – Strong Start, Missing Impact
- Canada lags behind in open banking adoption limiting its fintech sector’s growth as investors are beginning to look outside Canada for open finance opportunities. Embracing open finance could boost competition and consumer choice, opening doors for more innovative financial products.
- 63% of Canadian consumers are interested in services that aggregate their financial data for streamlined financial planning. However, only 15% of Canadian banks currently offer comprehensive data-sharing capabilities.
- The UK has led the way with over 7 million open banking users and a 15% year-over-year growth in payment transactions linked to open finance. Canada’s hesitant rollout could place it at a disadvantage if regulatory and technical hurdles are not addressed quickly.
9. Digital Remittance Transformation
- Digital remittance solutions like Remitly and Xoom have significantly lowered transfer fees from traditional methods 7-10% to around 2-3% rates.
- Digital remittance is growing 10% annually, especially in areas with high migration rates such as Canada, offering an affordable alternative for underserved populations.
- Digital remittance platforms support financial inclusion by reducing fees which enables remittance families to retain more income for daily needs or investment.
10. Financial Inclusion Through Innovative Payment Solutions
- Roughly 24% of the global population is still considered unbanked (typically in emerging markets).
- Mobile money and digital wallet services are addressing this gap.
See: How Fintechs Are Tackling Financial Inclusion in Canada
- Greater financial inclusion through digital payments could add $3.7 trillion to emerging markets’ GDP by 2025.
- Kenya’s M-Pesa service exemplifies how mobile finance can provide essential banking services without traditional banks. Other countries can follow suit by improving digital infrastructure.
11. Insurtech and Embedded Finance Driving Financial Innovation
- Insurtech is growing rapidly with the market expected to hit $152 billion by 2030.
- Advanced data analytics let insurers offer custom policies, adjusting based on real-time user data.
- The offering of financial services by non-financial platforms via embedded finance is helping companies improve user experiences. For example, Shopify’s embedded financing options make it easier for small businesses to access funds directly on its platform with integrated services.
12. Evolving Retail and Gig Economy Payment Models
- Personalizing retail experiences increases purchase likelihood by about 40%, making social commerce and omnichannel strategies more essential.
- Gig economy workers and small businesses want real time payments. Half of gig workers prefer platforms offering instant payouts.
- Real-time payments also reduce administrative work for platforms so transactions run more smoothly and offer a better user experience.
13. The Resilience and Decline of Cash Usage
- Cash is losing ground worldwide as digital payments rise with some countries seeing cash used in less than 5% of transactions.
- Having said that, cash still plays a key role in areas with limited digital access or where people have less trust in banking institutions.
- While cash usage may continue declining, local economies and infrastructure gaps mean it won’t disappear anytime soon.
Closing Thoughts
The convergence of emerging technologies and their adoption globally reveal major shifts in global payments representing significant opportunities for fintechs as AI, IoT, blockchain, digital banking, open and embedded finance broaden access to financial services, making corss-border transactions faster and easier than ever before.
See: Industry Reports and Research
For fintech founders and investors, the survey uncovers prime areas for growth. Companies need to prepare for a more connected financial ecosystem and high bar for speed and inclusiveness to meet today's demand. Integrating these technologies and tools is about building a future of finance that's user-friendly, secure, and accessible.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SEC Insights on Balanced Regulation and Non-Bank Finance
Regulation | Speech | Oct 30, 2024
Image: Freepik/rawpixel.com
Uyeda’s Insights on a Global Framework for Balanced and Adaptable Finance for Growth
At the 2024 AIMA APAC Annual Forum, one of largest gatherings of regulators, hedge fund managers, and alternative finance and institutional investors in the Indo-Pacific region, SEC Commissioner Mark Uyeda delivered a talk around key issues including regulations for private funds, advancements in digital assets, and the importance of international cooperation among financial regulators.
See: Innovative Approaches to Smarter Regulation
Uyeda's perspective offers valuable insights for global markets especially for those aiming to strike the balance between innovation and regulatory supervision. Below are five quotes from Uyeda's speech, each reflecting on his approach to supporting a global framework for balanced financial future.
1. Supporting Growth with Balanced Private Fund Regulation
“Private fund regulation should be precise, safeguarding investors without becoming an impediment to growth.”
Commissioner Uyeda raised concerns that overly prescriptive rules could limit innovation within funds by focusing disproportionately on compliance rather than allowing room for a diverse range of approaches to investing. Such strict rules might discourage large investors from participating in alternative asset classes and strategies and they would miss out on higher yielding returns that perhaps better align with their investment goals.
See: Balancing Fintech Innovation and Regulation
He believes that rules should be designed to allow private fund managers the freedom to innovate while still ensuring transparency and accountability to investors. The key takeaway here is that regulation should support growth without unnecessary restrictions.
2. A Nuanced Approach to Digital Asset Regulation
“The approach to digital assets should avoid blanket prohibitions; instead, it should consider each asset’s unique characteristics and risks.”
Uyeda's comment highlights that digital assets need a customized approach in regulating them. Specifically, rules should be adapted to the unique features and risks associated with varying digital assets rather than a one-size fits all approach. This is true in markets around the world including the U.S. and suggests the way forward is (again) balanced growth with responsible oversight ultimately crafting flexible guidelines that support innovation while addressing specific traits of crypto and other new technologies.
3. Embracing Non-Bank Finance to Catalyze Innovation
“Non-bank financial entities are critical to a diversified economy, providing essential liquidity without the rigidity of traditional banks.”
Uyeda argues that non-bank finance (sometimes called 'shadow banking') plays an important role in maintaining diverse markets and resilience. Instead of looking at non-bank finance as purely a risk, he highlights its importance in driving economic stability and spurring innovation.
See: Federal Reserve Launches Novel Activities Supervision Program Targeting Digital Assets and Non-Bank Partnerships via Banks
He believes that policymakers should support these types of finance while still keeping markets stable, and that such an approach is especially important for economies that benefit from a range of funding sources to fuel growth.
4. The Importance of Global Regulatory Cooperation for Stability
“Global regulatory collaboration is not just beneficial but essential to maintain financial stability in an interconnected market.”
He believes that global regulators must collaborate and in doing so they can develop a unified way to oversee financial risks that cross borders. This kind of teamwork is especially beneficial for sectors like crypto and alternative finance where consistent and agreeable (global) standards will help drive innovation while also keeping global markets stable.
5. Building Sustainable Growth Through Adaptability and Transparency
“Transparent, adaptive regulation is the foundation of sustainable market growth.”
Uyeda stresses the importance of having clear and flexible regulations especially in fintech and alternative finance where things evolve quickly and regulations need to be adaptable. This mindset and approach helps build a financial environment that remains up to date with new technologies and trends while keeping investor protection a priority.
See: Insights from the UK’s Pro-Innovation Regulation Review
Looking into the future, change is constant. Uyeda’s focus on having adaptable and transparent rules is a way to future-proof financial systems for whatever challenges and opportunities come their way.
A Global Framework for Balanced Finance
Uyeda’s insights show the value of regulatory frameworks that protect investors while allowing room for economic growth and innovation. That means adaptable and well tailored regulation along with a spirit of international collaboration is necessary to keep the economy strong and competitive. Great lessons for any regulators including Canada looking to balance innovation, growth, and investor protection.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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