Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Payments, Transfers, Rewards
AI, Funding Shifts and Regulatory Hurdles in Fintech 2024
Fintech Report | Nov 11, 2024
Image: Fintech's Vertical Integration Into Banks (SVB 2024 Future of Fintech report)
5 Takeways from Silicon Valley Bank's Future of Fintech 2024 Report
Fintech never sleeps. It's been constantly evolving since NCFA Canada launched over a decade ago. Last month, Silicon Valley Bank dropped a 24 page data filled PDF report with a comprehensive outlook of the latest drivers of change in "Future of Fintech 2024". As regulatory pressure increases combined with a tougher funding environment and game-changer AI on the rise, fintech firms have both new obstacles and also fresh opportunities. This article looks at the top 10 insights that capture how the fintech industry is changing so that fintechs and investors can adapt accordingly.
1. Generative AI is Reshaping Fintech
- The report shows that AI focused fintech companies that raised approx. $3.6 billion in 2020 have now reached a total value of over $9 billion, showing that they've gained a lot of investors and their trust.
- AI is seen as a big shift in finance for a range of sectors, especially for portfolio management and market analysis given that AI tools can churn through real time data and make personalized recommendations or execute logic on behalf of users.
See: Some Exciting Fintech Stats (2023-2025)
- Klarna’s chatbot has massively improved customer support, slashing response times to just 2 minutes down from 11 minutes, replacing work done by hundreds of people.
- Mentions of AI in earnings calls have increased by 400% since 2021.
- AI is now actively being used for compliance, claims handling, and customer support, and is helping lower costs and streamline administrative regulatory tasks.
2. Increasing Regulatory Pressure on Fintech
- The FDIC has started cracking down more, primarily aimed at fintech-bank partnerships.
- Although these partner banks only make up a small part of the U.S. banking ecosystem, they account for over 10% of serious regulatory enforcement actions issued by regulators. Confirming that regulators are in deed keeping an eye on these partnerships and on a short rope.
- September 17, 2024 the FDIC suggested that banks and their fintech partners should keep more detailed records and set stricter standards for compliance.
3. Funding, Valuation Pressures, Increasing Costs, Exits, M&A
- According to the SVB report, VC fintech funding declined 91% since peaking in 2021. Only $5 billion was raised this year as of September 2024. For more insights see CB Insights Q2 global fintech funding report including some data on Canada.
- Series B and C investments are also bottoming out which are near decade lows (and need for more realistic fintech valuations).
- Larger deals above $200 million are becoming rare and now represent only 28% of investments (down from nearly half of all deals in the peak of 2021).
- More challenging now to move from Seed to Series A funding. The report highlights that only a few fintechs that started in 2022 or 2023 have successfully made the transition from seed to Series A funding. That's quite a drop given that only a few years ago about 20% of fintech firms successfully jumped the chasm.
- More startups are going for repeat seed rounds as it's more difficult to secure Series A. The difference in value between seed and Series A rounds is shrinking, making Series A investments appear like a better balance between risk and reward. Series A is seen as a safer option now, with adjusted valuations making it a more attractive funding round in a tough market.
See: European Fintech 2024: Profits Rise, Unicorns Fade
- th the fixed and variable costs involved of acquiring new customers has almost doubled. This adds more burden on companies as interest rates have also increased putting pressure on profits. As rates start to decline (hopefully) it will provide some relief to firms.
- The cash reserves of American tech unicorns shows a median runway of 20 months in 2024. This is a much shorter runway that past years where firms had access to cheaper funding conditions and less pressure on cash flow.
- Strategic partnerships like eBay and Venmo's collaboration are becoming more common as companies look for partnerships that can help reduce high costs of operating on their own.
- The exit rate per 10 late-stage deals has fallen from 3.9 in 2021 to 2.7 in 2024 (read: tougher exit market).
- IPOs and public exits are rare. Only 15% of M&A deals are disclosing terms which means it's a buyer’s market where valuations typically favour the buyers.
4. Growth in Embedded Finance and Payment Innovations
- Payment-tech now represents more than half of the fintech sector's valuation and is a huge part of the fintech unicorn scene.
- Major banks spent about $161 billion in acquisitions since 2020, choosing to buy fintech capabilities instead of building them internally from the ground up.
- Partnerships are growing like Wells Fargo and Bilt Rewards, but profitability is tough due to higher customer acquisition costs.
5. Focus on Efficiency and Reducing Burn Rates
- About 80% of fintechs saw improvements in EBITDA margins over last year. Top companies lowered their burn rates by half since 2022.
- Almost a third of U.S. fintechs have only 6-12 months of runway cash (up from 20% last year), showing the importance of sustainable growth strategies.
- Smaller fintechs with under $10 million in revenue show a median cash runway of just 10 months. They are looking for faster paths to profitability.
Closing Outlook
With tougher funding conditions, heightened regulatory scrutiny, and rising costs, fintech firms are focusing on partnerships and innovation to drive growth.
See: Investing in the Future of AI and Blockchain
AI is already a powerful and widely used tool, helping companies streamline, cut costs and integrate fintech deeper into traditional banking. the current environment calls for a lean approach while aiming for sustainable growth and profitability.
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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BoC Opens Registration for Retail Payment Service Providers
Retail Payments Regulation | Nov 1, 2024
Image: Freepik
🚀 Registration Now Open for Retail Payment Service Providers
The Bank of Canada has officially launched the registration process and is now accepting registrations from payment service providers (PSPs) as part of the new Retail Payment Activities Act. This rule requires all PSPs in Canada to register to make the country's retail payments safer, more dependable, and transparent. To comply, PSPs need to complete their registration on the PSP Connect portal by November 15, 2024.
- The updated regulations are in place to help PSPs manage risks and safeguard consumer funds with clear standards for compliance and accountability. PSPs are expected to follow specific guidelines to protect funds and operate effectively.
- To make this process easier, the Bank has provided step-by-step instructions, video guide, and dedicated support options for PSP Connect. This help ensures PSPs can successfully complete their registration and meet the requirements of the Act.
See: New Bank of Canada Case Scenarios for Retail Payments
- These changes fit into Canada’s larger plan to upgrade its payment systems. The goal is to create a secure, resilient and inclusive payment environment that adapts to new technologies.
📋 Next Steps for PSPs to Register
If you’re a PSP, here’s what you need to do to ensure compliance with the new Act:
- Create an Account on PSP Connect (Google chrome, Microsoft edge, Firefox). Access PSP Connect at https://rps.bankofcanada.ca/
- Complete and Save Your Registration Application. Fill in all required fields and upload necessary documents. You can save your progress and return if necessary.
- Submit Application and Pay the Registration Fee. Non-refundable registration fee of $2,500 Canadian (must be paid in full for your application to proceed)
See: Canada’s Retail Payments Boom: $11.9 Trillion Growing Fast
📞 Need Assistance?
If you have any questions or run into technical issues, here’s how to get support:
- Questions about the Registration Process: Email: rps-compliance@bank-banque-canada.ca
- Technical Issues with PSP Connect: Service Desk open Monday to Friday (7AM to 5PM Eastern)
- Free call North America: 1-888-882-8863
- Free call International: +800-782-27800
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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Reducing The Costs of Remittances
Almond FinTech | Howard Davidson | Oct 30, 2024
Image: Freepik/Creativeart
Remittances, the money sent home by migrants working abroad, have become a fundamental financial lifeline for emerging markets across the planet.
In 2023, the volume of global remittances reached a staggering $890 billion, significantly outpacing the current amount of foreign direct investment and official development assistance coming in. These payments now play an important role in supporting millions of families while also helping to stabilize economies in developing nations.
With international economic leaders meeting at the 2024 IMF-World Bank discussions, remittances and their impact will be a core component of their discussions. Their increasing importance to the global financial system calls for urgent attention, especially as countries look at ways to reduce the high costs of sending money across borders.
The Fundamental Role of Remittances in Emerging Markets
Remittances are a financial powerhouse for emerging markets, with $669 billion flowing into these economies in 2023 alone.
For many countries, they are more than just supplementary income—they’re lifelines. In nations like Tonga, Tajikistan, and Lebanon, remittances make up over 30% of their GDP, directly highlighting just how much these economies depend on funds sent by their citizens abroad.
Beyond providing basic household support, remittances play an essential role in helping to shore up national finances. They help countries fill gaps in current accounts and reduce fiscal deficits, especially for those with limited access to international capital markets.
Having a steady stream of capital coming in from overseas can provide some much-needed stability to developing economies under strain.
Macroeconomic Factors Influencing Remittance Flows
Remittance flows are closely tied to the economic health of more advanced economies like the U.S. and Europe.
When these regions experience strong GDP growth and healthy labor markets, migrant workers tend to send more money home, boosting remittance levels. However, when a recession hits, or inflation rises, the story changes completely.
Economic slowdowns in these countries often lead to lower incomes for migrants, which means less money is sent back to their families. During those tough times, remittance flows can shrink significantly, impacting both individual households and entire economies.
In fact, remittances now make up one-sixth of all global cross-border payments, illustrating just how vital they are to the greater global financial system.
The High Cost of Sending Remittances
Sending money across borders comes with a steep price tag for many migrants. On average, the cost of sending remittances globally is 6.35% of the total amount, which is well above the World Bank’s target of 3% and the G20’s goal of 5%, creating a significant burden for those who rely on these transfers.
The cost varies widely depending on the region, and in some cases, especially in certain cross-border corridors, fees can climb as high as 20% of the remitted amount. So, for every $100 that’s sent, a migrant may be spending as much as $20 on transaction fees alone, which is a significant loss for families already facing severe financial constraints.
These high fees severely limit the amount of money migrant households can actually use. Instead of saving or reinvesting in local economies, they lose a substantial portion of their income to transaction costs.
Reducing these costs isn’t just about convenience—it’s essential for the financial well-being of millions of households that depend on remittances as a key source of income.
Efforts to Reduce Remittance Costs
Reducing the already high cost of remittances has become a global priority for policymakers. Both the World Bank and G20 have set ambitious targets to lower fees, aiming for a 3% cost as part of sustainable development goals and a 5% cap within G20 initiatives—yet, meeting these goals still requires significant action to be taken.
Several existing models already show promise in helping to cut down on these costs. For example, Wise (formerly TransferWise) has successfully reduced fees by integrating nonbank services into the UK’s Faster Payments System. The move has directly demonstrated that including new participants in the payment ecosystem can drive down transaction costs.
Project Nexus is another innovative effort designed to connect domestic payment systems across borders. Through regulatory and technological alignment, Project Nexus aims to enhance interoperability between countries, enabling faster and more cost-effective cross-border transfers.
Fintech companies and the growing digitalization of remittance channels are also key to reducing these costs. Mobile payments and digital remittance platforms tend to offer much lower fees than traditional banks, providing more affordable options for migrant workers.
On top of this, retail digital assets, such as stablecoins or central bank digital currencies, could further decrease costs by streamlining the transfer process and minimizing currency conversion fees.
These growing technological advances represent real opportunities to ease the financial burden being placed on millions of migrant families.
The Current Barriers and Challenges to Cost Reduction
Despite efforts to lower remittance costs worldwide, some significant barriers still remain in place that are hampering progress. One key issue is that remittances often get overlooked in the broader development of cross-border payment systems.
Because these systems are typically built with domestic transactions in mind, remittance needs end up as an afterthought, which keeps fees high. Alongside this, an array of regulatory and technological barriers are also slowing progress.
Initiatives like Project Nexus still face several challenges in aligning regulations and building the necessary infrastructure. Without having seamless coordination between countries, scaling these kinds of projects quickly becomes difficult and costly.
Another major challenge is the current lack of focus on high-volume remittance corridors. For example, the U.S.-Mexico corridor is one of the largest in the world, yet it continues to see high fees and is plagued by inefficiencies.
Cutting down on costs in these key corridors could make a significant impact, but they haven’t received the type of attention they need from policymakers and financial institutions.
A Call to Action for Policymakers
Remittances are a vital lifeline for many emerging markets across the globe, but the high costs that come with sending them continue to weigh heavily on migrant families.
Reducing these fees is fundamental when it comes to improving their financial well-being and overall quality of life. International cooperation is essential here, and global institutions like the G20 and IMF need to prioritize systemic reforms in cross-border payment systems to make transfers faster, cheaper, and more efficient than before.
See: IMF Working on Global CBDC Platform to Revolutionize Global Remittances and Trade
Looking ahead, expanding digital solutions alongside streamlining existing regulations can provide long-term relief, allowing remittances to remain a reliable source of support for millions of households around the world.
About the Author
Howard Davidson is the CMO of Almond FinTech.
Almond FinTech is a B2B fintech company transforming cross-border payments by empowering financial institutions and their customers with the best possible rates and near-instant FX settlements across all corridors globally. With Almond technology, institutions can guarantee fast, affordable, and transparent cross-border transactions. Finally.
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 Case for Better Banking Options for Canadian SMEs
Banking Competition | Oct 28, 2024
Image from BNN Bloomberg, The Close (Cato Pastoll, CEO) Loop Financial)
Canadian small to medium sized businesses (SMEs) show great interest in expanding operations globally to tap new markets and scale but they often encounter an unexpected challenges when they do so. According to Cato Pastoll, CEO of Loop Financial during an interview on a BNN Bloomberg show The Close "Why small business needs better international banking access", Canada's banking infrastructure lacks the necessary capabilities to facilitate their global aspirations. So why is this the case? Canada doesn't have a competitive banking system to support Canadian companies looking to expand globally given there are only a handful of incumbent banks that dominate the market, leaving consumers with minimal choices.
See: Can Fintechs Help Narrow Canada’s Prosperity Gap?
Canada's financial system is heavily concentrated making it harder and more costly for small businesses to access better financial solutions that are available elsewhere. This is especially bad at a time when Canada's productivity is dying on the vine and in major need of a boost. This lack of diversity has resulted in outcomes such as charges, complicated procedures and restricted assistance for cross border transactions.
During small business week, Cato Pastoll spoke to many business owners who were frustrated with Canada's current financial system that failed to support their growth ambitions (understandably so) saying:
"It’s time to switch from unfocused grant programs to a targeted regulatory overhaul to help Canadian businesses succeed."
Fostering Change to Help Canadian Businesses Grow
He highlights two approaches to foster change to help Canadian businesses expand globally without unnecessary barriers.
1. Prioritize Competition
It is time for Canadian policymakers to shift their focus towards prioritizing competition and innovation by backing fintech firms that have the potential to provide innovative solutions for various financial needs. Implementing changes could pave the way for new entrants in the banking industry to introduce services catering to SME requirements like reduced charges and simplified international transactions.
See: CFPB Finalizes Open Banking Rule: What it Means for Canada
By emphasizing innovation and fostering the growth of fintech industry players in Canadas landscape the country could establish accessible financial services aimed at promoting fair competition among businesses (level the playing field).
2. Prioritize Innovation in Banking Services
Canadian businesses require specialized banking services tailored to their challenges in order to stay competitive globally. Fintech firms such, as Loop Financial are actively crafting payment solutions to streamline trade for businesses by offering faster and more convenient options. These innovative financial tools cater specifically to the needs of businesses, and play an essential services role in filling the void left by conventional banks in the market.
See:
Small Step Forward As Feds Publish Straw-man Open Banking Framework
FCAC Embraces New Role in Canadian Consumer Banking
Canada’s Open Banking Framework 2024 Preview
Conclusion
When Canadian companies thrive overseas the positive effects are felt throughout the economy. Expanding internationally leads to job creation, higher economic productivity and nurtures development.. Canadian SMEs need financial services that cater to their growth aspirations. By modernizing our banking system Canada can facilitate the expansion of SMEs that play an underappreciated role in strengthening economic resilience.
Canada's businesses are prepared to face competition but our financial infrastructure needs to keep pace with them.
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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Stripe Acquires Stablecoin Platform Bridge for $1.1 Billion
Crypto M&A | Oct 24, 2024
Image: Freepik
Stripe’s $1.1B Bridge Deal Signals Big Push for Global Crypto Payments
Fintech payments giant Stripe has acquired stablecoin platform Bridge for a whopping $1.1 billion, one of the largest deals in crypto. This is big news for stablecoins and the future of global payments and how Stripe is bringing digital currencies into mainstream adoption.
According to a16z’s "State of Crypto 2024" report, stablecoins are becoming a major part of the digital economy. In Q2 there were $8.5 trillion in stablecoin transactions which far outpaces payment systems like Visa handling $3.9 trillion during the same period.
See: The Federal Reserve Issues State Member Bank Guidance for ‘Dollar Tokens’ (Dollar-pegged Stablecoins)
This growing usage and Stripe's acquisition is validating the use case of how stablecoins are being used for international payments. Bridge’s technology offers companies an efficient way to make stablecoin transactions, and Stripe's integration will make it easier for companies to make digital payments in stablecoins.
Stablecoins are room-temperature superconductors for financial services. Thanks to stablecoins, businesses around the world will benefit from significant speed, coverage, and cost improvements in the coming years. Stripe is going to build the world’s best stablecoin… https://t.co/6yKi7OKXVT
— Patrick Collison (@patrickc) October 21, 2024
Strategic Acquisition
Bridge was recently valued at only $200 million, so post $1.1 billion acquisition price is five times its recent valuation. This premium confirms the value that Stripe believes Bridge's technology can transform current payment technologies. Stripes purchase of Bridge follows the addition of USDC stablecoin payments in over 70 countries. The acquisition is aligned with Stripe's goal to develop robust stablecoin infrastructure and expand its capabilities in global payments, and to make digital currencies a popular choice for businesses worldwide. Bridge's tech is able to serve both large corporations (ie., SpaceX) and smaller enterprises making it a versatile player in digital payments.
See: Stripe’s Total Payment Volume Passed $1 Trillion in 2023
With this acquisition, Stripe can make global payments cheaper and faster providing a solid alternative to traditional methods like SWIFT. This move pressures other payment companies like PayPal and Visa to expand their own digital currency offerings to keep up with the changes in the market.
About Bridge
Bridge it as a competitor to incumbent cross-border payment networks like SWIFT but with the flexibility and speed of blockchain technology. Bridge provides tools for creating, managing, and using stablecoins across several blockchains and was launched in 2022 by ex-Coinbase execs, Zach Abrams and Sean Yu who wanted to make international payments faster and easier to be recognized as a dependable replacement for outdated incumbent networks like SWIFT.
See: 2024 Global Payments Growth, Trends, and Fintech’s Edge
- Bridge allows businesses to create their own stablecoins or use existing ones like USDC. These digital tokens are tied to fiat currencies to keep their value stable so companies don't have to worry about wild price swings when making a transaction.
- Bridge simplifies cross-border payments by using stablecoins linked to currencies like USD which results in faster and cheaper transactions compared to traditional banking methods (especially in areas where banks may be slower or costly). It helps businesses avoid exchange rate changes and high fees.
- Bridge's platform is designed to work with existing banking and fintech infrastructure, so companies can start using stablecoin payments without expensive or timely setup making it relatively easy to use digital currencies alongside traditional methods.
- Bridge ensures that transactions are compliant with regulations and prevents money laundering. It prioritizes security and transparency making it easier for the platform to work with banks and other regulated financial institutions.
Outlook
By bringing stablecoins into its core payment infrastructure Stripe has a major opportunity to actively shape the future of global payments beyond it's current 1% of global GDP moving through its systems.
See: How Permissioned DeFi Will Transform Global Payments
For the fintech ecosystem and digital currency advocates Stripe’s move signals a new phase of acceptance in the crypto space where stablecoins are viewed as essential parts of the global financial infrastructure and not just a speculative trading tool.
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 Payments Growth, Trends, and Fintech’s Edge
Report | Oct 24, 2024
Image: Global Payments in 2024 (McKinsey & Company)
Insights from McKinsey's 2024 Global Payments report highlights fintech opportunities, evolving trends and challenges
The 2024 McKinsey Global Payments Report (17 page PDF) shows that the way users are interacting with payment systems globally is becoming easier but the systems themselves are getting more complicated. This post looks at the trends and opportunities for fintechs (and challenges) that are reported on.
Top Line
- In 2023 the payments industry processed 3.4 trillion global transactions, with a total value of $1.8 quadrillion.
- Global payments generated $2.4 trillion in revenue in 2023, growing 7% annually from 2018 to 2023. Growth is expected to slow to 5% per year from 2023 to 2028, due to lower interest rates and a shift to less profitable payment methods like account-to-account transfers.
See: Canada’s Retail Payments Boom: $11.9 Trillion Growing Fast
- Over the next five years revenues are forecasted to grow by $700 billion, reaching $3.1 trillion by 2028. This will represent approximately 35% of the total banking revenue.
Image: Global payment revenue 2013-2028 (McKinsey)
Insights and Trends (for the Next 5 Years)
- The use of Cash has dropped to 80% of 2019 levels and continues to fall by 4% each year. Countries like India and Brazil are moving quickly towards digital payments but cash usage is declining slower in countries where cards are still prevalent like in the United States. Cash still makes up $26 trillion in global payments so there is still fintech opportunity to capture the digital transition towards full adoption.
- Instant payment systems are moving across major markets and working to replace cash and outdated checks. As an example, in the European Union instant payment transactions are expected to jump from 3 billion to 30 billion by 2028, growing 50% annually.
- Some countries like India, Brazil, and Estonia have implemented strong public digital payment infrastructures (DPI) making digital payments more accessible. This trend is expected to spread further especially in emerging markets like Indonesia and Nigeria who are looking to boost digital payment growth.
See: Goldman Sachs Funds Blockchain Payments Firm
- E-commerce Payment platforms like Shopify and marketplaces like Amazon now handle 30% of global consumer transactions. This trend is especially strong with small to mid-sized businesses (SMEs) where integrated payment solutions are popular. This is putting pressure on banks and other global tech players who are launching their own small business payment tools like Fiserv’s Clover.
- Business clients now expect the same slick payment experiences that consumers get and transaction banking is evolving to meet those needs. Banks like Goldman Sachs and Royal Bank of Canada are investing significantly in transaction banking as they look to compete with specialized B2B payment providers and digital first challenger banks.
- Despite the public and commercial privacy concerns with CBDCs, over 90% of central banks are working on or testing CBDCs. Although it seem like the initial CBDC excitement has worn off, central banks are expecting CBDCs to establish new standards and provide real alternatives to stablecoins.
Implications and Opportunities for Fintechs
- With the rise of instant payments Fintechs can stand out by offering easy to use, mobile-friendly cross-border payment options and improving treasury services with real-time data, not to mention quick payments for gig workers.
- Payment card fraud losses are expected to reach $400 billion over the next decade. Fintechs can improve anti-money laundering and fraud detection systems, and clients can offer that to their customers as a competitive advantage.
See: API Magic: Empowering Payment Services Providers and Fintech Innovators to Scale
- With the growth of digital public infrastructure in some countries like emerging markets, fintechs can develop services that integrate seamlessly with government approved national ID systems, digital wallets, and other payment channels. India's UPI is a good example to review - see UPI One World wallet service
- 23% of SMEs in the UK prefer to use non-bank providers for cross-border payments. Fintechs can develop customized (and personalized) payment solutions that optimize international transactions. See companies like Loop here in Canada who recently raised $6.4 million CAD for a SME-focused global finance platform.
- Payment infrastructure needs to be reliable and operate around the clock 24/7 while handling large volumes globally. Fintechs that build scalable, cloud-based systems will have an advantage over traditional setups that are slower to adapt.
Outlook
Regulatory changes involving interchange fees and consumer protections will impact how global payments evolve. Fintechs need to stay on top of these changes for compliance and earn customer trust. Traditional banks like JPMorgan and RBC are investing big time in updating their digital payment offerings to compete with fintechs. Companies that make strategic investments in technology, partnerships, and maintain compliant will have an edge in an increasingly more complicated and growing global payment sector.
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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Revolut Launches Payment Terminal for Larger Businesses
Payments | Oct 18, 2024
Revolut's New Payment Terminal Targets Larger Businesses to Compete with Square and SumUp
Revolut has launched a new payment terminal designed for larger businesses, which directly competes with established brands like Square and SumUp. This strategic expansion into the Point of Sale (POS) market takes Revolut beyond digital banking services and into more advanced solutions just in time for the busy holiday shopping season, and represents a new revenue stream for the company who is 'doubling down' on its B2B strategy.
See: Revolut’s Crowdfunding Success from Start-up to $45 Billion
- The payment terminal affordable and on pre-sale for £129 + taxes. It press release promises 99.9% uptime, making it dependable for businesses. It also connects with Revolut’s other financial tools that provide insights like sales data, customer management, and table tracking.
- The terminal works with Revolut Pay, allowing customers to pay directly through their Revolut accounts. This gives merchants lower transaction costs at 0.5% + £0.02 per payment, and access to their money within 24 hours which helps manage cash flow during busy times.
- Revolut generates more than $500 million in yearly revenue and boasts 20,000 new business customers joining each month. The launch of this new payment terminal is aligned with their focus of providing better and more services for larger companies.
Alex Codina, General Manager of Merchant Acquiring at Revolut:
We’re excited to be offering Revolut Terminal as an all-in-one, powerful POS solution for our business customers. This launch comes as we continue to invest into our B2B offering and particularly double down on the hospitality and retail industries as an acquirer. A truly reliable payment solution is the difference between closing the sale and losing money – with Black Friday round the corner, Revolut Terminal is built to withstand high customer demand; and it could be yours in time for the busy season at an exclusive, reduced rate.”
See: Revolut Finally Receives UK Banking License (after 3 years)
Why It Matters
Revolut's move into the POS market shows its goal to become a complete financial service provider for businesses. As digital payment methods continue to grow, Revolut’s focus on offering integrated solutions for larger businesses could change how in store payment transactions are managed.
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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