As online commerce created a worldwide business arena, the need for automation and facilitation of the payment process grew exponentially. Nowadays, fintech innovations are changing the face of the payments industry in such a way that financial transactions are becoming faster, easier, and cheaper. Users no longer need to fear that the value of their funds will deflate by the time they get control over their assets. Cryptocurrency, various types of tokens, and other forms of “digital currency” as well as numerous financial apps seem to instill higher confidence in the users than traditional banking procedures.
Banks base their business on loans that come in form of different financial products that you can obtain. Also, disregarding your primary intention, bankers will always try and hook you up with a service package you don’t really need and have to pay for. It’s as if you contact an online essay writer service for a single assignment and you end up hiring that agency for the rest of your semester. On the other hand, fintech solutions allow you to choose the type of service you need and often provide a wide array of personalization features. This way, when you sign up for a payment service, you get only that which you need.
Furthermore, the advancements and innovations in software development allow startups to create a gamified user interface that makes the completion of financial tasks smoother and seamless even to those users who aren’t tech-savvy or have a humble financial operations background.
Fast and secure transactions
Bank transfers can take a lot of time to complete, which could put your business to a halt until you gain control over your assets. Even if the transaction takes less time than usual, you still need to take into account volatile transfer fees, conversion rate losses, and potential banking information security issues. There are numerous examples of online frauds, third-party breaches, and system exploits that make the use of a credit card in the online environment a risky endeavor.
Online payment services allow users to transfer their funds instantly, with lower fees, and often without conversion cost – although this depends on different aspects. Using cryptocurrency or tokens renders the conversion procedure redundant. Furthermore, the two-step verification process as well as blockchain technology features diminish security risks.
Multiple communication channels
Fintech is closely related to traditional banking, it’s all but impossible to find a bank without its mobile app. However, while old-school banks are struggling to squeeze their services into a usable mobile platform, startups have the luxury of designing their software and services according to modern-day user requirements.
In terms of software used in the payment industry, fintech startups also have the advantage of AI-based chatbots and fraud detection algorithms, which are easier and cheaper to implement as a startup than it is for a large financial institution with a large set of operations and services that need to be adapted for this purpose.
It would be too ambitious to say that fintech startups are a threat to conventional payment industry leaders, however, it’s all but certain that finance industry giants need to adapt and learn from new-age competitors in order to stay in business. Either way, the way we transfer and receive money is changing at a pace that can’t and shouldn’t be stopped.