Fintech solutions improve your bottom line whether you’re a solopreneur or small business, B2C or B2B. From helping you access much-needed capital to helping you create a seamless shopping experience for your consumers, fintech products help you thrive in today’s hyper-digital market.
The Rise of Fintech
Financial technology, or fintech, began disrupting markets across the globe a decade or more ago as the world became more digitized. It has been one of the most vital sectors in the commercial industry. But the pace of acceleration was heightened by the COVID-19 pandemic. Consumers around the world went online to share, connect and purchase everything from groceries to clothing. As a result, businesses that wanted to survive the economic disaster had to adjust and quickly bring their business model online. A McKinsey report states that e-commerce penetration doubled in the first quarter of 2021. As a result, startups Plaid and Stripe almost tripled their valuation in one year.
The pandemic forced retailers to look beyond checkout optimization and other techniques to create a smooth shopping experience. Retailers needed better payment options, too, opening the way for fintech innovations such as digital wallets, virtual credit cards, and touchless transactions. All of these factors contributed to a stunning spike in the saturation of financial technology across all verticals.
What is Fintech?
Financial technology utilizes the internet, cloud services, software technology, or mobile devices to connect consumers and small businesses to financial products. By leveraging these technologies, fintech provides small businesses with more flexible and efficient financial services. With humble beginnings as the back-end systems of banks and other traditional financial institutions, financial technology has evolved to become
- mobile payments
- digital banks
- online lending
- crowdfunding platforms.
The worldwide fintech market was valued at approximately $127.66 billion in 2018 and is expected to grow to around $309.98 billion through 2022. Driving this growth is digital payment providers who make it easier for your customers to make purchases straight from your website.
The Power of Fintech
Fintech has improved the financial lives of billions of consumers around the world. In undeveloped nations, it’s provided precedent-setting opportunities to access financial products. Disadvantaged populations have the chance to move out of poverty and improve not only their own lives but the economic well-being of their entire community.
Financial technology products make it possible for retailers to complete transactions online. Shoppers have more options than ever before to make online payments, regardless of location and what device they’re using. You can buy a product from across the world from the convenience of your smartphone.
How Does Fintech Improve Your Bottom Line?
Fintech applications simplify the process of applying for startup business loans, managing your invoices and accounts payable, making payroll, and creating cash flow forecasts. Below are a few examples of how fintech products can help you reach your business goals.
One of the most common challenges startups and small businesses face is cash flow gaps caused by unpaid invoices. FinTech solutions automate the accounts payable and payment process from procurement to invoicing to payment. If you’re paid more quickly, you’ll have sufficient cash flow to invest in your business.
Fintech software apps incorporate machine learning, artificial intelligence, and task management to reduce the time you need to perform traditional accounting tasks. For example, with automated accounting, your staff is no longer busy dealing with discrepancies in purchase orders, invoices, or mismatched vendor information. In addition, the entire system integrates easily with your bank’s software.
Utilizing cutting-edge software solutions like FreshBooks and QuickBooksOnline to automate your accounting procedures creates a transparent process that helps you gain a competitive edge in the marketplace.
Fintech created an ecosystem in which alternative financing platforms could develop and thrive. If you’re a startup or small business, you know the challenges of applying for financing from traditional lenders. Banks tend to view a small business as a credit risk. This is especially true if you’re a startup and lack evidence of revenue success. If you don’t have a strong banking relationship, have poor or no credit, your chances for approval are slim to none. But even beyond these issues, applying for financing from a bank requires multiple meetings, onerous paperwork, and a lengthy approval process.
The alternative financing industry offers an opportunity to access capital when you need it. Platforms like Fundbox, Kabbage, and Giggle make it easy for you to apply online using your computer, tablet, or smartphone. You’ll quickly find if your application has been approved.
Global Currency Exchange
If you have international clients and customers, fintech helps you avoid the overhead of currency exchanges and international money transfers. If you utilize traditional financial institutions, such as banks, fees can be as high as 3 percent. Fintech companies such as OFX and TransferWise, improve your bottom line and help you scale internationally.
Fintech Products Improve Online Payments
Fintech-based online payment systems provide your customers with a flexible, seamless payment process, making the entire shopping experience more enjoyable. As a result, they are likely to stay on your site longer and spend more money.
Mobile payments, such as PayPal, Apple Pay, Google Pay, and WePay, speed up the checkout process. As a result, you can service more online customers even during peak shopping hours. Customers will not become frustrated and leave your site.
Check out the Forbes “The Future of Payments: Fintech 50 2021” for a list of payment apps that can help you improve your bottom line and customer success.
Buy Now, Pay Later
The biggest story in the fintech world is Buy Now, Pay Later (BNPL) solutions. Your consumers need your services or products now, but they may not have room in the budget to pay for them. BNPL providers like Klarna, AfterPay, and Affirm offer the opportunity for your consumers to buy the more expensive items they want and pay them off in manageable installments. The platforms perform a soft credit check which means your consumers can get the products or services they want without negatively impacting their credit score. BNPL is a win-win for you and your consumers.
After such a strong performance, B2B brands are also eyeing BNPL. Surveys reveal that B2B companies are open to shifting to a fully self-serve or remote purchase environment. Startups like Resolve and Tillit are moving in to take advantage of this new trend.
While governments and institutions worldwide continue to assess the vulnerabilities of cryptocurrency, some creditors have already jumped on board. PayPal’s “Checkout with Crypto” is one example of a giant leap into mainstreaming cryptocurrency as a digital payment option. Of course, it’s not a complete transition yet, as PayPal takes your crypto at checkout and converts it to traditional currency. But it’s a big step forward toward acceptance of cryptocurrency as a transactional currency.
Fintech Protects Financial Data Security
One of the top worries for consumers today is data security. Providing a safe platform for your consumer to conduct transactions will help you improve your bottom line. Fintech solutions like Aspiration, Simility, and Feedzai secure mobile and online transactions, keeping you and your consumers safe.
The benefits of tapping into cutting-edge financial technologies cannot be overstated. Fintech solutions improve your bottom line from optimizing your e-commerce portals to delivering cash when you need it. Combined with a proactive and consistent digital marketing strategy, you are sure to gain an advantage over your competitors.
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