Technology from merely being an enabler to being the core proposition is very evident over the last couple of years and the drastic development of this massive piece in the whole scheme of Fintech is particularly very interesting for all of us at Prequate who have been watching the industry closely with the good fortune of being able to work with a few genius entrepreneurs in this space.
What started with PayPal back in 1999 has taken its time to grow and with most governments leaning towards cashless transactions it has suddenly picked up the pace all over the world.
Few reports suggest the cashless transactions volume will more than double by 2030 and the number of transactions will grow by 3 times in that time frame.
Banks are growing to be heavily reliant on the data from the payments tech as nearly 90% of the useful customer data is from this sub-sector.
Another promising stat is that Alternative payment methods are the fastest growing space when you consider the transactional revenues as against Banks, Merchant service providers, Card networks, Third-party processors and Terminals.
Asia is largely driving this growth with new business models acting as enablers and the rise in SuperApps. Regional public payment infrastructures like BHIM in India, ELO and PIX in Brazil and Troy in Turkey are truly a catalyst for the growth of digital payments in emerging economies.
India’s payments landscape is picking up pace and no one imagined this would happen. The payments infrastructure laid down by NPCI is truly revolutionary and more innovations in this are around the corner solidifying India’s position as a market leader in payment solutions.
In 2021, $128Mn+ investments at a Pre-Seed, Seed and Series A combined. This dropped to just a little over $65Mn in 2022. However, the exciting bit is that Pre-Seed and Seed stage investments were higher in 2022 than in 2021 which to an extent is an indicator of innovations in the payments sector.
There are 6 major trends in the payments industry globally
+ Inclusion & Trust
Thailand’s PromptPay is leading this with 43Mn subscribers out of the 69Mn population.
+ Digital Currency
Growth of private cryptocurrencies and Govt. backed CBDCs.
+ Digital Wallets
Traditional payments working with technology providers to ease the process with an increased emphasis on B2B payments.
FIS & Global Payments leading this and are likely to see more players and consolidation.
+ Cross Border Payments
Blurring borders is caught up in roadblocks but has started to ease up a little. F27 in the Nordic region unifies 27Mn people across 4 countries under one payment system.
With a 70% increase in attempts for fraud the vulnerabilities of tech are plenty and we are witnessing unprecedented growth of industries catering to Cybersecurity, Blockchain and Data Privacy