The past few years have seen seismic shifts in the realms of financial and payment technology. The increasing adoption of technologies that support contactless payments sits alongside an almost unprecedented explosion in mobile payments to form part of a constantly changing FinTech landscape. This shows that consumers and businesses alike are prepared to bank and transact in ways that would have been almost inconceivable even a decade ago.
The value of mobile commerce transactions alone grew by more than 800% between 2010 and 2015, and it seems safe to assume that smartphone-based payment and transaction systems are here for the foreseeable future. But what technologies – and new players in the market – might shake up the FinTech world in 2016 and over the next few years?
The Big Players in FinTech
One thing is clear: financial transactions are no longer the exclusive domain of banks and other traditional financial services providers. The opening up of the financial playing field, that arguably started with PayPal almost two decades ago, continues apace with services from big-name providers, such as Apple Pay, Google Wallet, and the more recent Android Pay.
The latter is currently only available in the US; however, Google has confirmed its intention to roll out Android Pay in the UK within the next few months. We’ll also be seeing the rival Samsung Pay system introduced in the UK this year, while other handset manufacturers, including LG and Huawei, are set to launch their own Android-based digital wallet platforms.
Other major players are getting in on the act, too. Reports suggest that Facebook is looking to launch an in-store payment service, most likely through its Messenger app. The social media giant has over 1.5 billion active users, so its entry into this new market could certainly create waves. Retail powerhouse Amazon is – for now – taking a slightly different approach, rolling out its Amazon Payments service to shoppers checking-out at other third-party online stores through an ambitious “Global Partner Program”.
FinTech Start-ups to Watch
It’s always difficult to predict what will be the next innovation or disruptive technology that will shake up the market or change the way we do things, but here are a few start-ups that could be worth keeping an eye on in the months to come:
Atom Bank – This Durham-based start-up is one of a new breed of digital-only challenger banks largely aimed at providing younger, tech-savvy customers with an alternative to traditional banking institutions. At its heart is a banking app with a fresh, unique look and integrated biometrics that allow users to log in via voice or facial recognition. Investors clearly believe in the potential of this new contender: it has so far raised £135 million in capital.
Mondo– Another tech-driven challenger bank, Mondo is currently raising capital to start “building a bank as smart as your phone”. As well as offering banking services such as mobile money transfers and real-time breakdowns of your spending patterns, Mondo’s mobile app will offer direct integration with third-party services like Uber and Transport for London. Mondo hit the news recently when its crowdfunding efforts broke records by raising its first £1 million in just 96 seconds.
Feedzai– Not strictly a brand-new start-up, Feedzai was founded in 2011, but its cutting-edge technological approach to combatting card fraud has rewarded it with 300% year-on-year growth. Feedzai uses a combination of big data and fluid machine learning to identify fraudulent payment transactions more quickly than other anti-fraud solutions, and as payment fraud (particularly in e-commerce) shows no signs of abating, we expect this relatively young company to continue to grow.
Oradian– Based in Croatia, Oradian supports smaller financial institutions in developing markets, including a number of West African nations, by providing cloud-based Software as a Service (SaaS) solutions in areas where financial services providers may still be using spreadsheets or even handwritten ledgers to update customer accounts and balance their books. Oradian’s services provide easy access to management information and help microfinance institutions, credit unions and cooperatives provide financial products to clients in even the most rural areas.