Payments have long been the lynchpin of the fintech sector, with large investment flows and innovation coming from some of the biggest players in the space. The rapid advancement of technologies such as Blockchain, AI and Machine Learning, along with the increasing adoption of mobile offerings, has created a whole new payment landscape.
In the US, payment solutions such as Paypal, Stripe and Square have become household names, and have proved to be hugely successful. In the UK too, new fintech innovations such as Monzo, Starling and Revolut have demonstrated the utility and appeal of new payment systems. In total, companies offering payments are estimated to have raised more than $83 billion over the last five years.
One of the main drivers of this investment is an increasing move towards mobile-first payments solutions. With more than half of all payment transactions now taking place via smartphone, customers now demand the convenience of instant payments on the go. Along with the growing appetite for cashless payments, this has created a fertile ground for new entrants to the payments space.
Alongside increased investment, the payments sector is also seeing a move towards regulatory change. As awareness of payment related crimes such as money laundering increases, government regulators are taking a greater interest in making sure that payment services comply with existing regulations. As such, a range of new regulations have been implemented in recent years, ranging from the European Union’s Second Payment Services Directive (PSD2) to the UK’s Open Banking initiative. Such measures are aimed at ensuring customers can make payments safely and securely.
Undoubtedly, payments remain the darling of the fintech sector. With a range of exciting new offerings and a strong focus from regulatory authorities, there is no sign that the fintech Payments Revolution is slowing down anytime soon.
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