Banks and governments are trying to encourage smaller entrepreneurs to switch to bank accounts or not even accept cash anymore but their interference is likely unnecessary. People are already abandoning cash and now they’re even moving away from cards to mobilepay.
For news about the most interesting fin-tech companies around the world, take a look at the Born2Invest app, which offers professionally curated business news summaries. Prepared by an in-house team of journalists, Born2Invest covers a wide spectrum of topics, such as investing, economies and global markets, trending business news, as well as industry updates on tech, real estate, media, and personal finance.
Fintech is making an impact
FinTech is a contraction of finance and technology. Concretely, the term includes all innovative financial products and services that speed up, modernize and simplify the way we pay or deal with money.
FinTech has had a large impact on the way in which we, as a customer or user, deal with money. Banks are also undergoing major changes as a result. FinTech is often driven by young start-ups that come up with highly innovative ideas.
For example, Bunq or N26 have become two fully digital banks. These neo-banks are typically more convenient and less costly than traditional banks, which have begun to suffer from the onslaught of competition. Now traditional banks, such as KBC, are trying to modernize their operations and offer their own mobile applications where you can conduct transactions and access your finances 24/7.
Plastic as an argument for changing to contactless payments
Every year, some 12.7 million tonnes of plastic waste disappear into our oceans. This has catastrophic consequences for the environment and marine life. Plastic credit cards contribute to part of the pollution. At the moment, bank cards are replaced every few years. You throw your old one in the bin and there you have the new one. So it’s not very environmentally friendly.
In the meantime, payments with smartphones are taking over. The days of credit cards seem to be numbered. With the arrival of PayPal, Apple Pay, Android Pay or Payconiq, we are paying more and more with our smartphones. According to a study by Juniper, 90% of Europeans still prefer contactless payment with card over a digital wallet. That’s in part because banks themselves continue to promote the use of a card.
Radical approach for Apple or Payconiq
Apple or Payconiq are two fine examples of organizations that take a radically different approach. Apple has the advantage of offering both hardware and software and can thus build an ecosystem around one device: the iPhone. With Apple Pay, users can already pay at any ATM or in webshops. Startup developers are busy creating new payment apps and companies like Google, Amazon, and Bunq are interested in these disruptive technologies. The development of a solid ICT infrastructure contributes to the integration of a good digital platform for payments. And there is where Payconiq intervenes.
Payconiq is the Belgian banking sector’s answer to these FinTech startups. A collaboration between the largest banks led to a platform for iOS and Android that allows everyone to easily link their bank account. Payconiq was promoted to small entrepreneurs but is now also expanding into online webshops and wants to break through throughout Europe. The banking sector can, therefore, learn a lot from FinTech. Unfortunately, platforms like Payconiq or Apple Pay are too often used as an addition to regular bank card.
The security problem presented by contactless payments
Both contactless payments and payments with a smartphone or smartwatch have one big dilemma: security. We often read stories of people who have been robbed by criminals who can use special devices to simply withdraw money from a contactless card. Fortunately, these situations rarely occur and the reports are often not even correct. Yet safety is a valid concern to think about. Our smartphones now have at least one way to store biometric data. These can be facial recognition or fingerprint recognition. These biometric data represent a new challenge for making payments secure. They also make you vulnerable to people with bad intentions.
FinTech start-ups, therefore, face three major challenges: data protection, cybersecurity, and competition. In terms of competition, there are already many players on the market. However, FinTech is not a new phenomenon. Since the last banking crisis and the collapse of many large banks, innovative organizations have been trying to avoid a crisis of that magnitude. Cybersecurity and data protection are the most important factors that companies and users should take into account. Banks like Bunq or Monzo that do internet banking, use the cloud as a way to offer their payment applications on a cross-platform basis. These applications must be safe enough to persuade people and get them into the digital payment story.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in TECH PULSE PREMIUM, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Angola might devalue the kwanza, as the country’s economy is threatened
Angola’s central bank governor said that the national currency, the kwanza, registered a 10% depreciation, from January to the current...
Real estate is at risk because of the exogenous crisis caused by COVID-19
Participatory real estate investment has not escaped the economic and health crisis. However, the consequences will not be the same...
The coronavirus has caused a rise in cannabis prices
According to a report published last year by the National Drug Plan, one in ten Spanish adults use hashish or...
Bitcoin hash rate is slumping due to uncertainty
While the Bitcoin price started to slowly increase again, the BTC hash rate is plummeting. According to blockchain.com, the maximum...
Italian biotech companies entered the race to find a vaccine against COVID-19
Several Italian biotech companies, such as Irbim, ReiThera and Takis, have entered the international race to develop a vaccine that...
- Business7 days ago
Unicorn or not: why the post Coronavirus startup scene will require a “New Startup Deal”
- Featured6 days ago
Fintech is the bet of bankarization in the digital era
- Crypto5 days ago
Could the sale of $11.3 million XRP by MoneyGram affect the Ripple Hodler?
- Biotech4 days ago
Hemarina offers its oxygen carrier molecule to fight the COVID-19 pandemic