What Does The Future Hold For Fintech Startups?
There are so many vertical products that we see being built to help industries that have been relatively untouched by technology. Each can be incredibly successful doing one thing well, because the scale is so massive.
It’s hard to remember now, but for a very long time the average web user was hesitant to enter a credit card into a website, and people were nervous about using even established companies like Amazon or eBay. For the first two decades or so of the web, having people pay $20 with a credit card was a challenge, and companies like Stripe, Braintree, and Adyen were built supporting that infrastructure.
Today, most people do not think twice about using Amazon and paying with a credit card. But when you move into industries that rely on ACH, wire, or check, people are still nervous, or confused, about entering their ACH routing details or wire details into a form online. Companies like Plaid help authenticate accounts, but it’s still a bit of a wild idea to fund mortgages over the internet or fund startups online by wiring funds to some website.
That’s changing, but those industries—from insurance to payroll to healthcare to real estate to education—are massive and in need of better user experiences. It’s worth mentioning that the total value transacting through credit cards was around $4 trillion in 2018, and at the same time ACH transfers totaled $64 trillion and checks totaled $25 trillion (according to the Fed). These are enormous industries, and the web is only just starting to affect them.
I think companies addressing narrow use cases but making the most modern, delightful feeling experiences in these old school industries will be massively successful in the next decade.