For a long time, financial technology (fintech) has been its own vertical supporting the financial services industry. However, fintech companies are disrupting this space and making fintech a necessity not just for financial institutions, but for any company, in any industry. Angela Strange with a16z said, “In the not-too-distant future, I believe nearly every company will derive a significant portion of its revenue from financial services.” and we couldn’t agree more (and we highly recommend reading her post or watching her video!).
Examples of Fintech Adding Value
Fintech is disrupting business as we know it today, in a variety of ways. Below are just a few examples of where fintech companies have added value to organizations that are not in the financial services industry.
Amazon Pay – Amazon first got into the payment space in 2007, the same year they acquired SMS payment service, TextPayMe. This initial payment product, Pay with Amazon, is now known as Amazon Pay, which is an online payment service that provides Amazon customers the option to pay with their Amazon account or on external merchant websites. Amazon Pay has reported more than 300M customers in 170 countries, and they have issued more than $3 billion in merchant cash advances in the past few years.
Lyft Direct – Lyft has partnered with Mastercard to offer Lyft Direct, which is a debit card and bank account that enables Lyft drivers to get paid instantly. The debit cards and bank accounts are issued by Stride Bank and is powered by Payfare. The debit card offers cash back and rebates on gas, groceries, car related driving costs, and other things.
In Lyft’s Q4 2019 Earnings Call, John Zimmer, President and Co-Founder said, “This quarter we made significant progress on Lyft Direct, our fee-free bank account and debit card for drivers. Launched last May, Lyft Direct has now been rolled out to all US markets. In addition to delivering more value to drivers, this program has led to improved driver engagement in our marketplace.”
Uber Money – Similar to Lyft, on October 28, 2019, Uber announced Uber Money, a dedicated business unit within Uber focused on delivering financial products and services for the Uber community. Uber Money offers:
- Real-time Payments – drivers have access to their money, instantly.
- Uber Debit & Credit Cards – Uber customers get cashback on spending on the Uber platform (ie rides, Uber eats). As we mentioned in our BaaS to the Future: The Rise of Banking-as-a-Service Report, Uber has partnered with Green Dot to issue the cards.
- Uber Wallet – which will allow Uber earners to manage and move their money in one place.
Why is this so important for Uber? Because it enables them to become the Uber driver’s bank. This is powerful because, as Ron Shevlin stated, it helps Uber to capitalize on two trends:
- The gig economy – nearly 40% of Americans make at least 40% of their income from side gigs.
- The emergence of headless banking – banking applications embedded into consumer-facing or internal banking systems.
Wayfair – Klarna, the leading global disruptor of payments and banking and provider of smooth retail experiences, has partnered with Wayfair to provide Wayfair customers in the UK with more payment options. These flexible payment options allow consumers to pay now, pay later, or pay in three equal installments – with no interest or fees. Wayfair also partnered with Comenity to offer their own credit card which offers rewards when purchasing products from Wayfair.
In 2016, Wayfair’s online sales jumped 60% thanks largely in part to their private-label credit card.
Alibaba – Alibaba has partnered with Ant Financial, formerly known as Alipay, which is an affiliate of Alibaba Group, as well as the Industrial and Commercial Bank of China (ICBC). Ant Financial is the highest valued fintech company in the world with a valuation of $150 billion and ICBC is the world’s largest bank by asset size. These companies plan to focus on “….improving the quality of fintech offerings by using smart technologies and product innovation. To take financial services forward, the partners will use their collective experience and expertise to focus on areas that include electronic payment settlement, cross-border finance, and scenario-based financial services.”
Fintech Made Easy
Building any type of fintech product or component is extremely complex. The partnerships mentioned above didn’t happen overnight. These relationships take countless hours to forge, not to mention the integrations, workflows, and business logic, among many other things, required to pull it off.
Hydrogen makes this complex process easy. With our no code fintech solution, organizations of any size can quickly create digital financial products or components. We are able to do this with our pre-built no code offering built on top of our powerful, award-winning API platform.
These white labels include easy to configure UIs, pre-built third-party integrations, business logic, and workflows already packaged up and ready for you to use.
Want to try it out for yourself? Start building today with our SaaS fintech offering.