I work in PR and have represented quite a few startup fintech companies. What puzzles me is that there are masses of these companies all around the world, yet they all seem to do the exact same thing (p2p payments, digital wallet stuff, transfer money to a business via an app etc.) They also market themselves in exactly the same way. Yet every day I see yet another utterly generic fintech company raise tens of millions of dollars in a funding round to do what every other app does.
I find this puzzling because surely fintech applications should work like a social network, ie it makes sense for everyone to be on the same application, in the same way Twitter works because lots of people are on Twitter.
I used to live in China and everyone there uses either WeChat Pay or AliPay and that’s it, and it works beautifully because everyone in the entire country is plugged into the same system (in China I could literally text money to my friends to pay them back for getting drinks, as well as pay my electric bills in the same manner). I actually had this conversation with a startup founder (although he works in agritech) and he basically said this to me, so I think I’m onto something.
Any insights you have are appreciated.
In: 1421
Because
* payments processing is worth tens of billions as an industry
* it’s mostly being sat on by a handful of complacent megabanks
* take a peek at how the banks do things… it’s all decades old garbage- batch processing on mainframes, communication by copying flat files. That sort of shit. That’s why bank wires still process overnight. They’re trying to modernize but (as always) they are trying to thread the needle- they don’t want to spend a penny beyond what is absolutely necessary to bring a barely viable product to market just in time to avoid bleeding too many customers to fintechs that have basically implemented their infrastructure with modern technologies.
* so VCs are like “one of these firms will figure it out and take off, we want a piece of whichever one that is”
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