Why are there so many fintech startups when they all seem to do the exact same thing?

Question

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

Answer 1

All you gotta do to get rich is make a phone app, get everybody to download it, and sell their data. You don’t even need to make money off the app itself, you just need people to use it.

This is also why EVERY company in the history of companies want you to download their app. Your data is free money to them. Just sitting there on your phone waiting for them to take. Everybody wants in. So much so, you’ll find deals that are just too good to be true … You just gotta have the app.

Edit: To be more specific to answering your question: fintech apps are the kind of apps that you use passively, so they’re always running and you’re constantly using them. Even when you’re not playing on your phone, you’re using their app. These fintech apps need to run in the background to give you important notifications about your important moneys. It’s just a passive app format versus an active app where you have to actually open it and be actively using it.