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
Sure, it could be a better user experience if every fintech consolidated into a single company.
However, every company wants to be that “one company” winner. Hence, many companies spring up doing similar things – and until one company dominates every facet of the market, there will always be room for new competitors to take a piece of the pie. And sure, a fragmented market means more apps and a less coherent user experience, but it also drives prices down – which is good for users.
This is basically just capitalism, it’s not necessarily unique to fintechs.
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