ATMs, Credit Cards, Debit Cards, OTPs, Digital Wallets, Payment Gateways, etc. are all part of the bustling fintech industry. There was a time not long ago when payments through debit and credit cards were considered a novelty.
In 2020, a major portion of the world has already been exposed to Mobile Payments, Digital Wallets, Cryptocurrencies, and Blockchain Technologies. There is no doubt that the Fintech industry is evolving and advancing at breakneck speeds.
In this article, we try to put together some of the major things you need to know about the Fintech sector in 2021.
This article can be very helpful for someone who is researching financial technologies, or a business owner looking to expand the convenience of fintech by offering diversified payment solutions to his or her customers.
Fintech or Financial Technologies: How are they changing our world?
In this section, we are going to list down three core ways, fintech is changing our financial world in general and the global economy in particular.
You have more control over your money-
As an individual who is dependent on his phone for all his payment needs, I can safely attest to the fact that I have more control over my money than ever before. Allocating budgets to savings and investments, buying groceries, sending money to my parents, paying for bills, etc. can all be done through a smartphone. This allows you more control over your finances.
The Remittance Economy is Benefitting Greatly-
According to experts, fintech has made it very easy for people working in other countries to send back the money. They do not need to physically go to banks, cash-out money, go to another payment vendor, add details on a piece of paper, and wait one week for the family to receive the same. All it now takes are clicks on your smartphone and your family will get the money.
Extending Financial Services to the ‘Unbanked’-
According to the latest data figures, around 1.7 billion people in the world still do not have bank accounts. As compared to the setting up and working of traditional banks that require a lot of investments, fintech companies can perform all the traditional banking functions at a fraction of the costs. For example, in Africa, mobile payments have taken off like a storm.
Has the growth in Fintech contributed to Safety in Money Managing?
In the past, a number of financial experts have pointed out the limitations of cash currencies. You can be a victim of counterfeit notes, and having cash on you attracts criminal elements.
With digital payments, there are a number of security layers, which criminals would have to breach in order to get a hold of your money.
To many, this is a rather impossible happening. OTPs, Two-Stage authentications, and password-protected sign-ins prevent anyone who is not the rightful owner of the account from accessing the same.
However, it is important that financial data, which is getting increasingly stored with every transaction you make is securely held by vendors. This is an area of concern, which should be looked upon by developers in the fintech space.
The Future of Fintech in 2021: How Cryptocurrencies and Blockchain will lead the way
The next big leap that the Fintech sector is likely to take is in the area of Cryptocurrencies like Bitcoins and Blockchain technology. With Bitcoins becoming one of the most popular and high returning stores of value, a time will come in the near future, where we would be able to buy a sandwich from our local store with Bitcoin payments.
Blockchain too is looking to revolutionize the way payments systems work. It maintains a record of all transactions and ensures that every transaction is authenticated and authorized. Different industries from healthcare to legal companies are experimenting with Blockchain.
2021 is going to be a watershed year for crypto adoption and Blockchain technology. Fintech companies, especially the start-ups innovating in the space are seeing record inflows of investments, leading them to become unicorns within a couple of years of their start.
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