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Vendors looking for Fintech solutions driving innovation

It seems that what is driving true innovation within the fintech community is not simply the jovial step of progress, as certain parties would put it, but rather the basics concepts of economic theory. There are many vendors working across the internet, all of whom provide diverse services, with users who have diverse needs in terms of what they want to receive and how they want to pay for them. As a result, vendors relatively controversial services all are constantly on the lookout for alternative payment systems. This constant presence of a demand for a payment system that can satisfy the needs of a specific type of customer is driving the innovation that we are seeing accelerated day-to-day. 

Vendors of all kinds

The beauty of the age of the internet is the fact that anything that a heart can desire, can easily be accessed through either a mobile device or a desktop computer. The issue with this is that while there is always a client, there is not always a way for the client to make a payment to the vendor in a way that makes sense for the client. In order to maximize customer interaction and satisfaction, the vendors are always looking for new platforms. The demands of each client are different, but there is a general sense of prioritization for some specific qualities for all payment systems. These include: 

  • Privacy

  • Security

  • Short transaction times

  • Low fees

  • Digital access

  • Cards

 

Each quality has a specific reason to it. “Companies like Playamo Canada runs a service that might not be as palatable to some users as others, which is why some prioritize privacy in their transactions, while others are looking for things such as low fees,'' says one of the representatives of the company. This is why they want to be able to offer payment systems that are able to accommodate the needs of all users. The same goes for companies that provide their services all across the world. Whether these are websites like pornhub or even Amazon, the ability to provide several payment methods is paramount to acquiring a recurring client. 

The number of qualities that vendors are looking for is thus high, and not all platforms are able to satisfy them. Although, there are companies looking to satisfy as many needs as possible, which is where most of the innovation within the Fintech industry is coming from. The desire to become “the one solution for all” is becoming the main fuel for the FinTech industry. Many companies and startups looking to fill the gap of the one company that can handle it all, but the possibility of achieving that is pretty low. In order to be able to handle that much responsibility. In a sense, it would result in the monopolization of the market, which would be extremely dangerous to the overall livelihood of the markets. 

Cryptocurrency, digital payment platforms keep the market healthy

And really, there is little need to find that one company fits all product, that so many are trying to create. While it might be a little hard for many vendors to cooperate with several payment system providers, and it can be quite expensive as well, it provides the market with a certain sense of competition that would not be possible if there was only one provider on the market. While vendors might want something that would be cheaper for them overall, the fact that there are a number of providers on the market keeps the market healthy and operating the way it is. In a way, it is also driving further innovation with each type of payment system by creating a higher rate of specialization within one field of the industry.

So, as a result, the current Fintech development industry is built out of a slew of different payment system providers. This includes cryptocurrencies, PayPal, Zillow, some new online banks and a long list of others. Their presence allows each to increase their ability within the industry and build better products. Simply looking at the cryptocurrency industry, it is easy to see how diverse the product has become and how many different companies are providing a high quality product to those who are looking for it, with baselines qualities of security and speed being pretty much the same, but with each having a variety of qualities that make it more desired than the rest by a certain subset of consumers. 

The very same is true for digital payment platforms. While PayPal might have been the only platform allowing this kind of service, now there are at least a dozen companies offering a service that is pretty much the same. Each company tries to differentiate itself with a relatively unique service, fees and some are even offering their own cards, with competition driving further innovation. 

Demand drives innovation

In the end, the most important thing to remember about the current Fintech industry is that the creation of a single solution for all would be the death of it. If a company was able to offer everything that a client might want (which is pretty much impossible) it would quickly result in the monopolization of the markets, killing the high rate of innovation that is seen in the industry today. But, beyond that, it is also pretty much impossible to achieve this level of flexibility in terms of the Fintech product. There are certain drawbacks to all platforms, and that is inherent within the financial system as well. Getting away from these drawbacks would be impossible, so pursuing the need for such a creation would be pointless. Instead, it would be advisable for each company within the industry to pursue the goal of bettering the specifics of the service that they provide and which is demanded of them. Excelling in their strong points is what will create a high demand for their product and give them the chance to create something that the world has never seen before. 

 

 

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Konstantin Rabin

Konstantin Rabin

Head of Marketing

Kontomatik

Member since

18 Aug 2015

Location

Warsaw

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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