What Is Fintech?

Bitcoin and other digital currencies are concepts difficult to grasp by the everyday consumer and merchant, just because they do not see the value or need for these types of services. It is important to remember Bitcoin is as much a part of the Fintech revolution just like any other disruptive form of transferring value. But what is this Fintech movement anyway, and why should we care about it?

Also read: How to become a Bitcoin miner

The Concept of Fintech Should Matter To All of Us

Regardless of whether one runs a business or is just a consumer looking for alternative ways to spend money in a convenient way, the Fintech industry will be of great interest and value to you. While there may be nothing wrong with the financial service we use this very day – according to a lot of people – there is a lot of room for improvement.

As a business owner, one may have noticed how there are a lot of costs associated with the way payments are accepted. Cash payments are the cheapest way to receive payments, yet they also pose additional risks regarding people trying to rob the store. Additionally, a lot of people are getting fed up with using cash, as it is a very clumsy payment method to say the last.

Credit, debit, and bank cards, on the other hand, let consumers pay the exact amount they owe, without dealing with change or cash. Unfortunately, accepting card payments can be rather expensive, with fees ranging anywhere from one to 3.5% per transaction. Do keep in mind the company used for processing card payments may – and usually will – charge an additional fee on top of that amount.

This is where the Fintech industry comes into the picture, as this collaborative effort between entrepreneurs and startups around the world wants to bring additional payment solutions to consumers and businesses. Mobile payments, which are slowly becoming the new norm in some countries, are just one example of how the Fintech industry is changing the way we think about payments and dealing with money.

But there is much more to Fintech than just looking at using devices we already own. Contactless payments, which are a lot more convenient for consumers but not necessarily for business owners, are one of the main points of focus right now. Users can complete contactless payments on a mobile device, their bank card – if it has NFC capabilities – and perhaps even wearables in the future.

However, Fintech should revolve around creating additional payment methods and financial infrastructure. Most companies still rely on the legacy system to provide services to the general public, whereas initiatives as Bitcoin and digital currency operate beyond the borders of traditional finance.

In the end, there are multiple solutions that will change the way we pay. A lot of consumers and businesses are not looking for alternative ways to pay or manage their finances just yet, but those who do are ahead of the curve. Innovation is coming to the financial sector, whether people want it or not, and it never hurts to be prepared for what is inevitable.

If you want us to discuss some of the Fintech innovations in future articles, let us know in the comments below!

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