Part 2 — Of Ubers And Fintechs

Over the past six years in the US, as the head of fintech sales for IDEMIA, I have had the chance to work with all market leaders including Square, Stripe, Robinhood, Marqeta, SoFi, Galileo, Varo and more than fifty others. Now back to Europe, I want to share in this series of posts my experience living the birth of this wonderful fintech industry.

A good model for the evolution of fintechs is Uber. The taxi industry existed, was well established and innovated little. Protected industry, the very mediocre level of customer satisfaction did not seem to pose a problem to anyone… the very significant levels of investment required to play in this market (purchase of a full fleet of taxis and associated licenses) seemed to protect them from any serious alternative.

Enters Uber, propelled by $2 billion in venture capital and by major technological innovations (the iPhone and its apps arrive in 2007, GPS becomes widespread at the same time). The result is well known, in less than four years Uber and its followers seized 72% of the market plunging the taxi industry into a fatal crisis on a global level. Let’s note immediately an important difference, the taxi sector is regulated but not as much as the financial services and Uber’s strategy of putting the authorities in front of the fait accompli (better to ask for forgiveness than permission) does not work for fintechs, as Prosper or Robinhood were able to experience it.

Fintechs have received over $40B in funding over the past year

But for the rest, the parallel works perfectly: the fintech sector has benefited from massive financing (more than $40 billion over the last 12 months despite the current crisis), and from innovation: apps of course, open banking, cryptocurrencies, cloud computing and increasingly artificial intelligence.

Faced with fintechs, we are also witnessing defensive mergers of the major players in payment: Fiserv / First Data, FIS / Worldpay, TSYS / Global Payments and it escapes no one that these Goliaths ally themselves to face the fintech Davids offensive [1].

Let’s summarize: In the United States, fintechs are popular with customers and investors, and it’s all happening today.

The fintech revolution is not yet to come: it is in full swing!

But how do US fintechs succeed? What specific culture have they developed? I will share my personal experience on these topics in the next post.

— All opinions shared in these posts are my own —

• [1] Bloomberg, A $22 Billion Fintech Tie-Up Aims at Square, The merger of Fiserv and First Data creates a formidable competitor in the fast-growing payments-processing business, Tara Lachapelle, Jan. 16, 2019