PayTech Makes Waves Around the Globe

While FinTech describes technology-based innovation in the financial services industry, PayTech narrows in on the technology products and services transforming allthingspayments, both consumer and B2B. Let’s take a look at what’s new in PayTech—and where we’re likely to see exciting new industry developments in the years ahead.

Changing the Payments Game

PayTech encompasses the development of new digital payment processing applications, alternative processing networks, smart devices, wearable technologies, and more. Growth in the space, especially among startups, is being driven by the proliferation in digital connectivity, the increased need for fraud and identity protection, and customer dissatisfaction with banks. There are opportunities around nearly every corner for technology to transform the way—not to mention the when and the where and by whom—people and businesses manage their money and process various payment transactions.

In fact, most of the top-ranked payments companies tend to fall into one of two categories: point-of-sale solutions or secure payment processing. That’s according to CB Insights’ Company Mosaic score, which is used to assess the strength of the world’s leading payments startups. Companies in the top 10 include Square, MobiKwik, Zuora, and WorldRemit, and have total funding from $30M to over $710M. As their solutions continue to gain traction, thanks to investment dollars and consumer awareness, they’ll continue to shake-up the status quo.

Both Fintech: Reinventing the Financial Services Industry and Entrepreneur’s 8 Startups Changing How Payments Work list additional headliners in the PayTech space and provide details into how they’re disrupting the industry.

PayTech Builds Momentum in the UK…

London has become an essential hub for PayTech activity. In their white paper, Investments in PayTech, the UK-based Emerging Payments Association reports on their study of investments in payment technology companies. They found that UK companies are growing at a particularly fast pace. Consider these figures:

• 90% of PayTech start-ups originate in the US or the UK
  • In 2010, 58% of PayTech start-ups were in the US and 12.5% were in the UK
  • In 2014, 61% of PayTech start-ups were in the US and 28% were in the UK
• The UK is now on par with the US in terms of seed funding:
  • In 2014 US seed funding averaged $1.9M compared with $1.8M in the UK
• UK companies are more likely than US companies to remain independent—that is, they’re less likely to try to get acquired by a larger company.

Now for the elephant in the room: What about Brexit? London isn’t necessarily going to lose its standing as a global hotbed for FinTech success as a result of the UK leaving the European Union. But regardless, other countries are eager for a bigger stake in the game.

…and Around the Globe

Don’t count out France as a major player in the space. According to PYMNTS.com’s Why Paris Has A Heart For FinTech, the country is attracting startup investment funds and cultivating a penchant for digital technology. And Germany? Some are asking the question, Could Berlin Steal London’s FinTech Capital Throne?

Here is a round-up of interesting global FinTech/PayTech facts:

• Australia:Kearney’s “Global Cities 2015” report identified Sydney as one of the world’s Top 16 “Global Elite” cities, ranking 15^thin the Global Cities Index and 11^th in the Global Cities Outlook.
• Brazil: Tech giants such as Siemens, Cisco, and Microsoft are building technology centers in the city.
• Canada: Toronto is home to more than 15,000 tech companies, generating CAD$52 billion in revenues annually.
• Israel: Tel Aviv nabbed 5^thplace in the Global Startup Ecosystem Ranking in 2015.
• Singapore: Between 2011 and 2015, the government allocated $16 billion to help accelerate Singapore’s research, innovation, and enterprise landscape.
• Sweden: The positions of programmer and systems developer top the list of the most common roles in Stockholm.

For more facts and figures, read Around The World In FinTech Innovation on PYMNTS.com.

Priorities in the U.S. Revealed

Aside from startup businesses, industry incumbents with a hand in the payments game are exploring different ways to meet changing needs and preferences in the marketplace. That could mean investing in the development of new solutions or partnering with other players to bring innovative products and services to customers.

Whatever their particular strategy, a number of US CFOs discussed their FinTech investment priorities at The Wall Street Journal’s 2016 CFO Network conference. They recommend that every CFO should:

1. Deploy technology for business intelligence
2. Use cloud solutions to streamline workflow
3. Have a FinTech strategy to leverage evolving technologies
4. Improve B2B payments and pricing

Making waves in payments processing is clearly on the agenda—and every stakeholder will be keeping an eye on the ROI. For deeper insights into changes and trends, read What to Know about Money and Payments in 2020 and “Innovation Labs” Spark Financial Services Industry Inspiration.