How Nimble Fintech Startups are Giving a Hard Time to Banks & Networks

Banks and networks seem genuinely concerned these days around the fintech startups that are coming up in the payments space. These startups are creating solutions that are directly attacking the core services of the traditional incumbents, and are offering lucrative alternatives. Let me highlight examples of two core services that banks provide: Remittance and Lending.

The global remittance business is $500+ billion strong. Numerous stakeholders are involved in this business including banks, money transfer operators and even third party players such as mobile operators. Online transaction fees of 5-6%, expected to come further down to 3-4% with mobile payments, are currently 10-11% in the cash-to-cash remittance method. This cost benefit is driving the migrant population to adopt new technology thus avoiding the inconvenience of physically going to the traditional brick and mortar outlet. Banks have not been able to come up with such cost benefits and several banks across certa ...

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