March 30, 2020
The coronavirus outbreak has impacted the financial markets, the consumers, and the businesses globally. Coronavirus has been declared as a global pandemic by the World Health Organization, and due to the nature of how the virus spreads, governments have moved quickly, placing restrictions on the way people work, travel, and shop. What does this mean for the FinTech industry? To answer this question, we will have to gauge the impact of coronavirus on four FinTech segments: Payments, Lending, WealthTech, and InsurTech.
In the payments segment, the companies that deal with POS machines/transactions have had a negative impact as retail stores across the globe are shutting down (if they haven’t already) to prevent the further spread of the virus on top of people self-quarantining themselves. Pine Labs’ CEO, Amrish Rau, noted that their transactions decreased by 40% a few days ago. This also could be witnessed by the decrease in the M-o-M market cap of large payment processors such as Mastercard with a decline of 25% and Visa with a decline of 20% in market cap. Additionally, due to the travel restraints, the digital payments sector has seen a decrease in the number of transactions due to the impact on air travel, hospitality, and retail. In India, companies such as