There are new indications the FinTech investment market will grow at a CAGR of over 53% until 2020.
According to the latest research study released by London-based Technavio, the investments made by FinTech start-ups for P2P lending was valued at close to US$6.37 billion in 2015. P2P lending is among the most used models by borrowers, and it includes entities like borrowers, P2P lending platforms, and investors in the market, and offers clear visibility in terms of the level of risk attached to the investments.
A successful P2P lender or marketplace lender will bring greater innovation into the FinTech investment market during the forecast period by leveraging big data analytics. Harnessing big data analytics will likely play a key role in improving analysis and management of loans over the next four years.
The investments made by FinTech start-ups for online acquiring and mobile wallet was valued at US$5.95 billion in 2015. Internet acquiring is implemented by payment-processing clearinghouse, and is used to process cash transactions online. During an Internet acquisition, the cardholder does not need to sign on any document to complete the transaction. The money is reimbursed within 180 days in case payment is canceled by the cardholder.
Participants in online acquiring are as follows:
• Buyer (holder of card)
• Issuing bank (card-issuing bank)
• Acquiring bank (bank servicing payments)
• Payment system (Europay, MasterCard, Visa)
The investments made by FinTech start-ups for personal finance management or private financial planning was valued at close to US$3.36 billion in 2015.
Traditional financial institutions like banks are collaborating with the FinTech companies, and this trend is expected to aid FinTech companies to promote their solutions through alternative routes, such as banks. For instance, MarketInvoice, which is an online invoice financing platform, has partnered with the advisory services domain of KPMG, so that its small business clients can have direct access to the company platform for easy access to working capital.
Market share of FinTech for technology 2015
• P2P lending 26.80%
• Online acquiring and mobile wallets 25%
• Personal finance management/ private financial planning 14.11%
• MSME services 11.52%
• MPOS 7.23%
• Mobile first banking 5.99%
• Crowdfunding 3.60%
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