Types of fintech and fintech products
Fintech covers a wide range of use cases across business-to-business (B2B), business-to-consumer (B2C), and peer-to-peer (P2P) markets. The following are just some examples of the types of fintech companies and products that are changing the financial services industry.
Fintech banks
One of the most central components of the financial system, banking services have been shaken up by the fintech industry. Things like account opening and funding as well as a reduction in fraudulent sign-ups are now quick and easy thanks to technology like Plaid’s own Auth and Identity Verification, respectively. In turn, neobanks like Varo offer flexible personal checking accounts, high-yield saving accounts, and even secured credit cards—all without the traditional fees that can hinder people from achieving their financial goals.
For more information on fintech banks (aka neobanks), check out our in-depth article on neobanks.
Digital payments
Cashless payments are on the rise. Since the onset of the pandemic, cashless payments have made huge jumps, with 41% of Americans saying all their payments in a week are digital, up from 29% in 2018. In tandem, payment apps and services have become more and more common. That’s because receiving payments via direct bank transfer is significantly less expensive than using credit cards, and getting users signed up and authenticated has become faster and easier.
In the United States, Plaid allows consumers to instantly connect their bank account to an app or service to carry out digital payments (Shift, for example, aims to take the hassle out of buying a used car) via the ACH network. On the B2B side, apps like Wave help businesses pay bills, do bookkeeping, and send payroll—also digitally and via ACH.
→ Looking to streamline payments for both ACH and real-time payment rails? Plaid Transfer authorizes customers, analyzes risk, and moves money with one single integration.
Personal financial management (PFM)
PFM apps help users consolidate financial information from various accounts into a single dashboard, making it easier to stay up-to-date with their finances. These services help people to manage, budget, and make sense of their money. Examples include Dave and Brigit.
Another leading PFM app, Copilot, helps its users build an accurate picture of their financial health and net worth. Watch the video below to see how Copilot uses Plaid to help its customers get a holistic view of their finances.
