Seamless transactions, key to fintech success

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Andrea Barnes
Editor
Andrea is Communications Manager at FXcompared. Prior to joining FXcompared, she worked as a communications consultant for companies seeking guidance with their social media, marketing and digital… Read more
  • ONPEX CEO Christoph Tusch says that the collaboration between a fintech and a bank involves complex integrations
  • Payment processing fintechs are set to improve customer experience
  • Fintechs will be facing regulatory pressures in 2019, according to experts

 

As leaders in the payments industry asses their companies’ performance in 2018, some have noted the need for seamless transactions in order for fintechs to achieve a bigger share of the market.

In 2017, firms noted that collaboration between brick and mortar banks and neo banks was needed so that more people around the world could transfer money internationally in a more convenient manner. Based on reports throughout 2018, this recommendation was acted upon in different corners of the globe. Fintechs partnered with various banks, while those who already had a lot of partners expanded their networks. In many ways, the industry addressed the need for better access to financial services especially in emerging economies. However, for millions of migrants who now use mobile-based apps to send money home, something more important was provided — better overseas transfer rates. Expensive money transfer services has been highlighted by the UN as a huge problem for migrants, especially for those whose wages are low.

For the coming year, fintechs are said to be getting ready to make transactions more seamless by addressing what PYMNTS refer to as “the biggest pain points” of the current banking system, which include the period it takes for transactions to go through and actually settle as well as transparency while the funds are being moved.

More challenges lie ahead, according to experts, as regulatory pressures continue to discourage brick and mortar banks from collaborating with fintech firms. However, the Bank of Canada, the Bank of England, and the Monetary Authority of Singapore have highlighted the role of collaboration in maintaining functionality of cross-border payments services around the world. The report also noted the importance of innovation in the fintech industry.

In November, Victoria Cleland of the Bank of England said: “Many national payment systems are benefitting from considerable innovation and change.”

The CEO of payments specialist ONPEX Christoph Tusch noted that international payments involve more than just the collaboration between fintech firms and banks. He emphasised the importance of the customer experience and that modern day clients expect seamless transactions.

Straightforward solutions are the order of the day, based on Tusch’s statement, especially in a time when clients want all financial services from just one provider. He added that these collaborations require complicated integrations as third party providers are also needed to make them work. This includes exchanges, infrastructure and technical providers, and clearing institutions. These steps should never be felt or noticed by the user though, according to the ONPEX chief.

Many players are involved in moving money across borders and many more are needed to make such transactions seamless. Reasonable speed, affordable rates, security, reliability, and ease of access are the main requirements of users, according to experts, and fintechs need to be able to provide these to get ahead in the game.

Find out more about global fund transfers here.


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