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Industry insights

Now is the time for a fintech reset

- 4 minute read

At Edenred Payment Solutions, we think a partnership approach to fintech entrepreneurship, combined with a culture of ‘do what you do best and outsource the rest’, can​ spark an industry reset that will help businesses emerge stronger from a challenging investment environment.

  • The challenges driving a strategy re-think
  • The benefits of a partnership approach
  • Finding your perfect partner

Projections show the fintech industry growing at a compound annual growth rate of more than 22% a year, surging from $11.8 billion in 2018 to around $306 billion in this year. But despite this growth, fintechs are struggling against valuation declines in both public and private markets, a dramatic spike in interest rates, rising inflation, and ongoing macroeconomic uncertainty. 

Unfortunately, the days of unrestrained capital spending are behind us, which means now’s the perfect time to hit the reset button.


The challenges driving a strategy re-think

Raising venture capital is key to startup success, but with fierce competition and investors who are attentive to financial benefits, getting them on board has never been more challenging.

Add to this the stiff competition from financial powerhouses like PayPal and tech giants like Amazon, and the pressure from often-overwhelming standards including GDPR, GLBA, the Wiretap Act, the Money Laundering Control Act, and it’s easy to see how so many fintechs fall at the first hurdle.

In fact, as reported in The Wall Street Journal, up to 75% of fintech startups fail even after they secure VC backing.

Considering the ongoing volatility and tough economic conditions, it’s never been more important to present potential investors with compelling business strategies to receive funding support in 2023. Key to this is finding the right partners who can help them grow their product offerings without straying outside existing regulatory frameworks.


The benefits of a partnership approach

While young fintechs often start out with big plans to single-handedly take on traditional payments networks, collaborating with partners that can help them scale is a proven and effective strategy. It’s one that’s being recognised by traditional banks as well, with almost 90% of financial institutions considering fintech partnerships to be very important to their business, up from less than half (49%) in 2019.

We’re great believers in a partnership approach, and work closely with both start-ups and established businesses who need a reliable and flexible partner to embed seamless payment solutions.

Our partnership with ekko is a great example of this in action. Ekko offers embedded sustainability for the digital economy with award-winning technology that combines real-time carbon tracking, carbon offsetting, reforestation, and plastic waste removal with banking and payment services into one multichannel solution. With our help, ekko has been able to provide customers with a virtual and physical Mastercard debit card, and expand its service to employers, banks, and payment providers around the world.


Finding your perfect partner

Partnerships like this between an innovative fintech and an established brand can dramatically reduce time to market and result in cost efficiencies across the value chain. At a time when inflation is higher than it’s been in decades, these efficiencies are an important consideration for businesses in 2023.

The fintech industry is up against so many challenges, and a partnership approach is one of the best ways to overcome them, but organizations can thrive or fail depending on the partners they choose. It’s so important to team up with a reputable vendor because delivery to market, customer service, and the quality of your offering depend so heavily upon them. 

Edenred Payment Solutions can provide fintechs with upgrades, improvements and access to emerging technologies to ensure they stay one step ahead of the competition. If you focus on what you do best and outsource the rest, you can gain access to the payments expertise you need while focusing your attention on growing your fintech business.

To find out more about how Edenred Payment Solutions can help your business thrive, get in touch with our team of experts today.

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