By Nestor Gilbert
Fintechs Report Growth During COVID-19
Despite the chaos and uncertainties that COVID-19 brought upon economies worldwide, fintechs across the globe reported growth on average in Q1 and Q2 2020 (University of Cambridge, 2020). Though this growth was not the same for all regions. and markets, the industry as a whole was quick to respond to the challenges of the pandemic by tweaking their products and services or adding new ones based on ongoing market conditions.However, fintechs still contend with significant headwinds in operations, fundraising, and regulatory challenges across the world. For example, before the pandemic happened, fintech startups were already having difficulties in funding as many investors chose to prioritize fintech with an established and clear business model (Deloitte, 2020). There are also interest cuts and the global slowdown of economies that fintechs need to face.
On the upside, experts believe that the fintech industry will be able to take advantage of new opportunities created by the COVID-19 crisis. The continued social distancing requirements, for instance, are pushing the need for digital payments. Digital wallets are booming with nations in a virtual scramble to set national standards.
When the pandemic began, the usage of digital wallets surged to 83% and pundits project the industry will be worth over $10 trillion a year by 2025 (TelecomTV, 2021). Moreover, 2020 saw over 779 billion digital transactions worldwide, which is expected to grow 13% in the coming years and making cash payments the least common payment method by 2022 (Capital On Tap, 2020).
