Fintech: Definition & Top Fintech Products Reviewed for 2023
If you’re interested in digital payments, blockchain, cryptocurrencies, and anything related to financial services done through mobile phones, computers, or any other means of technology, you’ve likely come across the word fintech at least once.
Yes, in today’s world of quick development, it can be challenging to keep up with everything that people invent and develop. But if you want to be wise, you should get into fintech immediately.
Fintech has been on the rise over the past couple of years and has seen tremendous growth, with millions, if not billions, of people using its services. According to some studies, it is now one of the most widely used technologies globally, coming second only to the internet but ranking above social media.
So, what is it about fintech that has created such a buzz with many people and is yet so underexplored? That’s exactly what we are here to find out! In today’s guide, we will tell you everything you need to know about fintech – from what it is, what it is used for, what are some of the common fintech products, and what are some famous companies based on fintech.
So, if you are interested in learning more about the topic, we suggest you stick around till the end of the guide!
What Is Fintech?
If you have never encountered the word fintech before, it’s understandable that you might not know what it is all about. This word is actually short for financial technology. It refers to everything we do to step away from traditional ways of handling finances and the innovation in financial technology that has happened over the past years.
Most of the things we use today to manage our finances are a part of fintech – from the mobile banking apps we use to manage our budget to the digital payment methods we use to pay at a store or make an online purchase. Everything falls under the umbrella term of fintech, and many financial products have been developed recently as part of fintech companies and startups.
Nowadays, fintech is used more than everything in our lives, which is why this market has seen tremendous growth. If you have ever been interested in providing financial services through technology, it’s the best time to start your fintech company and develop the idea further. Who knows, you may create the next Coinbase or PayPal and end up all over the headlines!
What Is Fintech Used For?
The fintech industry has grown so much that it currently has uses in almost all aspects of life that involve finances. From investments and research to financial advice, there are many things that you can do with the help of fintech products, apps, websites, and other platforms.
It’s fascinating to see how a simple trip to the bank or a talk with a financial manager has changed. These things no longer involve an actual trip to the bank – it can just as easily be done online.
This is undoubtedly a sign of how much the world is changing and evolving while also demonstrating what people can come up with to make everyone’s life easier. If you also want to make your life easier, here is what you can start using fintech for:
The first and most important thing you can do using fintech products is make online payments. Whether it’s at an online store or otherwise, you can easily download an e-wallet app on your phone, connect it to your existing bank account, and transfer funds in mere seconds.
Banks sometimes have their own apps that you can download and use to make direct payments, which are faster and more secure, as banks always use top-notch security protocols.
A blockchain is a chain or database made out of blocks containing essential data. Each block has important information on a transaction that has already happened, storing all available data, including timestamps, locations, etc.
So, businesses need to incorporate a blockchain to protect user information and prevent, or at least reduce, the possibility of fraud. There are special fintech categories that deal with this, so you can look into it if it sounds interesting.
Fintech products are also sometimes used for research. For example, if you’ve ever looked into this industry, you may have seen that it also encompasses investment or trading opportunities.
Using fintech products, you can research investment or trading opportunities, make a deal happen, and then look into your existing funds while managing all the existing investments. But the focus for now is on the research – more on the investments later!
One of the most common uses of fintech products involves exchanging funds between two parties. The parties can be two businesses, a business and a consumer, or two peers.
This means that fintech also has uses in B2B, B2C, and P2P markets, all of which are quite popular nowadays. All types of exchanges can be made using these products, but it all comes down to the possibilities of the specific product you are using.
Fintech is also used for wealth management and investment opportunities. You can easily find fintech products that help you think about your best investment opportunities while also researching the market for you.
Then, you can use your wealth management platform to determine how much of your funds is wise to use on a new investment. Everything involved in investing or trading can nowadays be done using digital technology (i.e. fintech products), so people should take advantage of the opportunity.
Recently, fintech products have also started connecting with the insurance industry. Since so many fintech products deal with funds, transactions, or digital banks, it’s wise to have some kind of insurance or safety net when making the transactions.
Many insurance companies have decided to become a part of this fintech market, allowing people to take out insurance policies and be more secure. The same goes for money transactions, claim processing, and policy management.
Crowdfunding is also quite popular and used by most startups and businesses nowadays. So, imagine you have to start your business and find investors. Instead of going through the tedious process of having to research who and what might want to invest in your company, you can instead use crowdfunding and easily connect to like-minded people.
They can help you get your business to take off without much worry, so it is the perfect option for everyone looking to start a new business.
Traditional banks are no longer the go-to option for many people, especially following the coronavirus pandemic. No one has time to go to the bank only to check their balance, which is where fintech products come in. Many banks have created their apps and platforms to allow people easy access to all the information they need about their bank accounts. With a few clicks, you can download a banking API or an app and make any transaction.
Fintech products are also closely connected to digital money, but not only that – cryptocurrencies as well. Everything that involves digital money can be managed using some kind of fintech product – transactions, managing, checking, investments, etc. You get easy access to your “virtual money” and choose how to spend it in real-time, which is terrific if you ask us!
Common Fintech Products
There are various uses for fintech, mainly in the area of finances but also in investment, trading, insurance, etc. Ever since the development of this type of financial activities, there have also been many fintech products developed to help manage and do the activities.
Some are more popular than others, so we have decided to expand only on six of the most widely used fintech products that you should look into if you are interested in this topic:
Various fintech banks operate solely online. There is no need for a physical location because the online platform has all the features you would ever need from a bank. While these can be mobile banks, some are also available in website versions and can be accessed through various devices.
Take Payoneer as an example. This virtual bank functions online, allowing people access to their accounts through a website or a dedicated app. You can receive money or use the same account to send money to other accounts to request a transaction.
You can manage your funds, choose between several currencies, and do everything else you would ever need to do in a bank. This makes this virtual bank much more convenient than a traditional one.
Some fintech products specialize in digital payments. There are three types of digital payments you can do using a fintech product: You can create a mobile wallet where you can receive or make payments; you can create a cryptocurrency wallet where you can buy or sell crypto; or you can make regular payments and transactions to peers, customers, or businesses.
Sometimes, you can get an all-in-one digital platform that you can use for all of the above.
Mobile wallets are very popular nowadays, while some top options are Skrill, Neteller, Interac, Much Better, and PayPal. Crypto wallets are also an excellent option for those willing to deal with these digital currencies, while Binance and Coinbase are the top two options among cryptocurrency users.
Embedded finance is also something to look into, especially if you are a business owner hoping to make things easier for your customers and perhaps use that to attract new customers. Embedded finance means putting a financial touch on something that otherwise has nothing to do with finances.
For example, if you have a donut shop, you can add the option for customers to make 1-click payments. They will certainly think it is cool and saves them time and effort, so why not try and incorporate more such financial products into your business?!
Personal Financial Manager
Financial services dealing with management and advice can also be connected to fintech products. For example, you can easily develop a robot or AI service that uses the existing expenses on a customer’s bank account to develop a plan for how to best use their existing finances or save more money.
The possibilities are endless here, as there will always be people who need financial advice to help prevent overspending. Similarly, these products can help those who have already invested in something manage the risks that come with their investments.
Wealth management functions similarly to the above-mentioned personal financial management. With this option, you get a fintech product that helps you determine how you can best use your wealth. If you plan to save it up, it is your choice, and you are well within your rights.
But if you want to invest it into something, you can use the products to find the best opportunities for new investments. Furthermore, the fintech products can prove helpful in managing existing investments and making a long-term plan on how to make the best out of your money.
Finally, we have the fintech lender, one of the most essential fintech products ever developed. Loans are, by definition, risky, so much thought needs to go into whether to lend someone the money. But if you have a product that can do that, you will finish the work in minutes and make a wise, more educated decision.
With these lender products, you can easily look into someone’s earnings and expenses and tell whether they would be able to return a particular loan while also determining how much per month or year they could return. Furthermore, you can use these products to determine whether you are a good candidate for a specific loan if you feel like you are being biased about the decision.
Top Fintech Companies
As expected with the popularity of fintech, many successful fintech companies have started working over the past few years. Some have products only available in the U.S., whereas others have grown into global sensations. Here, we will look into the most successful fintech companies you should know about. Look into their business plans and follow in their footsteps if you want to set yourself up for success. With that being said, let’s get right into the list:
Stripe is a platform used for payment processing. Everything that happens on the platform happens online, so there are no physical locations you can visit to inquire about this company or its services. Some of the services currently offered by Stripe include payments, checkouts, customizable payment UIs, no-code payments, fraud and risk management, payment for platforms, billing, invoicing, in-person payments, financial connections, etc.
There are special features for enterprises and individuals. But the best part of Stripe’s services is that they are helpful for various businesses, from retail stores to B2B and B2C marketplaces, fundraisers, e-commerce sites, and what else not. If you want to learn more about this platform or any of its services, there is a 24/7 customer support live chat on the official website that you can contact with your inquiry.
PayPal was once nothing more than an online platform a person could use to make online transactions. Nowadays, this legitimate payment method comes with its own debit card and credit card readers, proving how much improvement is possible in the field of fintech products and companies.
PayPal is now one of the most recognizable names in online payments. If you try making an account, whether personal or business, you will see it only takes a few seconds, but the account provides you with various benefits.
Once you have the account, you can make transactions without any added fees. The only fee you must pay comes if you use the option for instant transfers, but it is totally worth it since you can transfer money in only a few seconds.
Coinbase is a platform that functions as an online wallet for cryptocurrencies. You can use it to purchase or sell cryptocurrencies and use it simply for storage. It supports almost all popular cryptocurrencies, so you can use it for Bitcoin, Dogecoin, Ethereum, and other cryptocurrencies.
One of the best things about this platform is that apart from the actual wallet features, you also have over a hundred assets to look into. They give you valuable rewards while allowing you to make passive earnings by using your favorite assets. The platform is straightforward to master, but you should be mindful of the high transaction fees that might pose a problem.
SoFi stands for Social Financing and is a company that has been on the market since 2011. It was built on the idea of four Stanford students who turned it into the famous company it is today. Even the LA Rams and Chargers stadium bears its name – SoFi Stadium.
There are four main services that SoFi offers to users. First, it lends money to people and businesses. Then, it provides financial services such as budget management and investment opportunities and management. Third, it provides insurance to those who need it. Lastly, it provides the necessary tech aspect to businesses who want to update from traditional financial services.
Chime is a typical example of a challenger bank. It is not really a bank but rather partners with banks to give customers easy access to all the financial services they need. It does that through an app that combines finances and technology.
Since there are many banking apps at the moment, the aspect that Chime uses to separate itself from the competition is the fact they do not impose any monthly fees on transactions. You also get the opportunity to overdraft up to $200 without paying any fees, which is quite convenient when you think about it.
Venmo is similar to PayPal as it offers some of the same features. For example, it has an easy-to-use app that allows people to transfer funds with each other. Considering how popular it has become, many retailers have also decided to allow online payments to be made through it. But the best part is that you can receive or send money from a peer in mere seconds.
As of recently, the option to make a business account has also been made available. If you have a business, consider opening a Venmo account to make it easier to transact.
Apple Pay is an app available solely to iPhone, iPad, and other Apple device users. It was initially introduced in 2014 but has since been updated and changed to fit the market development. You can find it on any Apple device under the name “Wallet.”
This app allows you to make payments using nothing but an Apple device – whether a phone, smartwatch, or something entirely different. After you connect your credit or debit card with your wallet, you will no longer need to use the physical card for payments. It offers an added layer of safety as your card information will be protected from possible scams or fake POS terminals.
Binance is a platform similar to Coinbase. It’s used to exchange cryptocurrencies, but it can also be used for crypto trading. It covers various cryptocurrencies, but the fun part is that the company also has its own cryptocurrency called Binance or BNB. You can buy, sell, or trade with BNB along with Bitcoin, Dogecoin, Litecoin, Ethereum, and other currencies through this simple platform.
Even though it has only been on the market since 2017, it has many users. You should be aware of market restrictions regarding the platform, so you must check those before installing and using the app.
Wealthfront is one of the most popular companies dedicated to financial advisory, which we mentioned in the part about fintech products. It has been on the market since 2008, and it currently offers an amazingly equipped platform with various tools and services that can help people manage their finances.
As expected, Wealthfront services are not available for free, but at least a subscription is not as expensive as you would expect it to be. There are no fees on transactions made through the platform, and you can get a ton of investment and trading opportunities daily. So, it’s a wise investment for everyone looking to take their finances to the next level.
Verifi is a company with a long tradition, having been established in 2005. Since then, it has offered pristine protection and management to individuals and businesses. The protection applies to all types of transactions, and it also does a great job of minimizing the risk of fraud. So, it is a must-have for everyone serious about their business.
In 2019, the company was acquired by Visa. So, it might be wise for everyone with a visa card to look into the services of this company if they want to prevent disputes and keep their money safe and away from the prying eyes of scammers.
You might also know this company under the name Square. It was known that way until 2021 when it changed its name to Block during a company rebrand. Nowadays, it operates the same way as before, as an online banking method that allows businesses to keep track of inventory and sales.
Block is also a parent company of Cash App, TBD, TIDAL, and Spiral, so you can rest assured that they know what they are doing. If you need to make mobile payments or manage your business through a single platform, their platform is a great option to consider.
Cash App is similar to Venmo and PayPal as it offers some of the same services. You can use this platform to make quick transactions through your mobile phone. However, for those interested in physical credit and debit cards, there is also the option to issue one based on the account you create on this platform.
This was initially supposed to be a P2P platform, but it gained more users than expected and even attracted the attention of many other businesses who wanted to use its services. So, nowadays, you can use it for any kind of transfer while also using it to send money, receive money, or make transaction requests.
Circle was started in 2013 as a platform for cryptocurrency exchange. However, the owners changed their minds and discontinued the existing apps and platforms a few years later, only to create a new Circle platform that functioned as a stablecoin.
Now, everyone who wants to participate in cryptocurrency exchange, possibly even buy some crypto, can install Circle on their devices and use it to do so. It is completely safe, so there is nothing to fear about it.
Robinhood is a company established during the coronavirus pandemic. Even though it is relatively new, it has attracted a lot of attention because of its services. Namely, this is a platform you can easily use to invest even if you only have a little money. It will select only the best investment opportunities and help you learn how to make the most out of the deal.
Dealing with brokerage firms is usually dreadful and takes a lot of knowledge, but that is not the case with Robinhood. This straightforward platform is suitable even for investment beginners, so do not hesitate to give it a closer look.
Plaid is a company you should look into if you need to make online transactions often, especially transactions of significant sums of money. Plaid works as a safeguard to the information that individuals and companies share online. So, it ensures that your information stays protected at all times.
Although encryption and protection are the platform’s main focus, Plaid also does a great job of connecting financial apps with credit card providers or banks. It ensures that everything is secure from the moment you initiate a transaction.
Thank you for reading this guide on fintech, the best fintech products, and the uses of fintech products. Remember that every development in the field of finances that aims to challenge the existing financial methods is a part of fintech.
There are many fintech products and companies developed up to this point, and the number will only continue to grow, perhaps even more rapidly than before.
At this point, we believe it is the perfect time to start your own fintech startup and make a name for yourself in the world of finances. Whether through a simple payment app or a platform that offers financial management for people and businesses, you can take your pick. There are many options, so you will surely find something that fits your desires and plans.
That said, we would love to hear about your ideas for fintech startups or companies. If you have any and are willing to share, please do so in the comment section below. We cannot wait to read your fabulous ideas – who knows, if your business plan works out, you might end up on the pages of our CCStartup one day!