If you've ever bought or sold anything online, then you already know: The ecommerce world has exploded, and it doesn't show signs of stopping. Global e-retail sales are expected to grow by 21.5% this year from 2018, and are due to hit US$4.88 trillion in 2021. But how does that other hot-button buzzword —"FinTech"— fit into the ecommerce equation?
The short answer is: really, really well.
What is FinTech?
As its name suggests, financial technology (FinTech) is the application of technology across all functions of the financial services sector.
In traditional financial institutions, the software has hitherto been used for accounting and other back-office functions. But with so much new and disruptive innovation emerging, technology is no longer being relegated to a behind-the-scenes role; it's taking center stage in customer-facing processes. So, sure— FinTech is penetrating every level of the financing domain. But what does this mean for ecommerce?
FinTech may span an increasingly expansive range of functions, but two categories of the financial services market lend themselves particularly to ecommerce integration: namely, payments and lending. Here are some benefits ecommerce owners can reap from harnessing FinTech services:
1) Payments
For buyers
In fact, one key contributor to the explosive growth of ecommerce? Payment innovation. Think e-wallets, new payment options, in-app purchasing, and cryptocurrencies. These FinTech offerings enhance efficiency and security; they also eliminate the traditional blockers faced by buyers on ecommerce platforms for point-of-sale payments.
Payment innovation gets consumers through the door and keeps them in virtual stores. For instance, incentives like increased payment options beyond credit card payment (including direct debit, bank transfer, and cash-on-delivery) attract customers to spend in the first place. Further along the line, quick options to save their credit card details ease them into repurchasing the second, third, or tenth time.
For sellers
So far, you've probably been thinking of your own consumer experiences in the B2C or C2C space— on platforms like Lazada, Qoo10 or Carousell. But the target audiences for FinTech offerings aren't just limited to consumers as end-users; they also encompass businesses and entrepreneurs on the other end of the ecommerce supply chain.
Certain FinTech functionalities are integrated with ecommerce platforms to optimize the seller's user experience. For example, integrations can allow merchants to receive prompt payment directly from the marketplace. But most merchant-facing FinTech offerings occupy a different category... one that helps them buy before they can sell.
2) Lending
That's because financial innovation hasn't just affected payment transaction methods— it's revolutionized funding options as well. FinTech has facilitated the rise of crowdfunding, peer-to-peer lending, credit apps, and other online lending services.
With access to non-traditional financing arrangements, businesses now have alternatives to opening a physical account at a traditional bank. FinTech financing firms offer an online account that can be set up and drawn on in a matter of hours, with no hidden fees. That means credit access: sans the endless paperwork, long waiting times and bureaucratic lag; minus the opening and maintenance fees typically charged for business accounts.
The beauty of FinTech is that it renders a traditionally complex sector legible, and simplifies typically opaque processes: now business owners can pay with a click or access funding in minutes.
Credit apps allow small businesses to access lending solutions online.
The FinTech Revolution
So it's clear what FinTech means for ecommerce: Boundless. Opportunity. It offers merchants and consumers alike new and improved ways to buy, sell and borrow in the ecommerce economy.
It's all part of the "FinTech Revolution": financial innovation empowers entrepreneurs to dream big, grow ambitiously, and realize their full potential. They couldn't do it before when banks were the only financing option for small businesses— many were denied loans due to a lack of credit history and assets for use as collateral.
With the advent of FinTech, that old model has changed. Aspire believes small businesses shouldn’t be penalized for their size; they should be valued as opportunities. That's the mission Aspire was founded for, and it's the vision we'll always stand by.
It's undeniable: ecommerce and FinTech are two forces growing in tandem, and taking over the world. Now you can tap on their integrations to join in the march towards digitalization. With Aspire, you can get the funds you need to grow your ecommerce business.
In summary
Here's leaving you with a powerful talk about FinTech, and the eye-opening reality of today's banking industry. Enjoy!
https://www.youtube.com/watch?v=pPkNtN8G7q8
Aligned to what Aspire is all about, this talk will show you how FinTech is shaping the future of banking industry.
Psst… you might also be interested in:
When Should You Get a Business Loan?
What We Learned at Innovfest Unbound 2019
Aspire was founded to provide small business owners with funding solutions – no long waits, paperwork, or hidden fees. Apply online to obtain a revolving credit line of up to SGD$150,000 to unlock your business potential.
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