‘Fintech’ Express to race in 2021!

4 min read | January 21, 2021 07:57 PM AEDT | By Team Kalkine Media

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2021 is going to witness some of the most remarkable innovations coming from the FinTech sector. From BNP (Buy Now Pay Later) to newer payment innovations, the Fintech Express in expected to race faster in 2021.

We have entered 2021 with some amount of cheer after a painful 2020. All thanks to a group of novel vaccines each trying to curb the virus in its own way. 2020 was a year that hinted upon a future of uncertainties and made each and everyone of us ready for the worst. Technology came to the rescue and we all witnessed a remarkable flurry of innovations that led businesses breathe. The economy functioned efficiently throughout the lockdown because of tech-enabled solutions; e-commerce and fintech in-particular raced ahead in time.

Please read: Which are the top Fintech companies in Australia?

With more and more people getting comfortable shopping online, working from home and investing in greener companies; technology sector is headed towards a boom in 2021. In 2020, when most industries struggled to get going, the Information Technology sector index delivered an impressive return of 41%. Some tech sector players have performed reasonably well and have garnered considerable attention from the market participants.

Source: © Andreypopov | Megapixl.com

The pandemic and the resultant lockdown gave financial technology players a room to focus on innovations. And since then, there was no stopping. The concept of 'Buy Now Pay Later' gained traction during a period when consumers were facing financial crunch and prefer to pay in instalments rather than making payment in one go. The fast pace growth of the industry is motivating companies to come up with flexible payment option which shall be beneficial for both retailers and consumers. The latest to enter the competitive marketplace is Affirm Holdings Inc. The much-awaited IPO finally happened on 13 January 2021 at an initial value of more than USD 12 billion. The company is already successful in creating a lot of ripple in the market and taking the BNPL competition to the next level.

Source: © Arturszczybylo | Megapixl.com

Upon listing, Affirm is now in direct competition with one of the leading Australian BNPL player Afterpay Limited. The company is going by the pulse of the market in 2021 owing to a continuously growing BNPL market and booming e-commerce space.

Please read: Affirm off to a flying start on NASDAQ, ASX-listed BNPL players have a field day

With new entrants like Affirm Holdings looking at a remarkable 2021, large-cap, innovative companies are still the place to be. Afterpay’s eye-popping growth on ASX charter continues to drive the market scenario. From AUD 8.90 in March 2020 to over AUD 130 per share, ASX market darling Afterpay has displayed a tremendous success story. With a lucrative gain of 875% in 2020 on ASX, the BNPL player evolved as an outperformer in the fintech segment. The marked shift in consumer behaviour towards online shopping in COVID-19 enabled the Company to double its sales to AUD 11.1 billion in FY 2020. In the month of November, Afterpay grabbed market attention, noting record sales of more than AUD 2 billion across geographies. With plans for global expansion, Afterpay is expected to gather steam in 2021.

Another BNPL company, Splitit Payments Ltd has been in the spotlight lately after it signed an agreement with Google Japan G.K. to enable Japanese clients, to use instalment plans to buy from the Google Store in Japan for the first time. In the upcoming weeks, Japanese consumers who will purchase the new 5G phone, Pixel 5, or Nest devices from the Google Store, would be able to divide their expenses into equivalent monthly payments. The partnership is a step towards the Company’s expansion in the Asia region and the company is worth eyeing in 2021.

The S&P/ASX 200 Information Technology sector has had a rough start to 2021 following a scintillating 2020. Despite the sector index’s recent performance, several tech players have gained substantial market attention and these fintech players are looking promising in 2021. A Deloitte report stresses upon the fact that with the broader economy shifting from “respond mode” to “recover mode”, the COVID-19 pandemic may create new opportunities for FinTech’s. The World Economic Forum too believes that the pandemic has moved fintech up the regulatory agenda.

Both sector-wide and fintech-specific measures are formed by the Financial regulators to harness prospects and reduce the risks brought in by the tech-enabled financial innovation.

Technological innovations will shape the fintech industry in 2021 and is expected to make it more efficient, robust and consumer friendly.

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