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Insights and Expertise

European insight into the U.S. fintech landscape

ments, banking and shopping together are yet to effec-
tively break through to the U.S. market. Cash also remains
very much king in the United States – with 67 percent of
Americans preferring to use it over other payment options
(see https://bit.ly/4gewKAv), compared to just 11 percent in
the UK (see https://bit.ly/3BwWEjJ).
It isn’t just consumers who are more conservative when
it comes to fintech in the United States. Payment infra-
structures are often built on old-fashion systems that are
problematic to modernize, slowing down the pace of in-
novation in the industry. Companies that deliver products
specifically designed to modernize these infrastructures
will undoubtedly stand out ahead of their competitors.

By Robert Kraal In recent years, consumer trends and behaviors in the
United States have shifted dramatically. A growing sense
Silverflow of caution has made Americans more hesitant to adopt
new financial technologies, creating challenges for fintech
reaking into the U.S. market as a next-gener- startups. However, there’s a key opportunity: Americans
ation fintech is no small task. For European are quick to embrace innovation when it addresses a tan-
firms, the barriers are steep: the United States gible problem and delivers meaningful solutions.
B is a lucrative yet fiercely competitive market,
often resistant to rapid technological change. Meanwhile, A strong, persuasive value proposition is essential for suc-
fintech funding has plummeted by 91 percent since 2021, cess. Fintech companies that identify weaknesses in the
with investors now more cautious than ever (see https:// existing system and deliver creative, effective solutions
bit.ly/41t8ztz). are better positioned to earn the trust of hesitant con-
sumers. A different approach, however, is to focus not on
This article offers a roadmap for overcoming these chal- end-users but on the core infrastructure of the payments
lenges. By aligning product innovation with an under- industry, tackling key challenges faced by banks and pay-
standing of U.S. market dynamics and investor expecta- ment processors.
tions, fintechs can find opportunities amid adversity.
The shift in U.S. fintech funding
High stakes, higher inflation
There’s no denying that the early 2020s fintech boom has
Throughout 2024, the COVID-19 pandemic continues to significantly slowed down. Since 2022, fintech invest-
leave a profound mark on the U.S. economy. Soaring in- ments have plummeted (see https://bit.ly/4itvHOK), with
flation and rising energy costs are squeezing household major deals becoming rare. In the first half of 2024, the
budgets, leaving consumer confidence fragile. This dimin- United States saw just five deals surpassing $1 billion, all
ished optimism poses significant challenges for new busi- of which were buyouts. The IPOs and mega-venture fund-
nesses, particularly those that need to establish trust with ing rounds that once dominated headlines are now a dis-
both consumers and enterprises in an uncertain economic tant memory.
climate.
Investor priorities have shifted dramatically. Once quick
While it may seem as if the United States has a vast fintech to back fintech startups and ambitious ideas, they now
landscape, there is a limited access to financial technolo- demand proven business models, seasoned leadership
gies in the United States, that many people in other parts teams and demonstrable technology. The days of pouring
of the world consider standard. Although peer-to-peer money into untested concepts are over. Today’s fintechs
transfer apps such as Venmo, Cash App and Zelle exist, must showcase not only their innovation but also their re-
many Americans often rely on them because of the lack of silience in a fiercely competitive and cautious market.
bank-to-bank transfer infrastructure in the United States.
On the flip side, bank-to-bank transfer is a common fea- Amid this tougher landscape, a bold mission for entering
ture in Europe. the U.S. market is to modernize the outdated infrastruc-
ture of the payments industry, with a focus that isn’t just
Similarly, other technological innovations like tap-to-pay, on speeding up transactions but is also on fundamentally
QR-code payments, and "super apps" that cluster pay- transforming how payment data is processed and utilized.

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