5 Ways FinTech Has Helped Small Scale Entrepreneurs & Startups

FinTech is a boon to all business ventures who wish to expand their business and increase profits. FinTech turns a device (smartphone), owned by everyone, into a front-end gadget for pitching their (companies’) sales. Small scale and new start-up entrepreneurs usually face a lot of challenges in the beginning when they have to compete against their already established rival companies. But with the advent of FinTech, the playing field becomes a leveled ground for all the competitors despite the fact, whether one is established or not.

#1. Easier Payment Options. Payments are made easier that making a cup of coffee. With the advent of revolutionary financial technology, customers are given the top most priority and hence the start of hassle-free payments. PayPal, Apple Pay and Bitcoin are a few examples of the way consumers now pay for their purchases. These startups have totally disrupted the conventional way of payment through banks.

#2. Crowdfunding — The novel way to raise funds. All you need to have to begin your start-up dream is “an idea”. There are many ways today to raise funds on the internet by pitching your idea. Sites like GoFundMe, Kickstarter and Indiegogo act as a meeting ground for people who want to invest in ideas and people who have those ideas. This allows individuals to “crowd fund” their dream projects with investors all over the world.

#3 FinTech — A big challenge for Banks. A few centuries back, one could not have imagined a life without banks or its equivalent. FinTech companies are taking on the challenge to create a “bank-less” world. Traditional banking systems and big banks have had their share of loss of public’s money, fraud, insider trading etc. But now with FinTech in the picture, people can afford to be independent of Banks. As stated by Nasir Zubairi, Venture partner, Finleap, Berlin, “3 billion people, 50% of the world, do not have access to a banking system, and I think that FinTech can help in solving the problem around credit. There’s a huge opportunity for FinTech companies and of course for people who will benefit from their solutions.”

#4. Your own bank account, but not controlled by any bank. Apps such as Acorns and LevelMoney provide a budgeting platform that enables you to keep track of your income and expenditure. It also provides a feature that creates a daily allowance limit for you. The new generation is constantly in search of new ways to work their money by investing, lending or saving, which is what is offered by FinTech companies. With zero dependence on middle men like Banks, the individual is totally in control of their own money.

#5 P2P and B2B business models showing huge profit margins. Peer-To-Peer (P2P) and Business-To-Business (B2B) models like real estate services, home cleaning services and insurance sites see a big boom at the onset of FinTech. For example, iZettle identified over 20 million small-scale businesses in Europe that do not have credit/debit card payment processing. Once these businesses are provided the necessary competence on minimal expense, they are on par with their giant, established rival competitors.

#6. Wealth Management done by automated bots. The latest product of FinTech is the “robo-advisor”. Robo-advisors are automated algorithms that offer wealth management services — once engaged, they routinely do your dividend reinvesting and asset balancing for you. Youyu is the latest kid on block for FinTech totally changing wealth management completely.

FinTech is a great leveler. Today, it is relatively easy to kick start your dream entrepreneurial venture, in scale that you want to, within one-tenth of the budget that you would have actually required years ago.