The Raise of the Rest in Fintech

by: Stefano Tresca

Would you like to have 2.5 billions customers?

This is the number of “Unbanked” according to McKinsey, adults who don’t use banks or microfinance institutions to save or borrow money. The larges part of these potential customers are based in Asia and Africa, with an outstanding 800 million adults living on less than $5 a day.

This is where Fintech can make a difference. It’s a huge mass of humanity unserved by traditional banking because they were too expensive to reach.

Not true anymore.

Smartphones are cheaper and more popular, with 1.9 billions users estimated in 2015. Android is the game changer. Xiaomi, a Chinese brand, came out with its first phone just in 2011, but they are aiming to sell 100 million smartphones this year.

An Unbanked with a smartphone is not “unservable” anymore.

It’s already happening. Malaysian startup Soft Space and Singapore SmartPesa, they both provide mobile point of sale empowering 600 millions potential customers to send and receive non cash payments.

An old lady in Kuala Lumpur could run a street food stall reducing the risk of being mugged. From her point of view it’s just a tap on a phone, a tool that she already uses every day.

In the background, she’s pumping money in the banking system. A small sum for each merchant, multiplied for hundred million merchants every day.

Correctly used, this cash flow could energize entire economies.

Not to mention that the profit for investors and startups is going to inspire more investors and more startups, thus more research and development, thus more profit, and so on in an virtuous circle.

Being based in London — the world capital of Fintech — or in Silicon Valley, we may forget what’s happening over there: the Raise of the Rest.

Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version.

The FINTECH Book is due to be released in April 2016 and is available for Pre-Order on Amazon.