Fintech or financial technology in the last decade has been one of the world's most promising sectors. FinTech has changed the way finances are conducted with mobile banking, investing, and blockchain apps. According to the Modern Knowledge World, the centerpiece of this technology trend is the United States where 1,491 startups and $58,5 billion invested in the sector.
Yet banks are not the only financial institutions that have changed technologies. Digital financial access is embedded in entire markets, including digital loans and mobile stock systems, e-commerce payment networks, and digital currency exchanges.
What is Fintech all about?
Fintech means Finance + Technology which refers to the amalgamation of both into software that seeks to improve and automate the delivery and use of financial services.
Fintech firms have changed nearly every part of the finance sector in recent years. Ten years earlier, individuals had to visit a branch or bank to apply for a deposit, a credit or to transfer funds literally from one bank to another. At present, Fintech has made it possible, without having ever stepped in a bank to spend, borrow, save, and move funds through online and mobile services. Although conventional institutions are picking up technologies from fintech steadily.
Evolution of Fintech in the USA
Fintech was even longer than most people believe. Though Fintech's current version helps you to pay for a coffee cup with a smartphone app, financial infrastructure history goes back to the first credit cards accepted by the public at the end of the 1950s.
Financial technologies developed and implemented many significant milestones in the mass market after the credit card, such as ATMs, Electronic Shares, Mainframe Bank computers, and internet stock exchanges. Many modern technologies improved the financial system that most people used, but had to think seldom about every day.
Today, solutions from the Fintech industry challenge existing banking infrastructure, for example by using a payment app on the mobile wallet, rather than the carriage of physical credit cards in a physical wallet.
Fintech's various markets have been revolutionized, particularly in the financial, commercial, insurance, and risk management industries. Fintech firms include startups, technology companies, and existing financial institutions leveraging digital innovations such as big data and artificial intelligence to enhance financial services usability and performance, blockchain, and edge computing.
List of top Fintech Startups in the USA
Stripe is an Irish-American financial service and SaaS company founded by Patrick and John Collison. Stripe provides payment infrastructure for businesses of all sizes from startups to large enterprises that use Stripe’s software, and APIs to accept payments, send payouts, and manage their businesses online.
Zoom, Shopify, and Amazon are some of their clients. Stripe claims to be the world's most powerful and end-to-end API. In 2019, Stripe launched a new corporate credit card and small business loans, which are automatically repaid from payments it processes for borrowers.
An increasing crowd of startups bets on your smartphone for banking. Chime, headquartered in San Francisco, has experienced its sales explosion over the past year and provides a debit card with no annual or overdraft charge. According to a person familiar with the topic, it is set to hit almost $200 million in 2019, a fourfold increase over 2018. With many significant tactics, Chime has drawn 5 million clients – or about 3.3 million users, based on an annual average of 1.5 accounts per client. Chime allows you to pay for a direct deposit to control the main functionality.
Plaid was founded by Zach Perret and William Hockey. Plaid provides a simple front-end module that streamlines the onboarding experience. It can be implemented with 2-3 lines of coding. Plaid connects payment apps like Square Cash and personal finance apps like Acorns to users' bank accounts to transfer and track funds. American Express, Venmo, Coinbase, and Betterment are some of their clients.
SoFi began out as a small business with just one commodity by launching a fintech service mainly for refinancing student loans. The organization sells several items today, but refinancing student loans remains its flagship commodity. SoFi is a value-driven organization with a task to help our members earn a living. We develop new financial goods and services that can enable customers to borrow, save, buy, save and safeguard their cash more, to gain financial freedom, and to meet their ambitions—from homeownership to pension plans, to paying student loans, and more.
CoinBase has become a regular on-ramp for new crypto-investors as the leading mainstream cryptocurrency exchange in the United States. Coinbase provides a broad range of items, including cryptocurrency investment, an integrated trade network, institutional custody accounts, a retail investment wallet, and a secure U.S. dollar coin.
Coinbase has taken the lead in offering crypto custody services to organizations since having developed its position as a stable and regulatory crypto-exchange and a personal wallet and new currencies tailored to cater to those wanting more anonymity.
Ripple is both a peer-to-peer (RippleNet) and a digital currency transferrer (ripple XRP). The platform itself is a protocol for open-source transactions between two parties. All currencies, such as sterling currencies, bitcoins, air miles, among others, can be traded on the site. In 2019, XRP sold $500 million to MoneyGram, using sales to raise and invest up to $50 million, currently using XRP in 10% of its Mexico purchases across borders.
7. Toast, Inc.
Toast, Inc. is a Boston, Massachusetts-based cloud restaurant tech firm. Toast, Inc. was one of the leading technology names when the calendar was turned towards 2020. In the secondary markets, shareholdings of the private enterprise that produces restaurants' apps were in strong demand. In mid-February, current investors contributed about $5 trillion in investment, almost double the previous year.
Spur simplifies human capital by leveraging a digital interface to provide embedded financial services on an hourly basis for its staff. Your business plan saves time and resources and allows staff to improve their financial status. Spur was developed by companies who want to take up the responsibility of job management less time and more time for their enterprises, their clients, and their hourly employees.
9. Credit Karma
Credit Karma is known best for its free credit and loan reports. It is however a platform that provides its customers the ability to create a stronger financial future.
If you wish to use Credit Karma you should give your name and the last four digits of your Social Security number. You should have simple personal information. Credit Karma can then view your loan report, collect and make it available to you with your consent. For users who utilize credit card reviews, personal, home-and-auto loans, or auto insurance, Credit Karma earns a big reference fee.
Home sellers in 21 cities can submit all-cash deals online from Opendoor and collect offers within 24 hours. The application initiated last year helps customers to arrange their own guided tours and deliver houses to sell in six cities, Dallas and Phoenix included. You only present details and pictures of your home through their website to sell your home with Opendoor. All these advantages Opendoor especially apply to veterans, openings, relocators, or people who have to sell their homes quickly. Opendoor also appreciates the ease of online and straightforward deals and costs in the youngest generation.
Founded by Alex Timm and Dan Manges, Root raised $100 Billion for a $1 Billion valuation in 2018 and entered the unicorn club. Root provides car insurance to drivers. Root qualifies customers and sets their rates by first monitoring their driving with a smartphone app measuring 200 variables. After monitoring they provide a quote and allow their customers to change policy. Last year, Root brought claims processing in-house and expanded into renters’ insurance, offering to cover property whether stolen from a customer’s car, apartment, or hotel room.
Paydiant, Inc. is a PayPal-owned financial technology agency. It offers cloud-based services for supermarkets, insurers, point of sale, and ATM vendors. The enterprise is located in Auburndale, Massachusetts, and was founded in 2010.
The North Bridge Investment Partners and General Catalyst Partners funded Paydiant for $ 7.6 million in 2011. In 2012 and 2013 Paydiant earned $12 million and $15 million in grants.
Through this article, we learned what exactly Fintech is and how the evolution of fintech in the USA took place. During the COVID–19 pandemic, particularly in emerging markets, the Fintech industry continued to help expand access to financial services with strong growth in digital financial services of all kinds. For poverty reduction and economic development, access to quality financial resources is important. The access and use of basic financial resources for poor people, in particular women, will increase wealth, strengthen resilience, and better their lives. Fintech developments aim to lower the costs of service supply, enable more customers to be served and reduce the need for face-to-face contact, critical to the pandemic's continued economic activity.
FAQs - USA Fintech Startups
How does technology help finance?
The impact of technology on financial services allows the customer to avail of easy digital transactions.
How does technology affect the financial industry?
The arrival of smart analytics helps the financial industry to understand its customer better and provide services accordingly.
What are the new financial technologies?
Blockchain, Robotics, Artificial Intelligence, Cryptocurrency, and many more.
Is Chime a legit company?
Yes as they're FDIC insured, so it's a safe place to keep your money.
What are the top Fintech companies?
Square, PayPal, Goldman Sachs, Green Dot, MercadoLibre, and many more.
Do FinTech companies pay well?
Yes, the USA is the top earner with making $169,000 annually.
Is Fintech a good career?
Fintech would be considered as a good career opportunity for people who are seeking to build their career in the field of finance domain.
Which is the largest Fintech company in the world?
How do banks use Fintech?
Banks are using fintech technology in the form of mobile banking apps.
What are Fintech tools?
Artificial Intelligence, machine learning, mobile computing, and more that enable borrowers to access funding.
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