Fintechs are broadly categorized into Fintech banks, Digital payment systems, Personal financial management (PFM), Wealth Management and Fintech lenders.

 

If you think the tech space is a difficult one, then you have probably not considered the fintech niche. Fintech is almost impossible to thrive in, and it’s okay to approach fintech with some sort of shield against heartbreak because, one minute, you could be thriving, and the next, it's all up in flames. That’s how volatile the fintech space is. It only takes one regulation, law, wrongly handled transaction, or the wrong publicity to get a life’s wortth of fintech work in the ashes. 

Not sounding like a “What they did to thrive” kind of article, right? Sometimes, you might need to pass through the dread to appreciate the light. Talking about dread and fintechs, statistics show that 75% of all fintechs fail within two decades. 37coin, Bitpass, CircleBack Lending, Eventvue, FlowTab, and others fall into this category. Hence, the possibility of failing is worth considering before beginning your fintech journey.

 

However, this article is focused on the 15% of Fintechs that made it through the hurdles of growth into world recognition and adoption. Did they face troubles? Yes. Were there days that giving up felt better than trying one more time? Yes. Did they require some extra funding at one point or another? Yes. So, what kept them going? 

 

This article is built around the answers to the questions in the previous paragraph. Tighten your seatbelts as we dig into the success stories of three global fintech organizations making waves in the tech space.

 

The Three Titans

Financial concerns and the growing need for finance-related solutions have made fintech a priority. In fact, the percentage of US consumers using technology to manage their finances jumped from 58% in 2020 to 80% in 2022. These statistics prove that, in today’s world, more people now use fintech products than social media, keeping Fintech behind the internet as one of the most widely adopted consumer technologies.

 

Frontlining the drive to provide top-notch financial tech solutions are three companies that will be understudied in the succeeding paragraphs: PayPal, Klarna, and Stripes.

Paypal (From Mobile Payments to Financial Ecosystem King)

PayPal has had its fair share of turbulence through all the processes that has brought it to the leading position in the world of digital payment platforms. PayPal was founded in 1988 and was called Confinity by the founders,  Peter Thiel and Max Levchin. The goal was to facilitate low-cost, almost effortless digital payments for consumers and businesses, and so the solution targeted an underserved market.

 

The philosophy behind this Fintech giant was simple: convince customers to share their emails, banking and credit card information in return for fast, low-cost payments. Optimistic about the factuality of the company’s philosophy, small businesses, online merchants, and consumers quickly signed on, with the company handling more than $3 billion in payments from 10.2 million individual consumers and 2.6 million commercial customers within three years of opening its doors.

 

In January 2000, PayPal's founders and managers noticed that end users were asking those they purchased from on the internet to adopt paypal as a payment channel to foster quicker payments. This brought about the partnership between eBay and Confinity that paved the way for integrating the digital wallet system with eBay. Two months later, Confinity hit the 1 million customer mark and, in June 2001, Confinity officially became PayPal. PayPal got acquired by eBay and, a few years down the line, split again to become an independent company. 

 

As an evolving company, PayPal has begun edging into the lucrative but combustible cryptocurrency market, focusing on the technology's underlying Blockchain platform but keeping away from Bitcoin - for the time being. Additionally, the company is building an empire in India, an important global market, hiring 1,200 new company technology specialists to focus on India for mobile and other merging payment technologies. PayPal might soon become India’s number one digital wallet. PayPal has launched a partnership with Facebook Marketplace, a partnership that is expected to be more lucrative than the initial partnership with eBay.

 

PayPal has had it’s taste of bitter waters over the years. From the beginning of PayPal's existence, hackers and fraudsters have continued to target the company to steal personal financial data of its huge user base. In addition, since it is an open platform, criminals also adopt PayPal digital wallet for fraudulent transactions and illegal payment, an action that had PayPal getting fined heavily by federal and government regulators.

 

The Secret

Regardless of PayPal’s challenges, it has continued to exist. This is because PayPal was built on a strong philosophy- fast, low-cost payments. One that keeps customers at the forefront of operations. After building their initial customer-base, Paypal continues to exploit opportunities in the finance space and they are always early on the scene of providing solutions. This ensures that they remain relevant.

 

Finally, customers and their money are not an easy duo to break. If they must entrust a Fintech company with their finances, they want to be sure that they are putting their eggs in the right basket. In order to protect against hackers and maintain a seamless interface, PayPal has been known to work with the most qualified developers, Also, the efforts they have made to comply with national and state regulations and keep their dealings transparent enough to have customers rest easy is highly commendable.

 

Klarna (Buy Now, Pay Later: Rewriting Retail Finance)

Like every big dream, Klarna sprung up from rejection. In 2005, Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, founders of Klarna came up with the  "Buy Now, Pay Later" idea  to make online payments easy and safe for consumers. Optimistic about the validity of this idea, they pitched it in a Shark Tank style competition in Stockholm and got the awakening of a lifetime. The judges called it useless and even opined that banks were wise enough to have gotten the idea if it was something feasible. 

 

Fueled by the rejection and the words, "The banks will never do it,"  Klarna founders continued to build their vision of a BNPL easy payment platform for users; and in mid-2005 Klarna started operations in Sweden. An angel investor and previous Erlang Systems sales manager, Jane Walerud, invested in their company and put them in contact with a team of programmers to help them build the platform. 

 

As adoption of the alternative credit solutions grew, Venture capital firm, Investment AB Öresund took a stake in the idea and invested in the company. Three years later, Klarna started selling their services in Norway, Finland and Denmark. Klarna also expanded operations to Germany and the Netherlands, growing her customer base to millions. San Francisco-based Sequoia Capital saw the need to be a part of the company and, in May that year, they entered as investors. In 2010, Klarna’s revenues grew by a whooping and in 2011, they got listed by “The Telegraph” as  one of Europe's 100 most promising young tech companies.

 

With no intentions to slow down operations, Klarna began operations in Austria in 2012, and in 2013, Klarna and German SOFORT AG merged after Klarna acquired SOFORT Banking from the majority shareholder Reimann Investors, becoming Klarna Group. Klarna launched in the United States in September 2015. That year, Minister of Enterprise and Innovation Mikael Damberg dubbed Klarna one of Sweden's "five unicorns", by which he meant startup companies that had succeeded in growing and attracting international investments. The other four companies were Spotify, Mojang, Skype, and King.

 

In November 2021, Klarna fully defined its agenda of redefining retail payments by launching its Buy now Pay Later service to U.S. consumers, also allowing payment immediately and in full to any online retailer that supports Klarna. Their launching the Klarna card enabled interest-free payments in physical card format, either in stores or online.

 

The Secret

Klarna is the epitome of doggedness. You should keep this in mind while developing your startup idea. Building despite the poor receptivity at the start and choosing to expand rapidly is a testament of that. They also leveraged customers and investors for growth. As a credit solution innovator, they ensured that as they grew, they had customers' needs at the hem of their operations while they sought e-commerce partnerships. This meant that they were willing to evolve rapidly, switching from a BNPL platform to a real-time payment platform the moment the need arose. 

 

Stripes (The Invisible Engine Powering Online Commerce)

With small businesses and small business owners as target market, Patrick and John Collison, founders of Stripes, built the ubiquitious system powering online commerce in 2010. This innovative payment platform has become an invisible power house, making it incredibly easy to pay for goods and services online. Their vision was simple: to create a payment platform that would make it easy for small businesses to accept payments from anywhere in the world. And they succeeded beyond their wildest dreams.

 

The singular dream of smooth payment processing, facilitating online businesses, egendering a  global reach, and fraud prevention for small businesses, has created a payment platform that has revolutionized how goods and services are paid for online. Stripe’s payment processing platform allows companies to accept payments online and manage transactions from their websites and mobile applications in over 135 currencies and is available in over 40 countries, making it an excellent option for businesses with a global customer base.

 

The Secret

Stripe has helped businesses of all sizes accept payments online. What amplifies its attraction is that it provides cutting edge technology as it’s built around third-party apps and offers its own APIs. This makes the platform ubiquitious..The platform offers plenty of integrations with technology and consulting partners. In other words, Stripe had a plan for expanding their customer base by allowing external developers to extend their use.

 

Conclusion

The three titans discussed in this artcle have been like you. They have learnt to navigate through the stages of growth and have surpassed the failure statistics because they leveraged on the power of honing a clear vision, collaboriating and knowing the right time to scale.

 

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