Starting a new business is no easy task. Primarily, young entrepreneurs need to develop a valuable, profitable idea that fills a market gap. Then, they need to research their target market, assess their potential competitors, find partners, and overcome a thousand challenges, ensuring funding being the first on a long list of obstacles.
Until recently, it was next to impossible to get funding for a startup if you didn’t have wealthy parents and a spacious garage. However, the boom of the fintech industry has brought an abundance of benefits, offering solutions that support young entrepreneurs and set them on a path to success.
Take a look at just some of the ways fintech gives small startups a head start.
Lending Is Made Easier
Whereas traditional lending is a lengthy process that requires extensive counseling, like in the case of reverse mortgages, according to All Reverse Mortgage, fintech solutions make this entire affair easier.
Instead of going back-and-forth with your chosen bank, going through endless paperwork, then waiting days or even weeks only to learn the bank denied your application, you can get a business loan in a matter of hours with fintech solutions.
Simple tools like loan calculators can instantly let you know whether you’re eligible for a loan. Fintech businesses can process your application, send a response within 24 hours, and then finance your loan within days.
As a general rule of thumb, fintech has more lenient lending criteria, favoring small and medium-sized businesses (SMBs), whereas banks lean towards bigger fish.
FinTech Opens Doors to E-commerce
If there’s one thing we’ve learned from the pandemic and subsequent business disruptions, it’s that e-commerce businesses are much more resilient than previously thought.
By the end of 2021, there will be over 2.14 billion digital buyers, almost a third of the global population. And yet, over a third of U.S. SMBs don’t even have a website.
However, setting up a website and joining the e-commerce movement is easier today than ever in the past. Startups have plenty of e-commerce platforms to choose from, and fintech solutions enable seamless online payments that can reduce cart abandonment rates. You can use them to allow any kind of payment method that suits you (and your customers), including Bitcoin and other cryptocurrency payments.
FinTech Increases Security
Securing monetary transactions online and offline is critical for any respectable small business. A single glitch in the system, data leak, or cyberattack can cost you your reputation and clientele. Not to mention that you’d be exposing yourself to lawsuits and countless legal fees and penalties.
However, thanks to fintech, enhancing transaction security is affordable and effective. Fintech heavily relies on cutting-edge technology, and many companies embrace the benefits of blockchain to ensure the utmost safety of their payment systems.
Streamlined Mobile Payments
Younger audiences rely heavily on their smartphones, using them for everything from entertainment to education and shopping. For young entrepreneurs to appeal to this target market, they need to enable a seamless mobile experience and flawless mobile payments.
The biggest names in the fintech industry like PayPal, Payoneer allow for smooth mobile transactions worldwide. Your clients can use their Apple Pay or Google Wallet to purchase your products/services. You can rely on GoFundMe, powered by WePay, to collect or give donations using your smartphone.
Entrepreneurs Can Use FinTech Solutions to Gather More Customer Data
Collecting customer data is one thing, analyzing, understanding, and making it useful is another. Fintech companies can assist in making sense of Big Data and provide you with every piece of information you need on your customers’ shopping behaviors, past sales, product pages that attract the most traffic, and more.
Payment processing fintech can give you insight into consumers’ likes and dislikes, interests, hobbies, wants, and needs. Solutions like Square offer valuable engagement features like customer directories that show loyalty activity and visit frequency. Many fintech solutions offer marketing integrations, social media engagement tools, and more.
Conventional payment processing systems have none of these valuable insights and engagement features.
FinTech Simplifies International Money Transfers
Fintech solutions can cut costs and simplify worldwide transactions by offering fee-free international money transfers, payment acceptance, and foreign currency exchange. Their cybersecurity features and impenetrable encryption keeps user data protected and your finances safe and sound.
Simplified international money transfers can be beneficial for small businesses that often outsource services to global talents. You can streamline payrolls, bonuses, taxes, and more wherever your employees and contractors are located.
Fintech has quickly advanced over the past few years, offering exceptional services to individuals and businesses alike. Many in the fintech industry favor SMBs and customize their services to provide the utmost safety and convenience to young entrepreneurs, helping them grow and develop with ease.