Fintech leads as Electronic Payments International lists the top five terms tweeted on payments tech in Q4 2021 based on data from GlobalData’s Banking & Payments Influencer Platform.
The top trends are the most mentioned terms or concepts among Twitter discussions of more than 150 payments tech experts tracked by GlobalData’s Banking & Payments Influencer platform during the fourth quarter (Q4) of 2021.
1. Fintech and Financial Technology – 4,118 mentions
The increase in demand for advanced mobile banking apps, the factors hindering bitcoin’s acceptance as a universal payment method, and a surge in financial technology company PayPal’s buy now, pay later (BNPL) payment transactions were some of the popular topics of discussion in Q4 2021.
Jim Marous, owner and publisher of Digital Banking Report, a website focused on financial services, shared an article on the increase in demand for advanced mobile banking apps from consumers to ensure fast and secure transactions. Research conducted by US-based Citizens Bank has revealed that 40% of consumers choose their banking partner based on the mobile and online banking services offered. Furthermore, a survey conducted by a market research firm revealed that 87% of adults in the US use their mobile to access their checking accounts. The survey also found that the top features that consumers want in their mobile banking apps include security and control that enable the monitoring of their social security number and easy debit card replacement. Consumers also wanted other features such as electronic transfers, providing alerts in case of an overdraft, account management, digital money management and customer service.
In another tweet, fintech advisor and writer Chris Gledhill shared an article on the factors that are hindering the adoption of bitcoin as a universal payment method, according to Marion Laboure, research analyst at Deutsche Bank. A survey conducted by the bank revealed that out of the 60% of customers who hold bitcoin, just 0.28% use it as a payment method. Bitcoin transactions, therefore, accounted for less than 2% of the bank’s total transaction volume. Laboure highlighted that the slow speed of transactions, lack of security, high transaction costs and high volatility of bitcoin are the main reasons behind the low adoption rates of the cryptocurrency as a payment method.
The terms were also discussed by Theodora Lau, founder of consulting services provider Unconventional Ventures, in an article on PayPal’s BNPL transactions surging by 400% year-on-year in November. The surge was mainly due to the payment flexibility offered by PayPal’s BNPL programme without added costs, and increased use by customers during the holidays. Furthermore, consumers used the service to avoid paying interest towards credit card. PayPal’s BNPL, however, comes with the risk of overspending. Consumers may use the service to spend more with limited oversight. Experts have called for the regulation of BNPL products, which has been welcomed by some providers despite the risk of decline in revenues, the article highlighted.
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2. Cryptocurrency and Crypto Currency – 1,377 mentions
A survey that revealed that millennials prefer to get paid in cryptocurrencies, the launch of cryptocurrency payments pilot by instant messaging service provider WhatsApp, and the threat posed by quantum computing to cryptocurrencies were among the popular discussions in Q4 2021.
Brock Pierce, an entrepreneur and venture capitalist, shared an article on a survey conducted by financial advisory services firm deVere Group, which revealed that more than one-third of millennials and more than 50% of Gen Z prefer to receive 50% of their salary in Bitcoin or any other cryptocurrency. Furthermore, another survey conducted by comparison platform Bankrate found that more than 50% of millennials are comfortable with investing in cryptocurrencies. The survey revealed that 12% view investment in Bitcoin or any other cryptocurrency to be safe. The growing confidence in Bitcoin has led some analysts to predict that the cryptocurrency may reach $150,000 in the future, the article highlighted.
In another tweet, Chris Gledhill shared an article on a new cryptocurrency payments pilot launched by WhatsApp in the US. Powered by technology company Meta’s digital wallet Novi, the service will enable payments to be made in Pax Dollars (USDP), a stablecoin that operates on the Ethereum blockchain and matches the value of the US dollar. Pax Dollar is issued by financial technology and technology company Paxos Trust Company. Payments through the service can be made similar to sending an attachment and do not involve any charges or limits on the frequency.
Alex Jiménez, a consultant and fintech influencer, share an article on how the blockchain technology that powers cryptocurrencies may be vulnerable to attacks if quantum computing matures. Cryptocurrencies are protected by public-key cryptography, which can be cracked by quantum computers as they become more advanced. Quantum computers, therefore, pose a serious threat to cryptocurrencies, some of which are valued at billions of dollars. The threat posed by quantum computers can be addressed by using post-quantum cryptography technology that is currently being developed. Quantum computers may also pose a threat to hashing or digital fingerprinting technology used by cryptocurrencies, although simple technology updates can address the issue, according to the article.
3. Open Banking – 673 mentions
Financial services firm Mastercard’s report finding that consumers are adopting open banking, Australian neobank Volt collaborating with open banking intermediary Frollo, and lack of regulatory framework hindering the adoption of open banking in the US, were some of the popular discussions on open banking in the fourth quarter of 2021.
Spiros Margaris, founder of venture capital firm Margaris Ventures, shared an article on a new report from Mastercard titled The Rise of Open Banking, which revealed that consumers are increasingly adopting open banking services. The report highlighted that 90% of younger consumers are linking their bank accounts to open banking services such as online and mobile financial applications to manage their money and pay bills. Furthermore, the report found that 59% of respondents in the US and 55% of respondents in Canada are confident while using technology to manage their money, the article highlighted.
Another discussion on open banking was shared by Faisal Khan, a payments specialist and crypto advocate, on Volt’s partnership with Frollo to launch a banking-as-a-service (BaaS) app, which will be integrated with its main banking services. Broker group Australian Finance Group is the first customer to launch the app under the Handl. by AFG brand, which is available to 125 brokers initially and more than 3,000 brokers by early 2022. Customers of the broker group can access and manage various services through the app including AFG home loan products, Volt savings account, and Volt debit card.
Open banking was also discussed by Tolga Tavlas, a fintech influencer, who shared an article on the lack of regulatory framework impacting the adoption of open banking in the US. Several companies in the US have brought significant innovations in the payment systems, but the lack of regulations governing data portability is preventing the launch of such innovations. The US does not have regulations such as the General Data Protection Regulation (GDPR), which enables customers in Europe to shift between different providers within the financial services industry. The issue of secure data access and authentication is being discussed by policymakers in the US and requires more participation from small and medium banks rather than just major banks and tech companies. The aim of the discussion should be to develop a financial system that provides customers with greater choice and flexibility, according to Steve Smith, CEO and co-founder of open banking solutions provider Finicity.
4. Inflation – 133 mentions
Turkey drafting a new crypto law to protect the national currency, and inflation not being transitory as claimed by regulators, were some of the discussions on inflation in the last quarter.
Brock Pierce shared an article on Turkey’s President Recep Tayyip Erdogan’s plans to pass a new crypto law in the country’s parliament. Bitcoin and other cryptocurrencies have gained traction in the country as consumers adopted them to address the high inflation rates. The surging acceptance of cryptocurrencies, however, is impacting Turkey’s national currency lira, whose value dropped to record low levels against the US dollar. President Erdogan aims to bolster the lira by passing the law although regulators have highlighted that they do not plan to ban cryptocurrencies in the country.
Inflation was also discussed by Nicolas Cary, co-founder of cryptocurrency financial services company Blockchain.com, who shared an article on Federal Reserve Chairman Jerome Powell requesting that the term transitory used to describe inflation be retired from use. Powell stated that inflation will remain for the foreseeable future. The article highlighted that Powell’s statement reminds of cryptocurrencies such as bitcoin, which are often viewed as a hedge against inflation and also considered as non-transitory. Cary tweeted that consumers should brace for the growing popularity of cryptocurrencies and continue holding them.
5. Venture Capital – 120 mentions
2TM, the holding company for crypto exchange Mercado Bitcoin, raising funding in a Series B funding round, and Asia-based venture capital firms and crypto hedge funds planning to invest in the development of a new blockchain called Assembly, were some of the popular discussions in Q4.
Spiros Margaris shared an article on 2TM raising $50.3m in a second closing of its Series B funding round that included participation from crypto-focused private equity firm 10T and venture capital firm Tribe Capital. Mercado Bitcoin raised $200m in the first closing of the funding round led by the SoftBank Latin America Fund. 2TM plans to use the funding to expand its operations in Latin America, Argentina, Chile, Colombia and Mexico, the article highlighted.
In another tweet, Faisal Khan shared an article on Asia-based venture capital firms and crypto hedge funds planning to invest $100m in the development of applications based on a smart contract blockchain network named Assembly. Launched by Berlin-based research and engineering group IOTA Foundation, Assembly is part of the IOTA network, which is a distributed ledger network. Assembly will mainly support decentralised finance (DeFI), non-fungible tokens (NFTs), and cryptocurrency games. The venture capital and investment firms that are planning to invest in Assembly include LD Capital, Huobi Ventures, UOB Venture Management, and Du Capital.