US B2C Fintech Summer 2020 Snapshot

A quick look at consumer Fintech in the US - article originally appeared in Medium

I took a bit of time this weekend to update the B2C Fintech Tracker I have been maintaining for the last year or so. I also added in more detail that people keep asking about such as which banks are working with which brands and whether they are working with MasterCard or Visa.

I also wanted to encourage a more nuanced analysis of “challenger banks” as a sector. The narrative that all Neobanks are the same and that its a saturated market is clearly wrong — and yet this lazy trope is heard often and in media titles and by people who should know better.

This is not meant to be a complete and exhaustive study, the sector is moving so fast and new names are coming (and going) with extraordinary speed. We rely on the Fintech community for updating and adding to the spreadsheet. It is at least a different point of view and one that I have not seen much reported on. I hope you find it useful. All the data is here.

I looked at 3 things:

1. Visa or MasterCard — who is winning the battle to be the Network of choice for Fintech’s
2. Which product categories are showing the most growth
3. Segment focus — beyond the mass market
4. Which banks are backing the Fintech players

TLDR — Visa is winning — just, but in line with its US market share. Credit Cards have the newest players with High Interest/Savings/Cash accounts the least (due I suspect to the low historical interest rate). Whilst the mass market continues to dominate (Free ATM withdrawals! no fees! get paid 2 days early!) we see the emergence of new categories — social impact, kids, freelancers, immigrants/international and affluent. Finally — program banks — surprisingly its a very fragmented space with no clear winner by share- at least not yet.

Visa vs Mastercard

As you will see from the spreadsheet there are many companies that are showing a brand on their site but not listing an issuing bank and others who are not showing either a network brand mark or providing information on which issuing bank they are working with. We need to be careful in counting these as we know it's not uncommon to show a network brand only to end up working with the other one like this picture from Brex demonstrates!

Then

Now

Categories with the most growth

To understand where the most growth is we look at companies in waitlist as a % of total companies in each major segment of banking services. Credit Cards are clearly showing the newest company growth potential. This fits with our observations and also is the reason Unifimoney is working with Railsbank to create a Credit Card as a Service platform.

Segment Focus

When people talk of the Challenger Bank space being saturated they mean the mass market space and its difficult to argue with that fact. Its where the big brands like Revolut, Varo, Chime etc. These have championed a product proposition typified by zero-interest checking account, debit card, app and 2-day salary advance. But other segments are emerging.

But there are at least 5 other categories that are emerging:

Kids — Greenlight, Till and Copper

Social Impact — Aspiration, Givecard.io, Spiralbank, Goodmoney, Bemoney and Bank Purple

Affluent — Unifimoney, HM Bradley, Luxury Card, Virgil, Letter.io, Trykarat

Freelancers — Lili, Brightwell, Novo, Indi, Joust

Immigrants/International- Rayo, MyBamboo, Sable, Majority, Zenus

Program Banks

We identified 29 separate Program Banks — many companies are working with multiple banks, sometimes different banks for their deposit account and card issuance. We know this is not comprehensive and welcome better data to be added to the spreadsheet. However, with what we have we can see that there are a few program banks that are slightly ahead of the rest. The Bancorp, Web Bank, Evolve, Greendot, Metropolitan Commercial Bank and Lincoln Savings Bank.

I know from my own discussions with program banks there are many more out there and the amount of focus serving the Fintech community is increasing rapidly. We are seeing these banks investing in their tech, API’s and tools and process around migrating to becoming both a bank and a technology vendor.

This is only really a focus on a few categories that most closely correlate to “banking services”. I have not even tried to touch on other areas like investing and crypto. Although the boundaries are rapidly dissolving as re-bundling gains momentum.

We will continue to maintain and curate the spreadsheet if you feel like contributing please do!.

Please visit us at www.unifimoney.com