The payments industry is witnessing major acquisitions these days. Acquisitions make complex processors even more complex. Where can you get the necessary fintech business loan to grow your business successfully and navigate through hard financial times? This article is here to help you with that.
Consolidation: Payment Incumbents & FinTechs
Consolidation is quite natural in a declining economic environment among banks. It’s been the natural course in the space for as long as there’ve been banks.
Let’s concentrate on what’s happening in the payments space. Well, Jeff Yabuki and Frank Bisignano, Fiserv’s and First Data’s CEOs, state that within 5 years, they’d deliver a staggering $900 million and $500 million in annual cost synergies (each). FIS’ CEO Gary Norcross and CFO Woody Woodall talk about $400 million and $500 million of cost and revenue synergies respectively within 3 years.
The processing giants have been acquisitive. With years, they made complex delivery systems and operations more rational. However, the mentioned 2 combinations don’t have much business overlap. Each of them has a US debit network and issuer processor, and their consolidation isn’t going to generate the promised cost synergies with exact precision.
As you may have noticed, competition is intensifying in the payments industry. Branded retail payment networks featuring critical mass are businesses to go for. When it comes to credit card issuer processing, it’s a marketplace that requires overcoming high entry barriers as well. Acquiring is a natural, extremely competitive market that’s witnessed a number of innovative new companies that’ve entered from around the globe.
Overall, the most striking synergies of the enormous mergers would be the result of the control of a greater part of the payments ecosystem.
Modern Payments Ecosystem: FinTech Business Loan
The traditional banking space seems to be in its weakest state in almost 100 years in a recovery period. However, this doesn’t mean the end of the world for you, as a merchant. Your chances of getting approved for business financing are greater than years ago. This is all thanks to reputable alternative online lenders like FirstAmericanMerchant.com.
First American Merchant is a BBB-accredited and award-winning business funding provider and processor that offers the lowest rates for exceptional financing solutions such as a fintech business loan. FAM specializes in the high risk field and works both with low risk and hard-to-approve merchants who need quick and easy access to working capital.
Apart from what’s been mentioned above, the payments ecosystem is witnessing other major developments as well. E.g., AI in fintech has to do with the theory and development of computer systems that have the capacity to carry out finance-related tasks that, as a rule, can’t do without human intelligence.
On the whole, the growth of eCommerce and digital transactions has put enough pressure on broad-based financial IT companies such as FIS and Fiserv and made them enlarge processing technology. Now, fintech companies are likely to inflict pain in the banking area. It’d be better for acquiring banks to be sure their targets haven’t been removed by the fintech’s troublesome invasion.