What is the impact of Fintech on eCommerce?
- eCommerce, Finance 101

What is the impact of Fintech on eCommerce?

I am sure you must have heard of AfterPay, Quickbooks online, Zoho books, and Affirm; these are some of the top fintech companies willing to transform the space by incorporating eCommerce. So yes, imagine collaborating fintech and eCommerce can create a world like never before. 

At present, several banks and financial institutions are found to leverage various tools and software. So if we take a closer look, eCommerce and fintech have gained momentum. Speaking of which, I recently came across an interesting post that states. There is no doubt that technology integration in the financial sector is building a robust foundation for the fintech sector. Since fintech has commenced its services, so many industries have made the services streamlined. Also, many industries are impacted deeply by the introduction of Financial innovation businesses.

The following post focuses on how fintech and eCommerce are made in heaven and how to incorporate fintech solutions to boost your eCommerce store’s productivity and efficiency. So, without any further ado, let’s get started!    

Unlocking Fintech and eCommerce

Now everyone knows what eCommerce is, right? Anything bought and sold online is the simplest and most understood definition of the term eCommerce. However, the concept doesn’t show any signs of slowing down yet. Another trending and hot potato in the town is fintech. What is fintech – in simple words, it is derived by combining financial technology. The technology seems to have integrated among most financial and banking institutions and is no longer just used as a backup. The emerging technology-based solutions face the customers and provide them personalized solutions like never before. 

So yes, fintech will be found penetrating every small or large aspect of the financial industry sooner or later. It begins with banking, insurance, real estate, and healthcare, and today, eCommerce is a new rage. We have already witnessed how fintech has resulted in loan-making, business fundraising, crowdfunding, bitcoins, e-wallets, cryptocurrencies, mobile payments, etc.  

Slowly and steadily, financial technology seems to be penetrating deep into the thick walls of eCommerce. Yes, In fact, by now, it appears to have impacted in a great manner by altering and enhancing online payment systems. Gone are the days when a customer was always supposed to use credit cards or debit cards or their respective bank accounts as a compulsion. With the rise in fintech technology, several options have opened. And not just payment but even the concept of cross-border eCommerce seems to have gained momentum. 

Things have certainly become easy, especially after incorporating Dwolla, Stripe, WePay, and BlueSnap. Not to mention that these platforms have also enhanced efficiency and security. So when we talk about collaborating fintech with eCommerce, it means trying to make the online transactions as seamless as possible for the end-users. 

In fact, after incorporating fintech-based solutions, it has become possible to provide more payment options to the end-users irrespective of where they are and what device they are using. 

Do you think these solutions are created to make end-users feel at ease? Certainly not! Because nowadays, even online merchants have the privilege to use smarter options. After all, scaling up businesses in today’s fast-paced and competitive landscape is not easy as ABC. 

Now let us look at how fintech or these technology-driven solutions are dramatically changing the eCommerce industry?  

Common Yet Crucial Fintech Solutions Found in the eCommerce Space

#1 Consumer Financing

This one is pretty much in vogue, especially when combining eCommerce and fintech. With the rise of point-of-sale financings such as AfterPay, Affirm, and Klarna, it has become way easier for consumers to buy products and pay later. Moreover, one doesn’t have to pay as a whole; they can split the purchase into manageable installments. 

The later pay options work wonders when you tend to buy luxury and lifestyle brands, especially those with high-cost items. You can purchase the item at once but pay for it over a more extended period. I am sure you must have used credit cards? The concept is the same; the only difference is that consumer financing has become more flexible. You can buy whatever you want within your budget when you pay in installments.      

#2 Digital Banking

Another interesting concept is digital banking. At present more and more traditional banks are found incorporating these technological concepts. And you can see the difference by yourself. Consumers love the concept of managing banks online, depositing checks, transferring money, and asking for loans right by using their mobile devices. 

Many of you have the misconception that these technological solutions come with lots and lots of fees. And this generally happens because traditional banks invest lots and lots of amounts regarding infrastructure. After all, covering their costs is extremely important. 

Also, not to mention that traditional banks incorporate annual or monthly maintenance fees; not just that, it also requires minimum balance requirements and transaction limits, so yes, digital banking turns out to be pure bliss. 

So what are the perks of digital banking? 

    • In online banking, there is no point in walking into a physical location
    • Checking and managing accounts is possible via smart devices
    • Corporate cards or prepaid cards 
    • Minimal to no fees
    • No need for a minimum deposit 
    • High APY on business checking and savings accounts 

#3 Global Currency Exchange Solutions

This one is for sellers. At present, a seller’s job is not easy. They have to deal with overhead international money transfers and currency exchange. As a result, it takes a hell lot of time and cost. Not to mention that the fees of traditional payment processes can be pretty high. 

For instance, if you plan to pay $10000 to a supplier, it might cost $3000 for the transfer. In addition, costly and complicated procedures like these can deter brands and hinder them from scaling globally. 

So how to turn the table? Well, online sellers can turn to a fintech company, especially the one which offers: 

    • No hidden fees,
    • Secure an exchange rate for a fixed period
    • Setting up a local account to avoid exchange rates 

#4 Real-Time Payment Solutions

This is a tough reality; selling online means having your money tied up in long payment schedules. Several platforms such as Amazon and Walmart have started offering leverage to the customers from the moment they place an order to the day funds from that order are sent to your bank account. 

eBay officially announced a transition from PayPal to eBay-managed Payments by 2022. In addition, the Paypal working capital will no longer be considered an option. To receive money faster, sellers can start focusing on real-time payout solutions. All the payouts can be accelerated to a great extent. Hands down, real-time payment solutions are what it takes – no guesswork or angst is needed. 

#5 Accounting Software

Another advantage of incorporating fintech and eCommerce is that access to accounting software. Why accounting software? It enables businesses to automate bookkeeping and paperwork for payroll and payments. Some of the core advantages of using accounting software are: 

    • Affordable monthly subscription
    • Access via web 
    • Automate daily back-office tasks  
    • Save ample money with better operations
    • Direct integration with the marketplace      

Some of the best examples of accounting software include – Quickbooks Online, Xero, Freshbooks, Zoho Books, and the list. 

Final Thoughts

Now many of you are seen fearing the collaboration of fintech and eCommerce. Yes, to meet the unique demands of online sellers, one must come up with something never done before. Try reviewing your current business process and see where these technologies can be incorporated. After all, there will always be room for improvement. 

I hope the following post adds some value to your current business scenario. If you still have any doubts or queries, feel free to mention that in the comment section below. 

What is the Impact of Fintech on eCommerce?

Digital Marketing Strategies by Understanding eCommerce

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