The x-border payments fintech market is massive. Currently, banks control around 75% of the total transaction volume, but they are steadily losing market share to fintech companies. In this slide presentation, we analyze the growth of x-border fintech, examine recent M&A activity, and explore the various business models within this space.
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General Commentary & Highlights
- Global x-border payments is a sizeable market. Today banks process c.75% of the volumes but continue to lose share to fintechs at pace.
- Fintechs have built strong ‘front-end’ propositions and ‘back-end’ rails to better serve consumers and businesses.
- X-border payment fintechs continue to demonstrate strong growth momentum globally, and we observe fintechs winning across all segments (C2C, C2B, B2B and B2C/B2B2X).
- Recent macroeconomic headwinds have led to some investor anxiety and underperformance of fintech stocks in public markets (e.g. Wise, Remitly, D-Local, Flywire), although the sector fundamentals remain strong.
- Strong signs of consolidation evident in the sector. M&A activity in the space has been intense, with several transactions unfolding in recent times.
- Fintechs serving emerging markets provide green field opportunities for value creation.
- The x-border fintech space is not homogeneous – we observe several fintech business models serving consumers & businesses in a B2X and B2B2X capacity.
Please do not hesitate to contact Anupam Majumdar at Anupam@FlagshipAP.com or Pedro Giesta at Pedro@FlagshipAP.com with comments or questions.
