There is an outstandingly large community of over 10,000 FinTech startups operating around the world – shedding international borders[1], democratizing remittances in the name of inclusion[2], facilitating inclusion through economic identity on the blockchain[3], and a lot more[4].

The FinTech startup community is very diverse and rich in ideas and solutions. We track around 50 FinTech sub-segments into which the 10,000+ startups fall, but there are only two categories continuously at the top of their game in terms of capital saturation and entrepreneurial activity – lending and payments. And no wonder. The role models – Stripe, Square Cash, PayPal, M-Pesa, Alipay, and Venmo – opened the floodgates into the world of social payments and efficient e-commerce, demonstrating opportunities that technology brings into this segment. Let’s just look at PayPal’s 2017 operating results[5] for some numbers:

  • Active customer accounts of 227 million, up 15% with growth of 29 million net new actives

  • 7.6 billion payment transactions, up 24%

  • $451 billion in total payment volume (TPV), up 27% both on a spot and FX-neutral basis

  • 33.6 payment transactions per active account on a trailing twelve months basis, up 8%

Once the way was paved and proven to be lucrative, enthusiastic entrepreneurs knocked down a lot of VC doors to launch the next best thing in payments. In fact, within the payments segment, mobile wallets/payments represent the largest pieces of the pie – over 30% of the companies, according to MEDICI data.

For a brief moment there, the bank-FinTech narrative[6] was in the stage of the perceived competition and winner-take-all attitude. But the narrative evolved, and institutions went through a rich stage of exploration, collaborative relationships, and extensive learning when partnerships were formed and startups acquired. As we have entered the stage of the Hybrid strategy[7], an interesting process is gradually taking place around the world in some of the most advanced economies.

While banks were not as fast in making decisions and getting their hands dirty as startups had a luxury to do for a long time, what really matters in the payments sphere is the endgame. That is because payments is the area where the ever-increasing granularity of the market is not in the interest of any party involved. And in certain nations, banks are ready to take over the innovation race with a radical response to traditional payments rails – Visa and MasterCard, for example – as well to the diverse startup ecosystem in this popularized segment.

Four national banking ecosystems are ahead of the world with their approach to changing the rules of the game in payments – US (Zelle), Australia (NPP), India (UPI by

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