Today’s technology allows us to work from anywhere – we are no longer tied to our desks in an office, and it’s becoming increasingly more common for employees and employers to be in completely different states. But technology is doing more than freeing us up to work wherever we need or want, it’s changing the very nature of the way we do business, both on a professional and personal level. Below are some ways fintech is altering our business landscape:
The way we pay. Ten years ago, there were probably few people who believed it would be possible to pay for purchases at a craft show or garage sale with a credit card. Or that small businesses could accept credit cards at reasonable rates. But now, Apple Pay and Android Pay have changed all of that, through apps that connect credit cards to apps on a customer’s smartphone that allows payments to be made using NFC technology. Similarly, devices such as PayAnywhere are allowing small merchants to accept credit and debit card payments anywhere without relying on a static point-of-sale system. These new ways to pay – and accept payments – have opened commerce doors that didn’t exist a decade ago.
The way we borrow money. In the past, whenever you needed to borrow money, whether as an individual or as a business, you went to a bank. You were pretty much at the mercy of the bank’s loan officer as to whether you got the loan or not. And if your credit was just a little bit south of perfect, you could expect to pay high interest rates, if you got the loan at all. Thanks to crowdfunding sites like GoFundMe and merchant cash advance companies like Capital for Merchants, that is no longer the case. Crowdfunding allows individuals to receive friends, family or even total strangers to help fund anything from funerals to vacations, and in practically any amount. Merchant cash advances provide small to mid-size businesses with working capital so they can expand, purchase more inventory, buy new equipment – whatever the business needs. Funding is fast and payback terms are generally straightforward, either in the form of a percentage of daily sales or scheduled debits to a designated account. In both situations, no bank is needed.
The way we plan for retirement. Traditionally, when you wanted to start planning for your retirement, you’d need to see a financial planner, who would help you choose the best mutual funds in which to invest that would give you the best return on your investment. Today, a group of startup financial services are taking investing straight to the investor. They allow you to easily take money out of your account and transfer it into a mutual fund of your choosing. If you’re consistent about doing this every week or every month for the next few decades, you should have a nice not-so-little nest egg when it’s time to retire. These companies are usually backed by big-name investment firms like Fidelity or Vanguard, so they are not completely free, but anything that gets you investing in your future is a good thing.
The way we bank. While the days of the neighborhood bank where you keep your checking and savings accounts, and perhaps even your ATM and credit accounts are not gone, many people are turning to internet-based banks, many of which have no physical branches. These banks often offer perks such as free checking, have many of the same services and amenities as brick-and-mortar branches, plus they eliminate the need to transfer banks if you move to a new neighborhood. They do have some drawbacks – since there is not likely to be a branded ATM machine in your area, you will pay ATM withdraw fees, and payments may take longer to post. For those who still like to go to a brick-and-mortar branch to conduct their business, the good news is many of these banks are getting tech-savvy too, with apps that allow you to check your balances, transfer money between accounts and make payments any time of day.
Thanks to the recent advances in fintech, individuals and businesses are able to take charge of their own finances like never before. With crowdfunding, mobile payments, merchant cash advances, and online banking and retirement funding, everything can be done in front of a computer screen. Don’t discount the human interaction you can get from becoming friendly with your neighborhood banker – despite the convenience fintech provides, you never know when you may just want to talk to a financial expert in person.