Third-quarter earnings results and a European bank launch show where FinTechs are finding room to expand. Existing customers are taking up more products and sending more payments through providers they already use, while a digital bank tested its offering locally before opening in a new market.
More FinTechs are waiting to see evidence of demand before they launch a product. The next spending decision comes once they have it. A lender with customers opening additional accounts, a processor handling more of a merchant’s payments and a bank preparing to enter another country each have a different reason to invest. The returns depend on whether the demand they observed holds as they commit more money.
The PYMNTS Intelligence report “FinTechs Want In: How Credit Unions Can Turn Partnerships Into Growth” found in September that 60% of surveyed FinTech executives described their firms as quick followers, meaning they wait for evidence of consumer demand before launching. That was up from 37% in November 2023. Over the same period, the share that described themselves as early launchers, releasing products ahead of confirmed demand, fell from 26% to 3%. The report put the April findings in the context of six survey waves. The latest wave included 100 FinTech executives.
Selling a second product starts with a customer the company already knows. SoFi said in its third-quarter earnings results that existing members accounted for just over half of new product openings, PYMNTS reported Oct. 27. An earnings press release put the figure at 51%, while products per member rose to 1.56 from 1.47 a year earlier. The number of openings tells a FinTech which offers customers are willing to take up. For a bank account, balances and transaction activity show whether these customers are moving any of their regular banking to the provider.
Chime is also getting members to use more of its services. Bundling products through Plus and Prime encouraged new members to adopt savings and borrowing products sooner, PYMNTS reported Wednesday (Nov. 4). Prime members generate more than twice the revenue of the average active member, and management attributed much of the roughly 30% quarterly increase in Instant Loans originations to Prime. That expansion also brought higher credit losses as more Prime members borrowed for the first time.
Payments processors see demand in transactions. A merchant already using a processor can route a larger share of its payments there or add another sales channel. Adyen’s quarterly business update attributed growth to a greater share of existing customers’ payments, new enterprise merchants and the inclusion of two acquisitions. Its plan to add 1,000 to 1,100 full-time equivalents in 2026 includes those acquisitions.
What Has to Work Before a Wider Rollout
A new market calls for evidence that a product fits how people already bank and pay there. Monzo worked with early personal and business customers in Spain before its October launch. The bank opened with Spanish account numbers and access to Bizum, the local mobile payments service.
Selling through financial institutions introduces a different cost. Among FinTechs already serving credit unions, 56% cited complex procurement and 54% cited slow decisions as obstacles, according to the PYMNTS Intelligence research. Among providers hesitant to enter that market, 58% said a single onboarding process covering multiple institutions would make them more likely to pursue partnerships.
A provider can face separate reviews at each institution even when it is selling the same service, PYMNTS reported Oct. 14.
