Top 4 Fintech Payment Innovations Disrupting Banking in 2024

Fintech, where finance meets technology, is quickly changing how we bank, including how we manage money, acquire loans, and even how we think about traditional banks.

The High Street bank has been a permanent fixture for centuries, but it will not be your first port of call for peer-to-peer payments or crowdfunding.

It will also not be your first port of call with a neobank, where everything happens on your smartphone or a web browser — sacrificing physical stores and bank tellers for the benefit of lower costs.

Sending money abroad instantly without paying bank fees or getting a loan approved in minutes instead of days — fintechs are making these things possible, as we explore below.

Table of Contents Table of Contents

1. Key Takeaways
2. Top 4 Fintech Payment Innovations Disrupting Banking
3. The Bottom Line
4. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Top 4 Fintech Payment Innovations Disrupting Banking
3. The Bottom Line
Show Full Guide
4. References

Top 4 Fintech Payment Innovations Disrupting Banking

4. Neobanks

Neobanks are digital banks without physical branches. They aim to offer faster, cheaper services and use technology to make things easier. You can open a checking or savings account and use a debit card from your phone or computer—perhaps not even bothering with a physical card.

Neobanks are popular because they’re easier to use, usually charge fewer fees, and sometimes offer lower interest rates on loans. People who like managing their money online often choose neobanks, and it seems to be working. The market size was valued at $98.40 billion in 2023, $143 billion in 2024, and is projected to grow to $3,406 billion by 2032.

One of the most successful examples of a neobank is Revolut, a UK-based fintech company that helps users manage their money with a simple app. Customers can use it to exchange money, send money to other countries, and buy and sell cryptocurrencies. You can also manage your money in different currencies, with little in the way of exchange fees or costs to using your card abroad.

Recently, Revolut received its UK banking license, which means it can do the same things as regular banks in the UK and compete better. This helped it reach a valuation of $45 billion, making it the “most valuable private technology company in Europe,” according to the company.

Still, Revolut has some downsides. For one thing, it doesn’t offer overdrafts, and some users complain about the lack of customer service.

3. Peer-to-Peer (P2P) Payments

Peer-to-peer payments are changing how we send money by making it faster and easier. They allow you to send money directly to someone using a digital app without having to rely on a bank.

With P2P payment apps such as Venmo or Cash App, all you often need is the other person’s email address, username, or phone number to send money.

However, while these payments are usually safe, only send money to people you trust. Always double-check that you’re sending it to the right person before hitting send, as it can be hard to get your money back if you send it to the wrong person.

However, it’s important to remember that you should only use Venmo for smaller transactions between friends and family as Venmo isn’t really set up for business use (except in certain cases).

2. Crowdfunding

Traditionally, if you wanted to create a new product or launch a new business, you usually had to ask a bank for money to get started. But getting a bank loan can be difficult, not to mention time-consuming.

Today, you don’t have to rely on a bank for a loan. Instead, you can raise money by asking people, even strangers who like what you’re doing, to contribute whatever they can to get your idea off the ground. This is called crowdfunding.

Crowdfunding lets people and businesses raise money directly from the public instead of going to a bank. They share their ideas online, and anyone who likes the idea can chip in some money. This way, they can collect the funds they need without dealing with the strict rules or long waits that banks usually require.

Even though crowdfunding isn’t replacing banks, it’s making people think about business startups in a new way.

Still, crowdfunding has some drawbacks. For one thing, you might not reach your funding goal. If you don’t, you likely won’t get any money. However, like applying for a bank loan, crowdfunding can be time-consuming as it takes a lot of work to promote your project and keep your supporters updated on it.

One example of crowdfunding is Kickstarter. Kickstarter is a website where you can ask for money to fund your creative project without having to go to a bank. If you have an idea for a new video game, for example, but you don’t have the money to make it happen, you can create a campaign on Kickstarter.

If your project reaches its goal, you will receive the funds to make it happen. But if it doesn’t, no one will be charged.

1. Open Banking

Open banking shakes up traditional banking by giving people more control over their money and, ideally, allowing them to use new services that offer better deals and more convenience.

Open banking lets you share your banking info with other trusted apps. For instance, you can connect your bank account to budgeting apps, payment services, or even other banks. This means you can manage your money across different accounts in one place, making it easier to track spending and save, and you can generally find better deals, such as higher interest rates on savings accounts or lower rates on loans.

Let’s say you want to get a personal loan. Traditionally, you’d have to apply to several banks and provide your financial information to each one separately.

Open banking, on the other hand, lets you compare loans easily. For instance, apps can look at your financial information from different banks (with your permission) and find you the best deal on a loan based on that information. As a bonus, it means you won’t have to fill out lots of applications anymore.

The downside is that open banking lets other companies see your financial information, which could be risky if data breaches happen.

The Bottom Line

Banking is a different world in the mid-2020s compared to the 2000s, and that is without bringing cryptocurrency into the mix. Technology unlocks quick, cost-effective ways to move money around, and neobanks, P2P payments, open banking, and crowdfunding are the outcome of that, making it faster, easier, and often cheaper to bank.

The competition also pushes banks to improve, which has to be a good thing for all of us.