The payments sector is heating up still. We’ve noted in the past how innovative companies like Square have entered into the cryptocurrency sector in a meaningful way. Companies backed by giants like Softbank, SoFi, Robinhood, and others have deployed crypto trading products too.
The trend is likely to keep growing, and more fintech companies are expected to enter into the field.
But fast-moving startups and fintech firms aren’t the only ones aiming to make a difference within the world by capitalizing on the rapidly rising cryptocurrency sector.
Further, we’ve noted how large banking giants such as JPMorgan, Wells Fargo, and others have stepped into the sector and experimented with their blockchain-based initiatives.
Both fintech firms and large banking corporations have only dipped their toes into slightly into the sector. They haven’t fully delved into the cryptocurrency sector by allocating a bulk of their resources to this disrupting technology. It makes sense; they want to stick to their core offerings, continue to monetize, scale-up, and diversify as necessary.
This presents a substantial opportunity for growth-oriented firms who seek to capitalize and do more with these fascinating technologies.
Let’s take a look at some of the recent initiatives by recent entrants.
Stripe and Its Investments in Cryptocurrency
Stripe is a payments company that caters to merchants and e-commerce companies. It put forth innovative offerings that range from Stripe Capital, a lending service for its customers, to a Stripe Corporate Card, and Stripe Billing. Further, we know Stripe is rapidly innovating on instant payouts, has Stripe CLI, and is becoming a more global company.
It recently conducted a financing round is likely to hold an initial public offering soon.
But what of its cryptocurrency affiliations?
Stripe and Bitcoin
Stripe forayed a tad bit into the cryptocurrency industry by announcing support for bitcoin in about 2015. The company saw the promise of bitcoin and decided to understand more about the digital asset. Stripe chose to experiment with it firsthand. Unfortunately, the company stopped supporting bitcoin payments due to a host of issues.
The fintech firm noted in 2019 that it would possibly support Stellar or XLM on its platform due to its unique features. XLM would spike on the news, but Stripe has yet to move on this integration. Stripe is still researching Ethereum and other cryptocurrencies that might be useful as payments over the long-term. In the meantime, the entity is investing and associating itself with entities within the crypto sector. As such, it can stick to its core operations, continue to grow, and make the best decisions while having exposure to the innovative cryptocurrency market.
It recently invested in a digital payment’s platform called Rapyd.
Rapyd is one company that’s received substantial support from companies like Stripe as well as other financial firms.
The Rise of Rapyd
Rapyd raised more than $30 million in the first half of this year.
Its private equity investors seem to think that this is a firm that is worth investing in for the long-term, and several have increased their allocations.
Rapyd, an Israeli company, just raised more than $80 million in its latest funding round to compete against the emergence of stablecoins.
Prominent names like General Catalyst and Tiger Global, are also associated with this firm and have participated in several rounds.
But why is this firm so compelling and exciting? Why are several financial firms investing in this company?
Its improving finance in multiple ways, but one of the ways it might capture substantial value is through its non-stablecoin solutions.
A representative of the firm noted:
“With this new investment, the company will continue to build out its unified cloud-based technology platform that helps businesses quickly integrate Fintech and payment capabilities into any commerce application. The funding will also be used to further build out the Rapyd Global Payment Network that helps businesses expand in local and cross-border markets by reaching more than four billion consumers with a broad range of local payment methods beyond credit cards. Rapyd is paving the way for the growing global wave of Fintech and commerce modernization being undertaken by e-commerce merchants, gig economy platforms, financial institutions, and technology providers looking to enable highly localized customer experiences.”
One critical component of Rapyd is that it aims to minimize and negate the need for credit cards. That’s a powerful vision as credit card usage contributes to a significant portion of sales across the world.
The company further notes that difficulties that exist within the world regarding payments.
It states, “as more than half of all transactions worldwide are facilitated via bank transfers and cash, merchants find it increasingly difficult to digitally enable local payment methods and process cross-border sales that are required for international expansion.”
Rapyd notes that the challenges are present in countries besides the United States due to a lack of infrastructure, trust, or technical efficiency. Regulations in various nations also play a vital role in the slow growth and adoption of critical, innovative payment methods.
We should be clear that the company does not work with cryptocurrency at the current moment but does serve as a platform that might power substantial change within the financial world.
The cross-border niche is one that is comprised of a horde of competitors.
Cross border transactions are a process filled with great friction and several companies have grown to meet the demand, Ripple, Stellar, and few others are just a few.
Further, IBM also works with the Stellar blockchain to facilitate cross border payments and have started to test out different stablecoins for different countries.
IBM is just one of the large multinational corporations that fit within this sector. JPMorgan Chase Bank has its various initiatives involving Quorum, and Wells Fargo is working on its respective blockchain-based cross border solution.
Finally, we know that Libra is one other initiative spearheaded by Facebook that has gained much traction yet faces many regulatory hurdles. The firm acts as a platform that works with regulators across the globe (with physical holdings and partnerships in each area) to be compliant and efficient.
The ZB Take
Globalization needs further payments innovation in fiat and cryptocurrency. More innovations are still necessary and cryptocurrency market players might be a big part of this growing trend.
About ZB Group
ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.
ZB Group also includes ZBG the innovative crypto trading platform, and BW.com, the world’s first mining-pool based exchange. Other holdings include wallet leader BitBank, as well as exchange brands ZBM, ZBX and Korea’s Bithi.
Industry intelligence and standards are headed by the recently launched ZB Nexus who embody the core values of ZB Group and open source their reports and analysis for the public.
Learn more about ZB Exchange by visiting www.zb.com.
