Fintech transactions to touch $324 billion by 2026 – New Telegraph
The global financial technology market is expected to grow gradually and reach a market value of approximately $324 billion by 2026, growing at a compound annual rate of around 25.18 percent over the forecast period 2022-2027, a report by Market Data Forecast revealed. In fact, the total transaction value in the digital payment in Nigeria, the United States and other countries has been estimated to reach $8,488.00 billion before the end of 2022. The average transaction value per user in the Alternative Finance segment is estimated to amount to $27,100.00 in the same year as digital payment is estimated to be the largest financial technology (Fintech) market segment worldwide.
According to a report by a global research platform, Statista, the neobanking segment is expected to show revenue growth of 42.2 percent in 2023. In the digital payment segment of fintech, the number of users is expected to reach 5,480.33 million by 2027. The body stated that due to of the large differences in the KPIs of FinTech products, e.g. different nature of loan origination volume in alternative lending compared to Assets under Management in Robo-Advisors, no total transaction value for all segments can be calculated. Fintech relates mainly to small start-up companies, which develop innovative technological solutions in areas such as online and mobile payments, big data, alternative finance and financial management. About 70 percent of senior banking executives said that working with fintechs and bigtechs to create a new service was an important opportunity for banks. Globally, the value of investments in fintech companies amounted to approximately NOK 112 billion in 2018, which was a record high for the sector. The annual value of global venture capital investment in fintech companies is increasing. It doubled between 2017 and 2018, although it fell slightly in 2019. The global growth of fintech depends on the growth of individual markets, which are very different. As of February 2020, North America was the most popular location for fintech startups. However, fintech adoption rates in various financial sectors show that US consumers are lagging behind Chinese consumers. The quarterly worldwide value of investment in fintech peaked in the third quarter of 2019, with a deal value of $146 billion. The value refers to both venture capital, private equity and M&A investments, and in the fourth quarter of 2021, the investment volume reached $39.9 billion, which was the lowest quarter of that year. The total value of investments in fintech companies worldwide increased dramatically between 2010 and 2019, when it reached $213.8 billion. In 2020, however, the fintech companies saw investment fall by more than a third, reaching a value of $124.9 billion, but the investment value increased again in 2021 up to $210.1 billion. The Americas was the region attracting the most investment in the sector, accounting for almost 80 percent of the total. The fintech ecosystem in Nigeria is largely comprised of businesses focused on mobile payments, digital banking, commerce solutions and personal finance, including wealth technology. Overall, Nigeria has experienced a remarkable performance in the fintech market, marking an improvement from 2020, when COVID-19 hit. Data from the Nigeria Inter-Bank Settlement System (NIBSS) reveals that the transaction value of instant payments reached N241.7 trillion between January and November 2021, compared to N137.9 trillion processed in the same period the previous year.
With the influx of investments reaching new levels and an influx of innovative product features, fintech has contributed a lot to Nigeria’s economy until 2022. Collectively, Nigerian startups are said to have received a total of about $903.7 million, which was 51 percent above the inflow of the previous year, when Nigeria came second on the continent with a total of $150.4 million. In 2021, Nigeria received 42.1 percent of the total financing secured in Africa. Of the total amount raised by Nigerian startups in 2021, fintech startups raised a total of $536.7 million, a share of 59 percent of the total amount raised by all startups in the period under review (The African Tech Startups Funding Report from Disrupt Africa, 2021). The year 2021 also witnessed three Nigerian startups – Flutterwave, Opay and Andela – reach a valuation of $1 billion and achieve unicorn status. Notably, Flutterwave achieved a valuation of $3 billion in February 2022, ranking as one of Africa’s most highly valued startups.
