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FinTech, short for financial technology, is the 21st century’s industrial revolution that is pushing for a complete overhaul of our financial system. The new wave of digitization with smartphones, online banking, and cryptocurrency is expanding their banking to more people around the world. The financial technology companies are both new and have an already established business network working to better the use of financial services provided by all companies. Now they are coming out with new debit cards which are easier to use more secure and even operates without a balance.
One of the biggest trends seen today is the expansion of digital banking with new debit cards. FinTechs are now creating secure debit cards for consumers to spend their money directly out of their digital accounts. This is aimed more at the young and engaged clientele that is more tech-savvy than the older generation, making their new debit cards and accounts aligned with their views. Statistically, 75% of bank customers ages 18-35 are more likely to use a new FinTech product than people over the age of 35. SoFi allows users to see all their account details in one viewing while Square works with other vendors to offer rewards similar to a credit card. It follows the trend of debit cards being responsible for more payments than cash and credit card by consumers.
Companies who work in P2P money transfers, wealth management, and lending are all running to make alternatives to check accounts within their existing system. Acting like a debit card, this tracks and monitors the money being transferred in and out, and are seeking to convert monthly users into daily transactors. FinTechs are also going around banking regulations to work in making one of their new debit services without taking any deposits. By going around the banking regulations, they are actually making themselves free to try out all ways to make a new debit spending card.
For instance, the square cash card is a prepaid debit card that lets users spend the balance already there. Through bank transfer, direct deposit, or in-app P2P exchanges, the balance cash is raised.
Venmo’s own debit card allows users to instantly have access to their funds without the need to cash out through a bank account. These transactions with the card will be funded only by the Venmo account balance. To prevent a low balance, Venmo has automatic reload to the card when the amount falls below a preset amount. Then, there is the PayPal cash card, which lets users spend their money directly from their PayPal account. Compared to Venmo, if a user’s PayPal amount is short to pay for a purchase, then it will be declined.
These new debit cards and the digital accounts are the new trends people will follow as we enter the 2020s. This is not yet another social media trend, but a basic financial segment that seeks to rope in everybody from every country involved. FinTech companies are jumping ahead with these new physical and digital cards to reflect the future and beyond, which are concepts far removed from the traditional debit and credit cards we use today.