Not too long ago, if you wanted to do any banking or investing, you had to either visit a sticks and bricks facility or you had to pick up the phone and speak to another person. Now you can deposit a check with your phone, hop on your laptop or tablet to pay bills, and buy stocks via an app. Fintech, or financial technology, has made acting on your decisions about your money much simpler and faster.
1. Pairing Sticks and Bricks with Convenience
Can you still pay your bills via a paper check? Of course! However, those who avoid using online banking tools such as bill pay because they fear a data breach may be mistaken. The internet has greatly reduced the security risk of transmitting money. If someone tries to get into your bank account online, the bank will likely lock your account down immediately and send you a fraud alert. If someone steals your utility payment check out of your mailbox, they have a lot of your information, including your signature, and can make a lot of mischief that you may not know about until you get a notice of non-payment from the utility.
2. The Rise of Credit
Many of us pay for a lot of our lives with credit cards. Simple apps such as Square make it possible to turn your phone into a monetary collection center. Whether you’re a small business owner hoping to collect payment for your services and products quickly or are trying to fundraise at a special event, having a Square reader and account makes you part of the fintech revolution.
3. Expanding Slowly is Fine
There are many sources of fintech news that can reduce discomfort if you’re not sure about all of this convenience. However, it’s important to remember that electronic money exchange is simply an extension of paper money exchange. It’s new and different, but it’s not necessarily revolutionary. The revolution occurred generations ago when we stopped bartering goods and started exchanging agreed-upon values on paper.
4. The Power of Group Funding
There was a time when banks were the only place that you could get a loan unless you knew someone with the cash to lend it to you directly. However, the bank method of lending; that is
- to pool savings from many people and
- lend it to others and
- collect interest, which can increase the balance of the original savings accounts
has moved online. While there are ways to donate to folks working on great causes, such as Patreon, there are also terrific ways to tap into investors who are looking to lend to startups. Crowdfunding is bypassing traditional lenders with great results.
5. Fintech as a Method of Money Management
In addition to making payments, investments, and donations, the right fintech app can also help you save money. Budgeting apps are growing in popularity and helping people who’ve struggled to put together a pen and paper budget to better manage their expenses exactly where they are.
Previously, budgeting meant that you had to track your spending, plan your expenses, and note your successes and failures at home, either via an expense log or the envelope system. With budgeting apps that live on your phone, you can manage your spending on the go. Your account balances are easily accessed for up to the minute decision-making about your next purchase.
The Truly Revolutionary Aspect of Fintech
The world of cryptocurrency is the ultimate outgrowth of mobile financial technology. The ability to trade on exchanges including Coinbase makes it possible for those interested in cryptocurrency to learn more about this exciting method of growing your money. You don’t have to be a miner to trade cryptocurrency and benefit from the lucrative run-ups of this currency. However, it is a new method of exchange and decentralized. As you learn more, you may feel comfortable investing more dollars into the exchanges. Follow your own risk tolerance to reduce your investment stress level.
The world of money is constantly expanding, and fintech is making it easier to trade, save, spend, and invest your dollars. However, with the expanded use of credit, it’s possible to get in over your head very quickly. As with paper dollars, tracking where your money is going is critical to protecting your financial future.