Why Neobanks and Fintech Should Offer Cryptocurrency Investments

Fintechs and neobanks are increasing in popularity, and cryptocurrency is along for the ride. In the first quarter of 2021, Bitcoin reportedly reached 400,000 daily transactions. With this, more commercial retailers are beginning to accept cryptocurrency as a valid payment method.

Demand for cryptocurrency services is expected to grow over the coming years. This will open up a gap in the market that neobanks and fintech can fill by allowing crypto trade. Below, we look at reasons why crypto service demand is growing and what benefits fintech companies will see by offering the trade option.

Why Is Crypto Demand Growing?

Thanks to the global pandemic and issues surrounding central banking systems, a perfect storm for growth is happening. Through traditional trading avenues, investors face 0.01% interest rates from banks alongside stale bonds. So, to overcome the issue, more people are turning to the power of crypto to bypass the middleman and reap more rewards. Further, we’re not only seeing everyday investors adopting cryptocurrency, with Blackrock heavily investing in the future of Bitcoin. According to Blackrock CEO, ‘Bitcoin can help solve issues faced throughout the global pandemic, eventually making traditional currency obsolete’. However, we’re a long way off that mark.

Since 2020, more retailers are accepting Bitcoin as a payment option, which has built interest amongst the general public. In particular, the majority of people that have invested in cryptocurrency have done so since 2020. This acceptance and surge in investment in Bitcoin have been accelerated by the opening of the first Bitcoin ETF to hit the New York stock market.

We already have global adoption of cryptocurrency rising in the commercial and public sectors. The global pandemic brought lockdowns across the world, meaning there was nothing for people to spend money on, which boosted demand. Therefore, more people had expendable income and were looking for places to invest. If you’re in the same boat, now is the time to buy Bitcoin with credit cards or debit cards through Paxful.com. Once you’ve signed up, you will have access to a free secure Bitcoin wallet and the marketplace where you can buy or sell crypto to millions of users worldwide.

Arguments for Neobanks Filling Demand

There we have it: commercial cryptocurrency adoption, constant banking interest rates, and increased savings as a result of the global pandemic all collide perfectly to increase demand for cryptocurrency services. Already, we are seeing fintech giants PayPal and Square entering into the crypto space, and here’s why you should.

Keep Existing Clients

If you’re not offering cryptocurrency services, your existing clients are turning elsewhere for trade and opening more apps than they need to. If existing customers can carry out crypto transactions and trades through your fintech service, they are more likely to stay with you and leave feeling happy. To see this in practice, you only need to look at this PayPal analysis by Mizuho Securities, which found that customers have logged into the app twice as much since the launch of their crypto exchange. Further, the report found that 20% of all PayPal users have entered into Bitcoin trade through PayPal.

Draw In New Clients

Adding a crypto exchange to your fintech service will not only keep current customers happy but help bring in new customers. We’ve already mentioned that there is a growth in people investing in Bitcoin. In the UK alone, the number of adults with cryptocurrency investments has reached 2.3 million. This number is only expected to see growth as we move forward into 2022. If your fintech service isn’t offering cryptocurrency services, you can’t possibly cash in.

When you set up your services, you need to remember that the space is completely new to people. Therefore, you should ensure your exchange caters for veterans and newbies. With that, you can have a blog full of useful information and a 24/7 customer service team to answer any questions.

Additional Revenue

There’s no denying that running a fintech business is difficult, whilst turning a profit is even more so. This is especially true for fintech firms based in Europe because of low interchange. By entering into the cryptocurrency space, fintech firms and neobanks are backing themselves and adding another revenue stream.

If you’re looking to bolster your revenue by adopting cryptocurrency, there are a couple of ways you can accomplish your goals. You can roll out crypto services into a premium service and benefit from a monthly subscription. Alternatively, you can earn revenue on the spread of trading different cryptos. Whichever route you take, you need to be in it to win it.

Becoming Futureproof

Cryptocurrencies aren’t going anywhere in the business world, partly because they solve problems faced by international trade including speed of payments and high service fees. Although financial governing bodies need to work out how to track payments made using cryptocurrency, it’s safe to say that the problem will be solved, and cryptocurrency will cement itself into every fibre of commercial trade. Neobanks and fintech companies are already fine-tuned to the banking revolution everyone needs. Therefore, you may as well future-proof your business by utilising cryptocurrency and supporting the decentralising of the finance industry.

Implementing a Crypto Exchange

We’re glad you’re still reading because that means you’re ready to meet crypto service demand and start earning more revenue. When it comes to integrating a cryptocurrency exchange into your fintech business, there are two methods:

1. Team up with an exchange market provider, which is the quickest way into the market.
2. Build independent facilities, which takes time and hefty resources.

There are pros and cons for each method, and you can find out more about creating an independent crypto exchange here.

Summary

Cryptocurrency is being adopted by commercial merchants, which is spiking interest in crypto. Further, the global pandemic meant that more people had higher savings and needed an avenue to invest. The surge in interest and demand needs answering, and neobanks and fintech can benefit greatly. Your company will open up a new revenue stream, keep existing customers happy whilst attracting new customers, and make yourself futureproof.