Banks vs BigTech vs Fintech

Banks are focused on being local, Tech giants – global

Banks are focused on making payments more transparent and at a lower cost, therefore they are looking for a local type of cooperation. They also see their strategy may compete with big fintechs and Tech companies. In turn, big fintechs and IT giants have global ambitions and are ready to spend a lot of money to conquer the world.

  1. 1) P27: Creating a pan-Nordic payment region

P27's initial goal is to enable real-time, domestic and cross-border payments to be carried out quickly, more efficient and transparent within the countries of Denmark, Finland and Sweden. For the moment, six Nordic banks have agreed to support and fund the development of a domestic real-time payment platform as part of the P27 initiative.

  1. 2) PEPSI: creating a pan-European payment system

Twenty European banks are working on creating a pan-European payment system in order to challenge the dominance of Visa and Mastercard as well as technology giants like Google, Apple, AliPay and WeChat Pay and to develop a home-grown cross-border payment scheme. The European Central Bank supports this alternative to Visa and Mastercard and the European Commission (EC) are considering implementing new regulations to support and accelerate the adoption of TARGET Instant Payments Settlement System (TIPS).

  1. 3) Tech giants conquer the world

On the other side of payment sector, tech giants like Apple, Facebook and Google are making steps into providing payments worldwide. Apple together with Goldman Sachs earlier this year launched a credit card for all US citizens, Facebook announced its libra cryptocurrency initiative and Google is set to offer its first-ever checking accounts next year.

Banks are stopping partnering with fintechs and starting to compete

Banks are ready to share their infrastructure with worldwide Tech giants and big merchants in order to compete with Fintechs

  1. 1) Citi and Stanford Federal Credit Union offers BaaS platform to Google

Google is partnering with Citi and Stanford Federal Credit Union (FCU) to launch checking accounts for Google’s digital wallet customers. Google will use the Citi’s banking-as-a-service platform, while Stanford FCU is likely to handle the deposits. The project, codenamed Cache, is scheduled to launch to the public next year.

  1. 2) JPMorgan has a plan to help Amazon and Airbnb look more like banks

The bank has spent the last year developing an e-wallet tailored for companies such as Airbnb, Lyft and Amazon. It will give tech companies the ability to provide millions of customers virtual bank accounts and other financial services like car loans or discounts on home rentals.