Many startup industries were dominated by western, but fintech has different geographical footsteps and a broad range of stakeholders. There are some reasons that cause Asia’s fintech to face many different challenges compared to the U.S.’s fintech. 

  1. Fragmentation of Geographic 

Asia has over 20 countries which each of them have their own currency, economy , and regulatory body. Most of the founders in Asia have a small market in their own nations, hence they should look outside their borders. Yet, it is difficult to obtain a license to do business in each new country. 

  1. Unbanked Populations

Based on the World Bank, there are 2 billion people around the world who are unbanked and more than half of them are from Asia. These people do not have their own bank account because they do not have enough money or live in rural areas where payments are made by cash payments. 

  1. Consumer Class is Growing

As the economy of Asia is developing, the middle-class people are consuming more. E-commerce in Asia is still young and the usage of credit cards in Asia is coupled with low penetration. E-commerce retailers in Asia are still exploring new payment tools to enhance convenience for consumers.

  1. Penetration of Mobile

The mobile phone penetration rates in Asia are increasing day by day and mobile apps have become the focal point of fintech in Asia. However, credit bureaus who provide credit data have existed in the U.S. for a long time, but are still new to Asia. The existing data may not provide sufficient credit history. 

In conclusion, the diverse population and market dynamics of Asia have caused a different set of challenges and opportunities to the fintech in Asia than those faced by the fintech in the U.S.

Written by Javene Liau


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