We recently caught up with Girts Straujums, CEO of WeavePay, a UK-based payment platform that helps businesses go borderless.
Girts Straujums talked about the issues facing Fintech platforms and how certain customer needs are still not being met. Straujums also shared the main reasons why banks in Europe and the UK reject small and medium-sized businesses. Straujums also touched on what he thinks are the most complicated payment problems that need to be solved.
Crowdfund Insider: Let’s start with the most important question: What problems are most Fintech platforms still not solving for their customers?
Girts Straujums: There are many Fintech platforms available on the market today, but we have spent a significant amount of time researching and analyzing the pain points and challenges that individuals and businesses face when it comes to managing their finances.
One of the major issues is the geographic coverage of the most popular platforms. Most leading Fintech platforms are only available in specific regions or countries. Further, they are frequently unavailable for small and medium-sized businesses, as well as newly registered businesses, because they require companies to have a long track record.
There are also a number of industries that have traditionally been underserved, such as logistics, marketing, IT, е-commerce, and so on. Banks may not always accept applications from these types of businesses because they have predefined requirements and request a specific set of documents. They already have rules in place, whereas such industries necessitate flexibility. As a result, the primary goal of payment platforms should be to reduce these issues and make quality financial services available to legal businesses of all sizes. We can’t say payments have advanced until there are legitimate businesses that can’t even open an account.
Crowdfund Insider: What are the main reasons why banks in Europe and the UK reject small and medium-sized businesses?
Girts Straujums: The majority of the difficulties stem from banks’ desires to ensure that they will consistently profit from the operations of the companies and will not face any legal issues – both of which are reasonable concerns. However, these create challenges for businesses because they must go through additional steps to demonstrate that they deserve financial services. Small- and medium-sized businesses must prove their long-term viability. If these companies come from high-tech or new industries, they must also demonstrate the validity of their concept.
Thus, the main reason for rejection is skepticism that the business will prosper and generate profits without causing any legal issues. According to some analysts, in addition to clarifying revenue sources and business purposes, it is also important to work on the business owner’s personal background to demonstrate trustworthiness.
Crowdfund Insider: What do you think are the most complicated payment problems that need to be solved?
Girts Straujums: There are a number of payment problems that can be challenging to solve, and these can be particularly impactful for logistics companies. Some of the most pressing issues include:
Cross-border payments: Making payments between countries can be complex and expensive due to differences in currency, regulations, and banking systems. This can create difficulties for logistics companies that operate internationally.
Complex supply chains: Logistics companies often have complex supply chains that involve multiple vendors, carriers, and other partners. Managing payments and reconciling accounts with all of these different parties can be a significant challenge.
Fraud prevention: Payment fraud is a major concern for businesses of all sizes, and logistics companies are no exception. Protecting against fraud while still providing a seamless payment experience can be a difficult balancing act.
Slow payment processing: Long payment processing times can be a major issue for logistics companies, particularly those that operate on tight margins. Delays in receiving payment can create cash flow problems and disrupt business operations.
Lack of standardization: The lack of standardization in payment processes and systems can make it difficult for logistics companies to streamline their operations and reduce costs.
Crowdfund Insider: So, how do fintechs usually approach emerging and young industries? What industries continue to be underserved?
Girts Straujums: Collaborating with projects in emerging and young industries can be particularly challenging, as these sectors are often characterized by rapid change and need flexibility. However, these industries also offer some of the greatest opportunities for fintech companies, as they are often underserved by traditional financial institutions and are in need of innovative solutions.
To approach projects in emerging and young industries, fintechs have to take a number of steps to ensure that they have a deep understanding of the unique challenges and opportunities that these sectors present. This includes conducting extensive market research, building relationships with industry experts and key stakeholders, and working closely with customers to understand their needs and pain points.
There are many industries with significant potential for Fintech innovation, including healthcare, education, and renewable energy. However, all Fintechs should also recognize that each industry is unique and that they need to approach each project on a case-by-case basis in order to tailor their solutions to the specific customers’ needs.
Crowdfund Insider: You mentioned issues with corporate payment cards. Business cards don’t seem like a complicated product. What are the problems you see entrepreneurs have with card payments?
Girts Straujums: Yes, here’s the deal. Even though cards appear to be a simple payment method, they frequently cause problems for businesses of all sizes. One problem is straightforward, while another is more complicated. First, companies frequently have to wait a long time for their corporate cards to be issued, especially if their employees live far away. Due to delivery, this time may be extended.
The second issue is a lack of control. The more employees a company has, the more difficult it is for them to track spending. This frequently results in financial losses. Companies must ensure that money is only spent on business needs in order to properly manage their finances.
Crowdfund Insider: How do you see the Fintech industry evolving in the coming years? Share your predictions for fintech trends in 2023.
Girts Straujums: The Fintech industry has seen rapid growth and evolution in recent years. I think it’s almost certain that this trend will continue in the coming years. Some of the key trends that I expect to see in the fintech industry in 2023 include:
Expansion of fintech into new sectors: Fintech has traditionally been focused on financial services, but we expect to see it expand into new sectors in the coming years. This could include the development of fintech solutions for industries such as healthcare, education, and energy.
Greater focus on financial inclusion: Many fintech companies have a mission of increasing financial inclusion, and we expect to see a continued focus on this in the coming years. This may involve the development of new products and services that are specifically designed to reach underserved or underbanked populations.
Continued regulatory developments: The fintech industry is heavily regulated, and we expect to see continued regulatory developments in the coming years. This could include the development of new rules and guidelines for fintech companies, as well as the expansion of existing regulatory frameworks.