Revealed: B2B, cryptocurrencies lead cross-border payments startups

• FXC Intelligence has published a deep-dive report into cross-border payments startups.
• 74% of new companies analysed cater primarily to businesses and leveraging the use of cryptocurrencies is the most common focus among startups, with 41% using the technology.
• These startups provide a look into the future of the cross-border payments industry, and there are promising indications for the space.

Today, FXC Intelligence has published a deep-dive report looking at the trends in cross-border payments startups, focusing on new companies launched since the start of 2022.

Startups catering to business customers have been founded at a much greater rate than those serving consumer customers. 74% of the companies analysed catered primarily to businesses, while just 26% primarily focused on consumers.

While B2B cross-border payments is a common focus, many instead provide services to enable businesses to interoperate between fiat and cryptocurrencies – either to accept payments from customers or to interact with crypto-facing businesses and operations. 41% of the startups had some form of crypto product.

This is significant given the current and ongoing crypto winter, and suggests that there are green shoots for the industry.

This is reflected in the fundraising status of these startups. Companies that had some form of crypto as part of their offering were the most likely to have received funding, with 57% having funding, compared to just 39% of those who did not have a product involving crypto. Business-focused companies were also more likely to have funding, with 53% of such companies having raised money compared to just 27% of consumer-focused companies.

The startup profile that was most likely to have received funding was business-focused companies with a crypto product, at 59%, while the profile least likely to have received funding was consumer-focused companies with no crypto product, at 19%.

Lucy Ingham, Editor-in-Chief and Head of Content at FXC Intelligence said:

“We’re interested in analysing these startups because it provides a snapshot of how the industry may evolve in the future. 

“Although it isn’t a complete picture of the future of payments, it does indicate the makeup of new companies that will help the industry grow moving forward. By observing the issues these startups are focused on solving, we can glean useful insights into how the industry is developing, including the innovations and technologies that will shape the future of how money moves and the key macro challenges the industry is looking to overcome.

“There are indications that the main area of growth in the industry will be on the business side of payments, which is strengthened by the strong growth rates of more established players in this space.”

After crypto interoperability, the next two most common focuses of the startups were around improving processes for either business customers or consumer customers, with many companies focusing on specific niches. This includes improving services in emerging markets and making doing business on particular corridors cheaper or more efficient on the business side, while on the consumer side this includes tackling financial inclusion and reducing friction to send payments. 

This focus is similar to many more established businesses in the space, and reflects the breadth of process improvement opportunities within the cross-border payments industry globally. Many of the companies focusing on this area are located in areas of the world that have traditionally been seen as a lower priority or too challenging due to market size, local infrastructure or market maturity.

Whether this cohort of companies develops consistently, or the market provides greater growth to some areas than others, is yet to be determined. What is clear is that cross-border payments continues to be a space where startups are finding their footing. 

Further information

• To read more about trends in cross-border payments startups click here.
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