Fintech/Fintech Collaboration: 3 Questions on a background trend

13.03.2018

Fintech/ Fintech Collaboration

In the past months, numerous Fintechs have announced collaborations with other Fintechs ( Younited Crédit and N26, also Linxo and Raisin’ ). These alliances take different shapes: technological partnerships; commercial partnerships or a mutual use of their services. How to explain this trend? Which are the conditions for a relevant alliance? We talk about them in this post! Keep reading!

1 – Why do these partnerships exist?

A B2B Fintech, even more in the payment sector, starts with a specific service ( for instance at SlimPay: one payment method). This focus is needed to differentiate this structure  and make it the specialist in its niche.

Nonetheless, to differentiate their offer, strengthen their visibility, acquire new clients, some Fintechs come together to propose a complete value chain and create an ecosystem… Due to their common cultures and their converging growth needs, alliances are quite logical. And it is especially the emergence of APIs, which allows this connection on the technical level.

2 – How to define the relevance of a Fintech/Fintech alliance?

A relevant alliance gathered certain technical and commercial conditions to be useful to everyone.  The first question to ask is, therefore, the following: Do we have common clients and prospects? Are we targeting the same companies? If so, to what extent could a combination of our 2 services be of interest to these target companies? In other words: what will their benefit be?

Regarding the technical conditions of the alliance, the primary element to be determined is to know to which extent the two technologies are “combinable” or easily integrable? Will it be necessary to invest in development, at what height and for what potential economic benefits?

Finally, the commercial condition question comes: define the type of partnership ( for example: reseller in white label or business provider? ), who resells the solution of whom,  will this alliance win customers who would have been insensitive to our services offered separately, for which potential of additional revenue ?

3 – Do these business partnerships announce a future concentration of the sector?

Not necessarily. It is of course very tempting for some players with strong synergies to be allied in a much stronger way through a merger or an acquisition.

This is not the case for any Fintech startup. If it has established itself in its niche, and build good partnerships without creating dependence, it will be strong enough to remain autonomous.

The alliances amid Fintechs are pretty logic and allows to support the mutual growth of these actors. At SlimPay, we collaborate with other Fintechs as partners ( commercial or technical ) while some Fintechs use our payment solution.

Younited Credit: a collaboration with SlimPay to prepare its European expansion

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