The digital payments industry in Scotland was dealt a boost in June 2020 when fintech challenger brand, Soar, partnered with payment company Modulr to provide a solution to responsible lending. The partnership will aid the needs of credit unions and Community Development Financial Institutions in order to use the API platform from Modulr to provide financial solutions. How does this partnership showcase the growth of digital payment solutions in Scotland?
Modulr and Soar Show Viability of Industry
The key takeaway of the Modulr/Soar partnership is that they move towards digital financial solutions and away from traditional payment processing and banking. Modulr’s finances were raised by May 2020, where the company had garnered almost £19 million for new applications, products, and to add to the just over £50 million already set aside for European development. The solution helps those who are blocked out by the current payment processes. Undeniably, the digital payment solution, if successful, will further legitimize the industry and position Scotland as a fintech force.
Digital Payments Industry Growth
The digital payments industry is already providing unique solutions to help more people pay in different ways. These range from e-wallets like Skrill and Neteller to blockchains such as Bitcoin and Ethereum. Some games, such as those purchased through Steam until 2017, could be paid for with Bitcoin, one of the most marketable examples of the future of digital payments. The payments only stopped due to the outlaid costs but gained enough attention to pique interest.
Indeed, Santander’s partnership with blockchain Ripple for its security for cross-border payments gave a huge boost of legitimacy to the industry. Other banks look to be following similar routes and using the ledger nature of the blockchain in order to solve costly and time-consuming issues with international payments. Blockchain is growing in its importance in day-to-day life and attracting more interest from those who otherwise would have ignored it.
Many sectors have revolutionised how they accept payments, with digital solutions growing. The casino industry is certainly one of them, as you can see in this list of accepted deposit methods, customers are able to select the online casino site they want to engage with based on how they are able to pay – including with Skrill and Neteller. Skrill’s uses range from Skype credit to Ethiopian Airlines to language-learning site Italki, thus appealing to different kinds of audiences. While Neteller offers payment for wellness products from Direct Life and web hosting service TurboBit. Indeed, micro-gifting company HUGGG partnered with the Red Cross to provide cashless shopping solutions.
Digital Banking on the Rise
Digital banking is also on the rise. Monzo users have increased almost fivefold from their initial million at the start of 2019. The disruptor to traditional banking helps appeal to its main market (millennials) who are looking to make their finances go further and track their expenditure as much as possible.
Rivals such as Revolut have arrived on the scene and are appealing to their target market with incentives that millennials – who are usually not with a mortgage yet – might enjoy. These include offers on rail fare and hotels. These digitally savvy companies are not only attracting genuine customers for their innovative services but are doing so in a clever way.
Moreover, Venmo became synonymous with sending money to people – replacing the traditional bank transfer. The inconvenience of sorting out tips for group meals in restaurants have been revolutionized by such platforms, showing that the future of digital payments doesn’t need to be anything more complicated than solving problems we currently have.
A trifecta of events needs to conspire in order for the digital payments market to continue to rise. Firstly, the government and regulators need to understand how beneficial the industry could be and begin implementing ways in which they could further increase its viability. Scotland has proven this with its commitment to digital and the ‘cloud-first’ public sector policy. Secondly, users need to want to interact with the new payment methods. Through many sectors and industries, we can see this interaction – from entertainment to digital banking being adopted. Finally, companies themselves need to foster an environment to help this grow – as Modulr and Soar have proven through their partnership and the money raised. Should these three events align, we should see Scotland become a force for the digital payments industry.