Dan Roarty: There’s an old saying that cash is king, but that might not be true for much longer. Cashless commerce is rapidly becoming the new king. The digital advancements that we’ve seen in financial technology—or fintech—are having a massive impact on individuals and businesses, large and small, around the world.

With me today to talk about fintech is William Johnston, our research analyst specializing in financials. So, William, can you start by telling us what fintech is?

William Johnston: Payment technology was really born out of the consumer installment credit products in the US in the 1950s. But payments have evolved now into quite a complex digital web. I mean, this has seen a big growth in e-commerce between a broadening group of people at all levels—from business to consumer, business to business, government to consumer and person to person. And technology companies are now looking to exploit each part of the value chain and helping customers and banks and businesses speak to each other across the spectrum.

DR: 80% of all transactions globally are still conducted with good old-fashioned cash. So, what do we think is going to drive this shift away from physical cash and towards digital payments?

WJ: We’re seeing a significant growth in cross-border flows, and the vast central bank printing in the face of an economic slowdown is challenging national currencies with the birth of borderless software cash such as Bitcoin. So, the revolution in digitalization is unfolding with rapid growth, and transaction value is growing around 24% per annum over the last three years.

DR: Where’s the strongest growth taking place right now?

WJ: Asia represents the biggest opportunity—almost half of all payment revenue. And China is leading the way through its state-endorsed payment networks. We’re seeing social media networks even looking to create their own cryptocurrencies to monetize their vast customer bases. But also, in the face of COVID-19, payment trends are rapidly evolving as individuals who have never ordered groceries [or] paid bills online are being introduced to the world of digital payments.