Whenever the subject of Fintech crops up during a conversation, the first things that come to the minds of many are online payments and mobile wallets. However, Fintech is actually a very broad segment of the financial markets.

These days, the term Fintech can be linked to several segments of the financial services industry including insurance, credit, banking, trading and of course, payments. While most of these segments are quite straightforward in the way Fintech has influenced their development over the last few years, the credit market is still an unfamiliar territory.

However, this segment of the Fintech market is now gathering pace with several products launched to target specific markets. For instance, there are companies that now provide loans for only the unemployed people or those who have bad credit in general, and most of their services are offered online.  For instance, loans accessible from this company are expressly stated to be for people with bad credit, which also makes processing time quicker and hassle free since no fact checking is required.

However, it is also good to note that most platforms that provide such loans can only lend up to $1,000, which is why they fall under the category of payday loans.

Back in the years, payday loans were only offered via pawn shops, but due to the increase in online payments methods, entrepreneurs have moved to capitalize on this paradigm shift by extending their services to online platforms. This has, in turn, triggered the rise of several startups that target online lending for unemployed people and consumers with bad credit.

Over the last decade, the lending market has experienced a tremendous change. Startups like Prosper and Lending Club both of which started as peer-to-peer lending marketplaces have grown over the years after weathering several regulatory shocks.

These lending services have emerged as the most preferred choices for several borrowers seeking to receive quick solutions to their financial needs. And as Business.com puts it, these startups provide borrowers with faster lending options that entail “easier application experiences than possible through traditional financial institutions.”

On the other hand, UpStart, which was set up by Googlers to provide customized loans to individuals is now one of the leading online lending platforms. This lending marketplace seeks to extend their services to more people that fall short of the threshold set by mainstream lending companies.

In addition, the increasing adoption of mobile wallets by consumers has enhanced the success of online lending services. This is because consumers can now access the services from anywhere on earth as long as there is an internet connection. This also shortens the time it takes to receive and use the money after applying for a loan online.

As noted on this Born2Invest article, “Mobile wallets provide the type of penetration that mainstream banking institutions can use to gain access to residents living in remote areas especially since they have access to the internet via mobile communications networks.”

This comes in handy in a situation where banking institutions have no branches on the grounds but intend to reach the customers residing in these areas. Therefore, with the help the advances in Fintech, banks can now lend money to such customers via mobile applications, which they can spend on various POS systems, or even withdraw via third-party ATMs.

This alongside platforms like Prosper and UpStart illustrates how Fintech is changing the credit market both in mainstream banking and online startups. It is a change that made Fintech one of the fastest-growing markets in the financial services industry. It also seems set to continue growing at the current rate in the foreseeable future.

Conclusion

In summary, Fintech is one of the most interesting markets to invest in right now. And while the likes of PayPal (Nasdaq: PYPL) Alibaba’s (NYSE: BABA) Alipay and Apple’s (Nasdaq: AAPL) Apple Pay seem to be leading the market in online payments, the credit market offers some unique opportunities for those looking to invest in online lending services.

When it comes to money, time is everything and the quicker a borrower can use any borrowed funds, the more appealing the lender becomes. This is one of the top catalysts for online lending platforms.