#Business17 Aug

Vertical Banking: Crypto for Niche Businesses

Alisa Tkach

Crypto will transform your business. Here’s how.

Crypto will transform your business. Here’s how.

The traditional banking system is struggling to keep up with the time. Ironically, some of the most developed countries still struggle to provide proper, up-to-date financial services for both enterprises and consumers. The lack of decent mobile banking, not to mention specific business-oriented products, became even more apparent when neobanks made their appearance.

According to statistics, about 40 million US citizens will be holding accounts at digital banks by 2025. Highly client-oriented, neobanks meet the needs of various groups of users, boast low transaction costs and nearly instant money transfers. Although it’s hard to compete with these perks, another industry is ready to take up the challenge.

Vertical Banking: Value Over Tech

The opportunities that cryptocurrency carries go beyond creating a bunch of finance apps with a user-friendly interface: the tech can seriously step up the vertical banking game. 

The goal of vertical banking is to tailor a unique product that would meet the needs of an extremely specialized group of customers. Imagine a virtual card for travelers that allow splitting the bill with a group and not to worry about the exchange rate as crypto balance is linked to stablecoins.

The global pandemic accelerated long-awaited digital transformation. People migrated to the online world, and vertical banking became as relevant as ever. Technology rapidly followed the trend. Today, neobanks don’t even have to build their empires from scratch, as one can quickly get their hands on banking infrastructure kindly supplied by artful service providers. 

Unsurprisingly, that does create a highly competitive environment: currently, there are 220 neobanks around the world. The majority of them is using ready-to-use solutions, Mercuryo’s Fintech SaaS being one of them, allowing companies to focus on scaling and bringing in more value to their clients thanks to the extra convenient work infrastructure. And that’s where crypto comes in handy.

Crypto and Business: Finding Your Niche

When a business starts thinking about integrating blockchain tech into their daily operations, they are usually motivated by the possibility of entering a new customer segment. However, some industries and crypto are a match made in heaven, although they might not even realize it. A few striking examples include gaming, eCommerce, as well as banks and neobanks themselves. 

In some cases, cryptocurrency can become a trigger point and contribute to company’s long-awaited growth. For example, when the general hype around crypto kicked off, Revolut has seen a tremendous growth: in just a couple of months, Revolut opened 300,000 crypto wallets and finally became profitable for the first time in three years.   

It is not hard to see why — the company has never been profitable on an annual basis, even if it has occasionally on a month-to-month basis. And the only months that this has ever been the case have tended to be moments of crypto mania. It was briefly profitable during the bitcoin boom of late-2017, and Revolut said recently that it had been profitable every month since November, during which time bitcoin increased in value by more than 300 per cent.

Gaming

Gaming and cryptocurrency are mirroring each other since both industries are based on a highly dynamic environment. Gamers are very comfortable using digital tokens, considering they can even trade for real-world currency to make some extra profit. They also expect their transactions to be fast and transparent. 

Crypto tech might help gaming with the following:

  • Exchanging in-game assets to fiat currencies cheaply and conveniently
  • Conducting mass payouts to players
  • Processing nearly-instant international money transfers
  • Earning passive income

A few games have already started giving green light to crypto transactions. For instance, the only way you can purchase most of the unique CS:GO skins (used to make your weapon look cooler and more fierce) is with cryptocurrency. Needless to say, various marketplaces trading in-game items often accept cryptocurrency.

The possibilities of creating crypto-powered niche products for gaming are nearly endless. Virtual gaming economies are getting larger and more complex, and new booming NFT-focused industries are only speeding the demand for convenient banking solutions. 

Mercuryo has designed at least three products tailored for specific gaming needs: Crypto In&Out, GiG Solution, and Money Transfers.

Healthcare

In 1960, American healthcare was worth $24.7 billion, while today, the estimate is close to $3.8 trillion. One of the industry’s biggest problems is the lack of transparency: nobody can tell how efficiently the funds are allocated. 

On top of that, healthcare is a global business, and cross-border money transfers are common. However, the cost, speed, and the entire process of transferring money internationally are far from ideal. Settlements in digital currencies may help solve both issues simultaneously: paint a clearer picture of how the funds are being used and cut the costs. 

Picture this: a person from Indonesia is planning on getting medical treatment in Germany. It is only obvious, they will have to deal with losses due to currency exchange. However, the price fee be a little too significant since healthcare costs are not among the cheapest ones: a €100,000 bill will cause thousands of euros in commissions. On top of that, if you plan on bringing the whole sum in cash, you’ll have to declare it at customs.

eCommerce

Another industry that can be improved by integrating cryptocurrency solutions is eCommerce. During the past couple of years, e-tailers were vigorously forcing offline merchants out of the market: in 2020, e-tail sales surpassed $4.2 trillion globally. Consumers are happily going digital, and saving money on transaction fees applied by payment systems and credit card companies is one thing that could become an attractive advantage in this highly competitive field. And guess who can help with making this happen?

But cheaper transactions are not the only perk that crypto tech can offer to eCommerce. The current state of loyalty programs is not that optimistic. Crypto products, in turn, can organize a perfectly structured reward modal using loyalty tokens that cannot be implemented in the traditional financial system. Large marketplaces can take advantage of crypto-powered mass payouts and smooth cross-border money transfers. Just like with gaming, cryptocurrency products can unlock immense potential for the eCommerce space.

Banks and Neobanks

The crypto industry is booming – these days, everyone is keen on exploring the world of trendy digital assets. There’s no doubt that neobanks would offer operations with cryptocurrency to their customers if they could. However, that’s not that easy. 

The uncertain regulatory environment and difficulties with getting appropriate licenses are hardly helping with speedy launch. The development’s complexity and costs, as well as fining time and means to obtain special resources to manage and maintain a working blockchain infrastructure are just a few of the obstacles that aspiring fintech projects and cumbersome financial institutions would have to face right from the start. 

And that’s when white-label solutions like Crypto SaaS by Mercuryo come to the fore. Banks won’t have to deal with custody, user verifications, cloud infrastructure, node management, or even customer service themselves while offering their customers an opportunity to open crypto wallets alongside their fiat accounts and easily switch between those two. 

The Bottom Line

Digital transformation is quickly changing every single aspect of our lives and our banking experience in particular. Neobanks are taking over traditional banks, but while the number of the former keeps on growing, their quality and actuality leave room for improvement. Integrating cryptocurrency technology into niche businesses, including neobanks themselves, may help meet the needs of particular clients and significantly improve the overall customer experience. 

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