London Emerges as world's prime location for payments startup growth
The landscape of cross-border payments is evolving, with several cities across Africa, Latin America, and Southeast Asia emerging as key players in this space. This shift is reflected in the growing number of startups operating in these regions, particularly in Nigeria and Lagos.
Nigeria, with its rapidly growing payments hub, now holds 7% of the market share for cross-border payments startups, rivalling New York, US, which also accounts for 7% of the startups founded since the start of 2022. The high placement of Lagos in this list reflects Nigeria's growing importance in Africa and globally.
In contrast, the US maintains a dominant position in the payments industry, with 50% of the US-based cross-border payment startups located on the East Coast. However, the stronger presence of emerging markets in lists of newer cross-border payments startups compared to larger, more established companies suggests a shifting tide.
The global payments industry is increasingly embracing digital currencies and blockchain-based solutions for cross-border transactions. Major platforms like Stripe and Shopify have integrated stablecoins to enable seamless international payments with lower fees and faster settlement. Partnerships between traditional payment networks and decentralized finance infrastructure are also bridging fiat and crypto payments, simplifying and securing global transfers.
Geopolitical economic groups like BRICS are also advancing initiatives to improve cross-border payment systems and local currency financing mechanisms, indicating a shift towards diversified, multi-currency infrastructure supporting emerging markets.
Despite Brexit, London's position in the cross-border payments industry has not been significantly impacted. The city, with its established presence in the payments space, hosts 15% of all cross-border payments startups founded since the start of 2022. However, the size of the gap between London and other cities in terms of cross-border payments startups was surprising, according to Lucy Ingham, Editor-in-Chief and Head of Content at our platform.
It's worth noting that most payments startups worldwide serve business customers. Our platform has published a deep-dive report on trends in cross-border payments startups, providing insights into this dynamic and rapidly evolving industry. In Europe and North America, 33% of non-crypto startups are based compared to 24% of crypto companies.
While New York and Lagos lead the way in cross-border payments startups, it's clear that emerging markets are making their mark in this space. The growth of fintech innovation hubs in these regions, supported by regional programs and global partnerships, signals a promising future for cross-border payments in these markets.
[1] Source: Mastercard Report [2] Source: Stripe Blog [3] Source: Mastercard and Chainlink Partnership Announcement [4] Source: BRICS Cross-Border Payment System
- The growing number of cross-border payments startups in Nigeria, particularly in Lagos, indicates a significant shift in the business landscape, even rivaling established players like New York, US, in the domain of technology-driven finance.
- The increasing adoption of digital currencies and blockchain-based solutions in the global payments industry is also evident in the integration of stablecoins by major platforms like Stripe and Shopify, aiming to streamline cross-border transactions and reduce costs.
