Benzinga | Sep 17, 2021 01:15PM EDT

Fintechs Pose A Threat For Conventional Lenders - Read How

* Global brands from Mercedes and Amazon.com Inc (NASDAQ:AMZN) to IKEA and Walmart Inc (NYSE:WMT) are migrating to software from tech startups from banking and credit to insurance services at the cost of the traditional lenders, banks, and financial institutions, Reuters reports.

* The trend will worsen for the lenders by further pushing them away from the finance chain and data trove, the key to client preferences and behavior.

* Some upstarts have procured licenses for regulated services like lending; they lack the scale and deep funding pools.

* The report added that Stripe, the payments platform behind multiple sites with clients including Amazon and Alphabet Inc's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, was valued at $95 billion in March.

* Affirm Holdings Inc (NASDAQ:AFRM) bonded with Amazon to offer BNPL products, while Square Inc (NYSE:SQ), now worth $113 billion, aims to acquire BNPL firm Afterpay Ltd (OTC:AFTPF) for $29 billion.

* Related Content: How Affirm's Amazon Partnership Could Launch Stock Into High Orbit

* Walmart launched a fintech startup with investment firm Ribbit Capital, while IKEA acquired a minority stake in BNPL firm Jifiti.

* Automakers like Volkswagen AG's (OTC:VWAGY) Audi and Tata Motors Ltd's (NYSE:TTM) Jaguar Land Rover have tried embedding payment technology in their vehicles besides Daimler AG's (OTC:DMLRY) Mercedes.

* Shopify Inc (NYSE:SHOP), valued at $184 billion, has provided $2.3 billion in loans and usually reaches out to merchants to cater to their needs.

* However, JPMorgan Chase & Co (NYSE:JPM) had a consumer and community loan book worth $435 billion at June end.

* Interestingly, the Bank for International Settlements warned watchdogs to control the growing influence of fintech firms.

* Still, Citigroup Inc (NYSE:C) collaborated with Google on bank accounts, Goldman Sachs Group Inc (NYSE:GS) is offering credit cards for Apple Inc (NASDAQ:AAPL), and JPMorgan is acquiring 75% of Volkswagen's payments business.