The excitement around fintech is growing tremendously. New players are entering the market, while customers are increasingly adopting new models. The range of products developed and marketed in Bulgaria by both startups and established companies is wide – from any type of digital payments and lending platforms, to security products and tax reporting systems.
Trending Topics asked three of the main drivers behind the ecosystem where is the Bulgarian fintech sector heading in 2019 and what new technologies the companies envision. In short, more and more layers are added – artificial intelligence, payments via QR, cryptocurrencies or biometrics will be among the trends shaping the sector.
Vanya Manova, country manager for Bulgaria and Macedonia at Mastercard
“Our main strategy for 2019 will be to further develop digital services which are different from payments. We are looking at complex solutions for access control and user recognition. The goal is to promote a Mastercard technology that tokenizes the information and makes authentication much easier and secure.
Biometrics is another important topic for us – we are talking not only fingerprint authentication but also type of behavior. The way the customer scrolls through a page for example and the angle at which they hold their mobile device as well – these are all patterns which will soon help us identify the user and will take the place of good old password.”
At the same time card network operator Mastercard is keeping a very close look at the Bulgarian fintech ecosystem. The first mobile digital wallets to operate in Bulgaria were developed in cooperation with Mastercard – these are Phyre, iCard and the apps for FiBank and telecom provider A1. According to Manova Mastercard might even acquire a Bulgarian fintech company this year, as buying bright new technological startups has been a way for the card provider to expand its knowhow.
Miroslav Bojilov, General Manager at Paysafe group
“We will continue our global products enhancement. This includes new or improved features for one of our digital wallets, Skrill, in relation to cryptocurrencies, international money transfers, and the Skrill mobile app.
Beyond the competition for talent, other challenges to the fintech industry in 2019 worth mentioning are about reacting effectively to the evolving regulations of the financial industry – like remaining KYC compliant while minimizing customer inconvenience, or making good use of automation opportunities such as Machine Learning and Artificial Intelligence, among others.”
The Bulgarian office of global digital payment provider Paysafe reached 1000 people last year and is the largest IT company by revenue in the country (€50M n 2017). Also the Sofia unit is the biggest within the company and representing a third of its global workforce. The core activity here is focused on the Skrill digital wallet – the user-friendly one-tap payment platform of the company.
Martin Bogdanov, CEO of Paysera Bulgaria
“The mobile services and in particular the mobile payments are becoming more and more popular among Bulgarian users and this is why we expect more and more merchants to start introducing this type of services. I think this is the beginning of a significant transition from card to mobile payment methods. This year we will actively promote some of our less known services – mobile payments via QR codes in physical stores.
In 2019, we expect growth in corporate accounts. We’ll also introduce a Bulgarian IBAN and allow users to pay utility bills through the platform.”
The company is a Bulgarian franchise office of the Lithuanian company of the same name. Its main product is a payment platform focused on cheap international money transfers and it is targeted at businesses with loads of international transactions. It’s however popular among consumers as well. In 2018 the local branch, which is operating on the Bulgarian market only, managed to increase its client base with 50% and reach transfers for €270M.
The rise of the local fintech market
The local market, even being a small one, is already starting to adopt new technologies and models. Fintech companies in Bulgaria will most probably continue to gain popularity and attract new clients with their better, cheaper and faster services and expand their reach way beyond early adopters and digital enthusiasts throughout 2019. Furthermore, the Bulgarian ecosystem has recently become even more united in its efforts to raise public awareness, as a Bulgarian Fintech Association was founded in the last quarter of 2018. With 10 members at the moment its goal is to provide a common ground for communication and exchange of ideas and it lays steady foundations for cooperation between companies that look like competitors at first glance. While in fact traditional banking and old-fashioned money transfer platforms are the main markets, new generation fintech companies want to bite a chunk of it and their recent success is a clear sign that they most definitely will.