📈#007: Consumers are spending crypto, but brands are not ready

Welcome to another global intelligence briefing of Market Mosaic by Rwazi. We are excited you have continued reading our cutting-edge market insights and global economic trends. 📈 Thank you for also filling out our survey last week.

In this week's edition, we explore how fintech innovations are reshaping consumer spending behaviours and expectations by blurring boundaries across payments, banking, investing and commerce. From the mainstreaming of cryptocurrencies and digital assets to the rapid rise of Buy Now Pay Later, we unpack the key trends governing the future of money.

Let's dive into these insights together!

— Insights Team, Rwazi

Our Edition this week:

• Data Spotlight

• The Pulse

• Sector Scan

• Our Competitive Watch

DATA SPOTLIGHT
Mainstream consumers embrace cryptos and digital assets

Cryptocurrencies and digital assets have transcended niche audiences to go fully mainstream across consumer segments. Our data analysis from proprietary sources finds at least 40% of consumers across developed and emerging markets now use or hold some form of crypto/digital assets:

• 23% hold Bitcoin, Ether or other cryptocurrencies as an investment vehicle.

• 18% actively use cryptocurrencies to make online purchases from merchants.

• 12% have invested in non-fungible tokens (NFTs) like digital art or virtual real estate.

• 9% use crypto "cashback" debit cards or rewards programs for everyday consumer spending.

This data hints at a broader consumer appetite beyond just speculation. Enablers like easier off-ramps to fiat currency, crypto-linked payment cards, and loyalty programs are driving utility.

Key Insight: There are gaps in consumer education, with only 27% claiming to fully understand the risks, volatility, and security implications. As use cases like lending, crypto payrolls, and central bank digital currencies (CBDCs) expand accessibility, closing this consumer literacy gap will be key for enabling long-term adoption.

THE PULSE
Featured Chart: Top countries by year-over-year growth in crypto transaction volumes

SECTOR SCAN
BNPL ushering new era of embedded consumer credit

The Buy Now Pay Later (BNPL) industry is upending how consumers access financing and pay for purchases. Led by innovators like Affirm, Afterpay, and Klarna, BNPL startups have rapidly penetrated e-commerce checkout flows and mobile payment journeys.

By seamlessly embedding lending instantly at the point of purchase, BNPL players have tapped unmet demand for flexible, low-friction credit accessed via consumer-friendly mobile apps and online flows. This is disrupting conventional credit card/loan models with outdated digital experiences.

In 2023 alone, BNPL facilitated over $120 billion in consumer lending across retail, travel, and e-commerce. This makes consumer financing common in online brand and merchant experiences. As digital purchase journeys accelerate, over $1 trillion in BNPL consumer spending is projected by 2027.

Key Insight: For brands to stay competitive for digital consumers, integrating BNPL or embedded point-of-sale financing has become an imperative to enhance affordability perception.

OUR COMPETITIVE WATCH
Big fintechs disrupt consumer banking experiences

While BNPL redefines lending experiences, fintechs like neobanks and embedded banking players are disrupting consumer banking distribution and touchpoints:  

Companies like Stripe are embedding mobile checkout financing directly into merchants’ consumer purchase journeys. Others also offer instant access to BNPL at online checkout – injecting lending into any digital commerce experience. 

Incumbent banks are facing immense pressure to enhance user experiences, launch standalone digital banks, and seamlessly integrate mobile lending into non-banking customer journeys. Those failing to match the simplicity, flexibility, and personalization priorities of digitally-savvy consumers will tend to lose primary wallet share.

Key Insight: Fintechs are fundamentally disrupting distribution channels and touchpoints for consumer finance, requiring aggressive digital transformation for incumbents.

WHAT’S HAPPENING AT RWAZI?
Feature on Jobtech Alliance

We were featured on Jobtech Alliance, Together, we're empowering African youth and businesses, as their expertise helps us expand our reach, connecting us with new clients and even refugee communities. This collaboration unlocks valuable insights for companies while creating a network of paid data collection opportunities - a win-win for everyone! You can read the feature here.

Thank you for reading and joining us on Market Mosaic this week. We hope this edition provides valuable, actionable insights for deciding with data. 📊