How Do FinTech Companies Make Money

How Do FinTech Companies Make Money

Digital transformation is happening throughout all industries, and the financial sector isn’t an exception. Many financial institutions are now digitizing operational procedures through data analytics. 

With digitalization, companies can keep up with the latest market trends and stay ahead of the curve. It also enables customers to put a premium on digital convenience over traditional bank services.

As a result, several financial technology (FinTech) companies are thriving rapidly, especially if their solutions are developed by reputed agencies like The latter provides FinTech companies with access to a range of specialized experts and enhanced security protocols. Here's how these companies are generating revenue nowadays. 

P2P Lending

Many FinTech companies have commercial lending space. These platforms match different borrowers to investors, offering peer-to-peer (P2P) lending. They earn by charging fees on the repayment process.

P2P lending is different from an online payday loan or personal loan offered by online lenders. Through this lending solution, borrowers get funds directly from investors without the intervention of financial institutions. 

Investors of P2P loans can be any individuals or companies. Compared to lenders in debt markets, they get higher yields because P2P lending doesn’t have intermediary costs associated with conventional banking and investment models. 

P2P loans usually come with lower interest rates, origination fees, and credit score requirements, making them a very attractive borrowing option to borrowers. FinTech companies will also benefit from this. The higher the number of P2P loan borrowers, the more commission they’ll get. 


An increasing number of FinTech companies offer “robo-advisors,” which act like investment managers in their platforms. Users of these platforms can easily trade on the stock market at incredibly low fees.

FinTech companies earn through robo-advisors like how investment managers earn. They charge a certain percentage of total assets, only cheaper. Real human investment managers often charge 1%, but FinTech companies can offer you these services at around 0.25%. 

The reason for FinTech companies' more affordable charges is that robo-advisors use algorithms. That means they can automatically allocate, manage and optimize portfolios and assets, resulting in more streamlined work, lower overheads, and increased revenue. 

Interchange Fees

One of the major revenue drivers for many FinTechs is interchange fees. They’re transaction fees that a merchant’s bank account pays to a card-issuing bank whenever their customers use their debit/credit cards to purchase from their store. 

Interchange fees are necessary to cover the costs (e.g., handling, fraud, and bad debt) and risk a card-issuing bank has to take in approving the payment. Hence, they’re often shared between the card’s processor, issuing bank, and network. 

FinTech companies benefit from interchange fees when they white label a card. White labeling happens when companies buy their products from another company and rebrand them as their own. 

When the card is white labeled by a FinTech company, the issuing bank shares a portion of its interchange fee with it. While they’re seemingly small (usually just cents), interchange fees quickly add up. 

For example, VISA makes an average of 7.5 cents per transaction. If you multiply that by billions of transactions, FinTech companies may likely get multiple billions of dollars in revenue just from the interchange fees.

Subscription and Flat Fees

Many FinTechs bill their users a certain amount for using their products and services. It’s called “subscription fees,” which are pretty straightforward since the money comes straight from the users themselves. It’s also a good strategy for consumers since free trials enable them to taste FinTech’s products or services before going all in. 

“Flat fees” are another approach that FinTechs use. They’re called the “transactional approach” since FinTechs earn money for every fund transfer. They’re commonly partnered with subscriptions, increasing the profits of FinTechs. 


App advertising is one of the most traditional yet straightforward methods for FinTechs to make money from apps. Advertisers can also purchase users’ data and attention to generate revenue through FinTech companies. Conversely, consumers end up paying nothing (i.e., no interchange or subscription fees) to use an app’s products or services, so this app advertising often works well. 

Many FinTech companies’ sites, especially platforms offering expert advice, generate a lot of income through advertising too. They don’t only earn through advertisements on their sites but also by collaborating with third-party service providers to advertise their services.

Third parties

As mentioned earlier, other FinTechs integrate with third parties, especially those that can offer customers value in some other way. Examples of these are credit scoring tools, accounting services, or health insurance. 

FinTech companies earn by reeling in customers and directing them to their third-party partners. In return, the third parties offer FinTechs a percentage of their revenue. What’s more, they can easily be integrated into almost anything, whether the government, schools, or insurance companies, meaning they’ll have myriad revenue streams. 

Final Thoughts

FinTech companies have several unique approaches to how they generate revenue. They can make money from commissions, fees, advertising, and partnerships. While they may experience challenges in competition, cybersecurity, consumer trust, and regulation, FinTech companies will still thrive since they’re digital—a landscape that’ll continue to encourage innovation and adoption.