Expanding beyond borders: how European fintechs can ‘Make it in the USA’

European fintech firms aiming to enter the US market face a formidable challenge. While the market offers immense growth potential, it is fiercely competitive. Disruptors seeking to revolutionise entrenched legacy payment systems often encounter significant resistance. Compounding these challenges, fintech funding has dropped sharply—by a staggering 91% since 2021—reflecting growing caution among investors.

As co-founder of a Netherlands-based technology innovator, one key insight over recent years has been the importance of tackling these hurdles strategically. Innovation is critical, but true success hinges on a deep understanding of U.S. market dynamics and investor expectations. Armed with this knowledge, fintech firms can navigate challenges effectively and uncover opportunities even in a tough environment.

Overcoming Legacy Challenges: How US Fintech Can Innovate

Four years on, the global pandemic continues to cast a long shadow over the US economy. Inflation remains high, energy costs persistently strain household budgets, and consumer trust has significantly eroded. This decline in confidence presents a serious challenge for new businesses, especially those that need to establish credibility with both consumers and enterprises.

While the US fintech sector is often perceived as the world’s most lucrative, it lags behind in certain key areas—particularly in its reliance on outdated technologies. One notable example is the bank-to-bank transfer infrastructure. Although peer-to-peer payment apps like Venmo and Cash App have gained popularity, they primarily serve as workarounds for the gaps in the US banking system, rather than addressing the underlying issues directly.

The US also continues to play catch up on other technological innovations such as tap-to-pay, QR-code payments, and ‘super apps’ (which cluster payments, banking, and shopping together), all of which have yet to gain widespread traction among consumers. Cash continues to reign supreme in the US, with 67% of Americans favouring it over other payment methods, compared to only 11% in the UK.

The cautious approach to fintech adoption in the US goes beyond consumers and extends to the industry itself. Much of the country’s payment infrastructure is built on outdated systems that are difficult to modernise, creating significant barriers to innovation. Fintech companies that focus on modernising these legacy systems are well-placed to gain a competitive advantage.

Although consumer behaviours in the US have shifted in recent years, there remains a general reluctance to adopt new financial technologies. However, this presents a clear opportunity: Americans are quick to embrace innovations that directly address pressing challenges and deliver tangible value.

To succeed in this landscape, a strong and compelling value proposition is essential. Fintech companies that tackle inefficiencies in the system with practical and creative solutions are more likely to earn the trust of cautious consumers and achieve success. But there is a different approach, focusing not on end-users but on the underlying payment infrastructure. By addressing the challenges faced by banks and payment processors, this allows a repositioning as a transformative force in the industry.

The Evolution of Fintech Funding in the US

The fintech boom of the early 2020s has undeniably lost momentum. Since 2022, fintech investment has dropped sharply, with major deals becoming increasingly scarce. By the first half of 2024, the US recorded only five deals exceeding $1 billion, all of which were buyouts. The IPOs and mega-venture funding rounds that once dominated headlines now feel like relics of a bygone era.

Investor priorities have undergone a seismic shift. Where enthusiasm once fuelled ambitious ideas and early-stage startups, today’s investors are far more discerning, demanding proven business models, experienced leadership, and tangible results. The era of funding untested concepts is over. To survive and thrive, fintechs must not only demonstrate innovation but also prove their resilience in an increasingly competitive and cautious market.

Amid this challenging landscape, we made its US debut in 2023 with a bold mission: to modernise the payment industry’s ageing infrastructure. Their goal goes beyond faster transactions—they aim to transform how payment data is processed, analysed, and utilised.

Unlike many US payment companies still reliant on outdated legacy systems, a cloud-based platform provides a critical upgrade. By enabling faster, more transparent processing and delivering real-time, actionable insights, their solution enhances customer experiences, mitigates fraud, and powers cutting-edge payment innovation. In a period of economic uncertainty and investor caution, this value-driven approach is a blueprint for the kind of meaningful innovation the fintech industry now demands.

Results over Rhetoric

Launching a fintech in today’s US market requires more than just an ambitious idea. Success depends on presenting a clear, impactful value proposition, addressing the market's specific challenges, and building a team capable of navigating complex regulatory and operational hurdles.

But there is clear proof that even in a tough economic climate, fintechs focused on solving practical problems and modernising outdated systems can unlock significant opportunities. By emphasising substance over spectacle and delivering solutions that foster real progress, European fintechs are well-positioned not only to enter the US market but to lead its next wave of innovation.