How quickly does an innovation go from novelty to habit? Two years ago, we had not even heard of Revolut.  This summer we paid for everything with it during our travels.  We thought nothing of loading up the prepaid card with its easy to use app, and then paying using its contactless card technology. We no longer had the hassle of taking wads of banknotes on holiday and being left with change that goes into a wallet at home, unlikely to be used again. We could make same day transfers from different accounts that would take our bank three days or longer.  Most importantly, we no longer were charged the superfluous foreign currency transactions fees and uncompetitive foreign exchange rates by our bank.  We are certainly not early adopters (Revolut has four million users already) but if you do not have a Revolut card and you are a travel frequently, then it comes highly recommended (we even have a referral code if you would like!). In a short space of time, Revolut and others have changed how consumers make foreign exchange transactions and disrupted major revenue streams for legacy banks.   It is just one example of how “fintech” has gone mainstream and is now an actual investment category. 

From a consumer standpoint, much of the innovation in the payments sector has come from industry leaders Mastercard and Visa as they have shifted the payments ecosystem away from cash and onto card and other digital means. Their contactless technology for low ticket payments has sped up the checkout process in stores, reduced the need for coins and change and improved the security and compliance of transaction. It has been a key driver for the strong share price performance of both companies and is a key reason why we regard them as technology companies.

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