New BCG and QED report reveals the fintech industry’s strongest fundamentals to date—poised for its next wave of disruption through breakthrough technologies, disciplined growth, and new market penetration
Global fintech is entering a new era of maturity and momentum. According to a new report from Boston Consulting Group (BCG) and QED Investors, Fintech’s Next Chapter: Scaled Winners and Emerging Disruptors, the sector has emerged from a tough funding environment stronger, more disciplined, and with greater growth prospects than ever.
In 2024, fintech revenues grew by 21%—up from 13% in 2023—marking a threefold acceleration over the financial services industry at large. Meanwhile, the average EBITDA margin of public fintechs climbed to 16%, and 69% of public fintechs are now profitable. Importantly, much of this performance is being driven by a new class of scaled players generating $500 million or more in annual revenue. These now account for approximately 60% of total fintech revenues.
“A class of scaled fintechs is coming of age. Investors are demanding greater maturity, and regulators want more accountability,” said Deepak Goyal, a managing director and senior partner at BCG. “Meanwhile, emerging disruptors are harnessing next-generation technologies like agentic AI and pioneering new business models, pushing established players to continuously innovate.”
In Africa, mobile-driven fintechs and those solving real-world challenges lead the way
While the Middle East and Africa are still very early in their fintech growth story, accounting for less than 1% (~$3 billion) of scaled fintech revenues, the African fintech sector is experiencing rapid growth, driven by a combination of economic expansion, high demand for financial services, and innovative solutions addressing longstanding gaps in access and affordability.
Investment and activity within the sector are highly concentrated in four key markets—South Africa, Nigeria, Egypt, and Kenya—which collectively attract approximately 67% of fintech investment on the continent.
Several structural challenges have historically hindered financial inclusion in Africa, such as low penetration of traditional bank accounts and credit access, particularly among individuals and small and medium enterprises (SMEs). High costs of maintaining physical bank branches, limited digital infrastructure, and low financial literacy have contributed to these gaps. However, rising smartphone adoption and increased investment in digital platforms are enabling fintech companies to deliver innovative, scalable solutions.
Fintechs serving the needs of un- and underbanked consumers through mobile, which is seeing rapid growth in penetration, have gained the most momentum here. Telcos have formed some of the most successful fintech platforms, such as M-PESA and Orange Money.
The primary fintech verticals fuelling this growth are payments, banking and deposits, and lending.
“Payment solutions, including digital wallets, remittances, and B2B payments, dominate the landscape, as they address the continent’s transition from cash-based economies to digital transactions,” said Kitso Lemo, Associate Director at BCG, Johannesburg.
Lemo adds that payment tools play a crucial role in today’s economy. “For consumers, they enable secure storage and transfer of funds both locally and internationally, while also helping individuals build emergency savings and reduce vulnerability to financial shocks. For SMEs, digitising payments is truly transformational – it reduces the high costs and risks associated with handling cash, accelerates settlement times from days to seconds, and creates a verifiable transaction history that is essential for accessing credit and supporting business growth.”
Another key area of focus for fintech innovation in Africa is strengthening the merchant payment value chain. By integrating payments seamlessly into merchant operations, fintechs enable small and medium enterprises to access a wider customer base and benefit from streamlined transaction processes. Enhancing digital payment solutions for merchants can drive broader adoption of cashless transactions, improve business efficiency, and foster economic growth.
According to Lemo, lending is also a significant vertical, encompassing secured and unsecured personal and business loans, as well as buy-now-pay-later and point-of-sale financing.
Notable fintechs include firms like Moove, which provides vehicle financing for ride-hailing drivers across Africa, and PayJustNow, which has 2.6 million shoppers and 3 000 merchants, boosting basket sizes for merchants and providing convenient, interest-free instalments for consumers. Companies such as Tala in Kenya leverage mobile and social data to build credit scores for underserved populations. These models demonstrate an emphasis on solving real-world challenges through technology, particularly in mobility and device access.
High remittance costs highlight urgent need for innovation
In 2024, according to BCG’s global payments model, cross-border payment flows in the Global South represented $14 trillion out of an approximate total of $1,637 trillion in global payment volume, domestic and cross-border.
BCG and QED Investors’ report highlights that in many corridors, particularly those to and from the Global South, correspondent banks add significant friction and cost when it comes to cross-border payments. These banks often add $10 to $50 in fees to a cross-border payment, which can represent a significant portion of a low-value remittance. And while SWIFT has been investing in speeding up settlement times, with SWIFT gpi settling payments in many of the top routes between Global North countries within minutes or even seconds, there are still regions—including large parts of Africa, Latin America, and Central Asia—where funds can take days to arrive, compounded by banking hour cut-off times.
Remittances remain a critical and costly service. Average fees in Africa are around 7-8% per transaction—well above the World Bank’s target of less than 3% by 2030. The complex remittance value chain and risks associated with currency fluctuations and cash handling drive these high costs. “There is significant scope for innovation in this area, including blockchain and crypto solutions, which could reduce costs and enhance interoperability among financial institutions and telcos,” said Lemo.
In addition, lending continues to be essential for both individuals and businesses in Africa. Expanding access to secured and unsecured loans, as well as innovative products like buy-now-pay-later and point-of-sale financing, provides the financial stability necessary for growth and entrepreneurship.
“As fintech platforms continue to develop, these improvements in merchant payments and lending are set to play an essential role in empowering businesses and boosting financial inclusion,” said Lemo.
As revenues jump, fintech is ready for even more growth
Among the key findings of the report:
· Fintech revenues surged 21% in 2024, outpacing the 6% growth rate of incumbent financial services players. In the Middle East and Africa, fintech penetrates about 1% ($0.6 trillion) of banking and insurance revenues.
· Public fintech profitability jumped, with EBITDA margins rising from 12% to 16%, and 69% of public fintechs now in the black.
· AI is already reshaping the industry: Many early-stage fintechs are ahead of their larger peers in leveraging AI—particularly for software development. Agentic AI is the next wave of disruption, and will change the game in commerce, vertical SaaS, and personal financial management.
o The evolution of fintech in Africa is also marked by the adoption of AI, which is being used for customer value management, advanced credit scoring, and delivering efficient, multilingual customer support at scale. In credit scoring, AI enables the analysis of alternative data sources—including transaction histories, social networks, and business activity—offering a more accurate assessment of risk for individuals and small businesses that may lack formal credit histories. This results in broader access to credit and more tailored financial products. AI has the potential to further lower costs and improve financial access.
· Fintechs are IPO-ready, but patient: 150 private fintechs founded before 2016 with over $500 million in cumulative equity remain on the sidelines, with many poised to go public.
· Massive white space remains: Fintechs still penetrate only 3% of global banking and insurance revenue pools—leaving vertical and geographic gaps to be filled.
o Two-thirds of scaled fintech revenues come from the US and China, yet regions like the Middle East and Africa and parts of Latin America and Asia-Pacific are still relatively underpenetrated and ripe for growth. In some scenarios, models of scaled fintechs in the US and China can be successfully replicated in other markets; in others, investors will need a perspective on what models will succeed given local idiosyncrasies.
· Challenger banks are scaling fast: 24 institutions with over $500 million in annual revenues are growing deposits at 37% annually—30 percentage points higher than traditional banks.
o Several challenger banks plan to sustain or accelerate their growth by expanding internationally. Revolut, for example, is expanding in Mexico, South Africa, and India, among others.
· Private credit is emerging as a key tailwind for fintech lending, establishing itself as a core funding partner. A $280 billion white-space opportunity remains for private credit funds to acquire fintech-originated loans.
“Fintechs are winning in spaces where traditional banks have largely ceded the competitive ground, such as banking for lower-income households and buy now, pay later,” said Nigel Morris, managing partner at QED Investors. “Fintechs are growing three times faster than incumbents as they leverage digital distribution channels and increasingly utilise AI. Having emerged from the last two years with stronger fundamental unit economics and high net promoter scores, it’s easy to see why there’s an appetite for IPO-ready companies that deliver profitable growth. Fintech is ushering in a new era in financial services.”
Overall, the African fintech landscape is characterised by rapid user growth—estimated at around 600 million mobile financial service users—and an expanding range of services.
“Continued innovation, regulatory support, and a focus on interoperability will be crucial to sustaining the sector’s momentum and supporting the continent’s broader economic advancement in the years ahead,” concludes Lemo.
Download the report here.