In the early 1990s,18-year-old Maksymilian Levchin, a Ukrainian-American student at the University of Illinois and a Chernobyl nuclear disaster survivor, maxed out on his credit card, co-signed by his immigrant parents with a mere US$200 spending limit. Upon graduation, he co-founded a successful payments firm with a bunch of friends, many of whom are now among the wealthiest people on earth. Yet, just as their firm was readying its IPO in 2000 he wanted to celebrate by buying a new car. To his horror, he found that while he was incredibly wealthy on paper, he was not considered creditworthy enough to buy the car even with a hefty down payment. So, he paid cash.

Last week, another FinTech firm that Levchin co-founded, consumer credit provider Affirm Holdings, went public, making him a billionaire many times over. He and his former colleagues, including Tesla CEO Elon Musk, Palantir Technologies co-founder Peter Thiel and LinkedIn founder Reid Hoffman, had co-founded the pioneering payment giant PayPal, which is now the world’s 27th-largest company, with a market value of more than US$290 billion ($384 billion). Only one bank in the world, JPMorgan Chase with a market value of US$415 billion, is bigger.

Affirm’s direct listing on Jan 13 with over 100% first-day pop in its shares came just as the broader FinTech segment — tech companies playing in the financial services arena — is on fire. (Singapore GIC, which has a small stake in Affirm, was a key beneficiary of the IPO pop) Listed FinTech firms such as PayPal, Square (market value US$104 billion) and Amsterdam-based Adyen have seen their stocks surge in recent years. PayPal shares were up 110% last year having surged nearly 700% over the past five years. Square shares were up 250% last year having soared 2,200% over the same period as investors chased fast-growing FinTech players. Payment is where the rubber meets the road when it comes to changing consumer behaviour in the post-Covid world. People are no longer comfortable paying cash or swiping their debit or credit cards at the cashier. They are increasingly using apps on their smartphones such as ApplePay, PayPal’s Venmo or Square’s CashApp to pay for things.

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