Up to this point, financial technology startups have been hesitant to enter the public markets. And who can blame them? Most fintech companies that have gone public in recent years have seen their share prices tumble, and ample venture capital funding has buffered balance sheets. Still, a major IPO isn’t unthinkable in 2019. Credit Karma and Robinhood are cited as two possibilities, and other large companies may get serious about at least laying the IPO groundwork next year.

Vanessa Colella, head of Citi Ventures at Citigroup Inc.: “I do not think we’ll see any major mergers, acquisitions or IPOs in fintech specifically. Stripe has done some incredible work and has the potential to be one to watch for the IPO track, but ultimately we expect to see continued growth in the private market.”

Lindsay Davis, analyst at CB Insights: “Fintechs have been focused on scaling up, and on products over profit. That mentality is fundamentally flipped when a company goes public.

As a result, many have taken the slow approach to an IPO, and that trend is likely to continue since many of the rumored candidates have enough runway to stay private after record financing rounds in 2018.”

Matt Harris, managing director at Bain Capital Ventures: “In terms of 2019 IPOs, it will be interesting to see if Credit Karma decides to go public. They certainly have the scale and profitability.”

Kyle Lui, principal at DCM Ventures: “Many fintech companies have gained traction and are ripe for acquisition. Truly breakout companies like Robinhood will likely go public in 2019.”

Consolidation picks up

Our experts were unanimous on this one. There are plenty of startups out there that have gained enough footing for incumbents to take notice, but have stayed small enough that an acquisition is still feasible.

Lindsay Davis: “Digital-first ‘challenger’ banks are prime acquisition targets for incumbents. We’d also expect to see the largest fintech unicorns become more active on the M&A front, as we saw firms like Stripe and Credit Karma make more acquisitions in 2018.”

Kyle Lui: “Major U.S. banks have over $100 billion of excess capital and a major appetite for technology. Meanwhile, many fintech companies have gained traction and are ripe for acquisition.”

Arjun Sethi, co-founder of Tribe Capital: “We think there will be a continued increase in M&A interest from large finance companies. I think you’ll see much larger transactions from traditional industry players as well as they evolve and become more tech stack-enabled.”

Zachary Aron, principal in the payments and banking consulting practice at Deloitte: “It’s quite possible to see fintechs looking to continue to combine, to both create scale and a deeper and richer set of capabilities.”

Big tech vs. big finance

While more big tech companies are testing the waters in the finance industry, don’t expect to see the emergence of the Bank of Facebook anytime soon.

Vanessa Colella: “Alibaba continues to make progress there with its large stake in fintech affiliate Ant Financial. And Google has been deepening their work in Asia with Google Pay, which is experimenting with QR codes for peer-to-peer payments. These players are digging in, and we expect that trend to continue.”

Matt Harris: “I’m skeptical that big tech will be more aggressive in fintech in 2019 … privacy concerns will make that hard for many of them. Amazon is the notable exception. Never bet against them!”

Kyle Lui: “Big tech will get into finance, but it will happen slower than people think. Financial services is both slow-moving and highly regulated. It will take time for major tech companies to understand the landscape. Their initial focus will be providing key products for their customer or user base.”

Payments get faster

Next year, expect banks to speed up customers’ experience at checkout lines with contactless cards, which allow consumers to tap the plastic at point of sale, rather than inserting a chip or swiping. Our experts also predict that large banks will continue their push into real-time payments in the U.S., letting more clients transfer money instantly.

Peter Gordon, chief executive officer of the consultancy Payment Relationship Management: “The large banks want to reclaim the payments and do not want Amazon, Apple, Google and others to displace them. The banks understand that the current payment system infrastructure is broken, like our roads and bridges in the U.S. They’ll work to create new rails that are more efficient.”

Linda Kirkpatrick, executive vice president of merchants and acceptance at Mastercard Inc.: “We’re professing the benefits of contactless payments to our financial institution customer base and our merchants. Getting a market to move is a Herculean effort, but I do think we’re there. This is it. This is the inflection point we’ve been waiting for.”

The future of funding

Fintechs can thank the likes of SoftBank Group Corp. for the ample supply of capital, allowing more companies to expand quickly and test new products while remaining private. Most experts said they thought the money would keep flowing, though a turn in the economy could change that dynamic.

Vanessa Colella: “2018 was a year for massive funding rounds, and I can see that continuing into next year. There is a lot of capital in the private sector right now—venture funds have risen up to compete with SoftBank’s war chest, so we’re seeing more venture capital firms like Sequoia raise several billion dollar vision funds, which I anticipate will only continue to increase in size. Those funds will likely be deployed in the next two to three years, resulting in more funding and big valuation bumps in 2019.”

Lindsay Davis: “In the second half of 2018, the data started to show a bigger pull-back in early-stage fintech deals and funding in the U.S., and that could continue heading into 2019. However, there is no shortage of big-pocketed investors like SoftBank actively looking to make fintech investments.”

Frank Rotman, founding partner at QED Investors: “There are a growing number of mega-funds that need to deploy capital in nine-figure chunks so I see the valuation trend continuing for the best businesses in the space. But, if the economy shows any significant signs of slowing, I think the U.S. market in particular will see a modest reduction in availability of capital and rationalization of valuations as VC and PE firms become a bit more cautious in their outlook.”