Time again for one of the technology highlights of the year – Mary Meeker’s Internet Trends report. While Mary covers tons of technology trends in her report, I will summarize the fintech-relevant portions here.  She did make it easier on us this year, as the slide count has shrunk from 355 pages in 2017 to only 297 this year.

For the ambitious, you can see the full slide deck here, and the video of Mary presenting it here.

This year’s overwhelming theme in fintech was payments, so let’s dig in…

Payment Channels Shifting

Slide 18 shows results from a VISA survey showing that 60% of everyday transactions may be done in digital channels, vs. in-store. What I find more interesting is the breakdown of digital transactions. I was surprised to see that payments through Smart Home Devices already hit 3%, while Wearables/Contactless payments sits at only 2%, despite the much longer history of contactless payments and digital wallets over the last few years.

Fintech facilitating e-commerce

Slide 51 showcases Square’s POS system and how Square leverages the data to power multiple services for the offline merchant, including invoices, small business loans, and analytics. Gross Payment Volume for Square has roughly doubled from 2015 to 2017. Affirm also facilitates e-commerce through providing consumer loans to the merchant’s customers. With over 1,200 merchants on the platform, Affirm has handled over 1 million loans.

Consumer Spending

Slides 102-140 have some revealing data on consumer spending. Household debt is now at the highest level ever – above the 2008/2009 levels both in terms of total debt and the average debt-to-income ratio. Consumer Personal Savings Rate is near an all-time low.  While Mary uses this data to lead into how household budgets are shifting due to the deflationary economics of technology, I was struck how no technology/fintech trends have helped increase the savings rate. While there have been a handful of fintech apps that encourage savings, it seems as though the most successful fintech startups have been in facilitating loans, which is bolstered by the macro trends of increasing consumer debt. With this in mind, generalized savings app may face challenges in fighting consumer behavior headwinds.