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The intersection of fintech and e-commerce is becoming one of the most dynamic areas in the digital economy, offering a wealth of opportunities for innovation and investment. As consumers increasingly embrace online shopping and merchants expand their digital footprints, the demand for seamless, secure, and efficient payment solutions has never been greater.
While most of the early innovation in this vertical was mostly around payments, the opportunities today expand well beyond this narrow space. Fintech is now revolutionizing how e-commerce platforms manage credit, how merchants fight fraud, manage cross border transactions or manage their cash flow and financial operations, and how consumers get refunded. This innovation, turbo-charged with the recent advances in Generative AI and embedded fintech is unlocking new ways to enhance customer experiences and streamline operations.
At Viola Fintech, we see this convergence as a critical driver of the next wave of growth in digital commerce, fueled by advancements in AI, regulatory evolution, and the proliferation of embedded financial services. In this overview, we’ll dive into some of the areas where we see most of the potential for building new leaders in this vertical.
The E-commerce Market: Explosive Growth and Potential
The e-commerce industry is one of the fastest-growing sectors globally, driven by advancements in technology, changing consumer behaviors, and the growing accessibility of the internet.
The global e-commerce market was valued at approximately $5.7 trillion in 2022 and is projected to reach $8.1 trillion by 2026, reflecting a compound annual growth rate (CAGR) of around 10%.
The COVID-19 pandemic had a transformative impact on the e-commerce industry, accelerating trends and changing consumer behaviors globally. U.S. e-commerce penetration rose from 16% of retail sales in 2019 to 19% in 2020, achieving levels originally expected by 2025.
Today, the industry is still experiencing some major tailwinds that fuel its continued growth. Increased smartphone and internet penetration, rising trust in online platforms, rapid adoption of digital payment methods and progress in cross border trade all indicate that e-commerce is here to stay.
It’s all personal: Ecommerce brand owners are influencers
The e-commerce landscape is undergoing a shift, driven by a new wave of digitally native sellers who are not only operators but also builders of the very infrastructure tools they rely on. These sellers, often millennials and influencers, are trendsetters who harness their social capital to drive demand for the technologies they build through FOMO.
Engaging with sellers often requires a highly personalized sales motion, where founders must cultivate authentic, direct relationships with sellers. Unlike traditional vendor-led outreach, this group values human connections over brand recognition—for example, attending “Noam’s event” is far more compelling than an invitation from “Vendor X.” Additionally, as this is often a tightly-knit industry, referrals from other trusted operators within this ecosystem hold unparalleled value, serving as a powerful driver of credibility and adoption. These unique dynamics highlight the importance of personalization, community-driven outreach, and leveraging peer networks in the evolving e-commerce space.
Platform is King
The dependency of e-commerce merchants and vendors on dominant platforms like Shopify and Amazon shapes the dynamics of the industry in both enabling and constraining ways. Vendors often build solutions tailored for these platforms, which facilitate adoption by merchants already embedded within the ecosystem. However, this reliance also lowers vendor loyalty, as merchants can easily switch between similar offerings due to platform standardization and due to the increasing consolidating of solutions. Another dynamic, sometimes referred to as “platform tyranny,” imposes additional challenges: platforms enforce stringent “compliance” requirements, from Minimum Advertised Pricing (MAP) to maintaining customer ratings. This gave rise to the need for “insurance” and “compliance” like solutions.
Compounding these challenges is the Shopify ecosystem’s limited total addressable market (TAM) of roughly 15,000 key merchants. This fosters fierce competition among vendors, driving up customer acquisition costs and intensifying the need for differentiation and driving real value in a commoditized environment.
Transactions: The Heartbeat of E-commerce
Transactions are more than financial exchanges; they are the critical nerve center of e-commerce success. Fintech solutions are revolutionizing how merchants manage, process, and optimize these interactions.
Top Trends Transforming E-commerce Fintech in 2025
1. Finance operations: Relying on a Single Source of Truth
As the e-commerce industry matures and becomes more sophisticated, managing the operations around the financial aspects of the business poses a greater challenge for merchants. Tasks related to bookkeeping, accounting, reconciliation, pricing, tax and spend management are human labor intensive and error prone. Those are only some of the areas which are ripe for disruption using AI and process automation. However, this data sits across many siloed systems; reconciling data from order management systems, payment gateways, bank accounts and ERP is practically mission impossible.
Moreover, while many merchants did start their journey as an e-commerce pure-play, sometimes even on one platform, natural evolution drives many of these merchants to expand into more than one platform as well as to omni channels, making the problem of financial reconciliation, planning, analysis and reporting even worse. The AI era creates a myriad of opportunities for startups to deliver innovative solutions for these use cases. But for those use cases to work flawlessly and drive value, they must all rely on a clean, contextualized, single source of truth of reliable data.
Viola Fintech’s recent investment in Blue Onion is a testament of our conviction in this need. Blue Onion provides a single source of truth for clean financial data, powering business operations and automating workflows for e-commerce companies. The Blue Onion Subledger consolidates transaction-level financial data across systems, eliminating the need for expensive data connectors and significantly reducing ERP reliance. Moreover, it delivers what legacy systems cannot: accuracy and speed through reconciliation and automated workflow in daily bookings.
2. Payments: Personalized Payment Experiences
AI is revolutionizing payment experiences by introducing hyper-personalization at every touchpoint. With advanced models, payment systems can now analyze user preferences, behavior, and spending patterns to offer tailored payment options, ensuring a more relevant and satisfying experience with better conversion rates. For instance, personalized checkout processes adapt to affiliate sources, dynamically modifying the payment interface based on how the customer arrived at the platform. Additionally, contextual payment options, such as one-click payments for subscriptions or tailored financing plans during high-value purchases, ensure that users have payment choices that align perfectly with their immediate needs.
Voice-activated payments further demonstrate the convenience AI brings to financial transactions, enabling users to complete purchases through simple voice commands while ensuring security with advanced voice recognition technologies.
One interesting example of innovation in the payment experience space is Tandym, enabling merchants to create a branded payment method, increasing their brand recognition and customer engagement, and offering a faster checkout experience. Tandym also gives merchants an uplift in the bottom line by reducing processing fees and unlocking revenue share opportunities.
source: Tandym
3. Infrastructure: Blockchain and Cryptocurrency Integration
Stablecoins are set to revolutionize e-commerce in 2025 by addressing key inefficiencies and unlocking new opportunities in payment systems. Traditional methods, such as credit cards, come with high processing fees—often exceeding 3%—and are susceptible to growing chargebacks, draining merchant revenues and increasing operational costs. Stablecoins offer a powerful alternative, enabling near-instant, low-cost transactions that bypass intermediaries. Their benefits extend further to international and cross-border payments, where they dramatically reduce costs compared to conventional systems, which are often riddled with high currency conversion fees and lengthy settlement times. Moreover, stablecoins provide enhanced transaction security through blockchain technology, minimizing risks of fraud and unauthorized access. By improving payment efficiency, lowering costs, and bolstering security, stablecoins are poised to empower e-commerce businesses with greater financial flexibility, enabling them to thrive in a globally connected marketplace.
Nilos, a Viola company, offers an approach where money can move like data using stablecoins and solve those problems reducing costs, chargebacks and improving working capital.
source: Nilos
4. Fraud Prevention: Harnessing the Power of AI
As e-commerce scales and more money is being transacted, it is a natural and unfortunate by product that more fraudsters will be attracted to this industry as well. Fraud chargebacks, stolen credentials and credit cards, money laundering and even terror financing all can thrive with a lack of strong technological countermeasures. Moreover, GenAI is not only harnessed by merchants and technology vendors. It is also leveraged by nefarious players to create fraud at scale by mass production of false documents and deep fakes. As a result, anti-fraud tech solutions driven by advancements in AI-powered risk management, behavioral biometric authentication, and real-time transaction monitoring will be in high demand. Machine learning enables dynamic risk assessment by analyzing vast datasets to detect subtle patterns and anomalies, offering merchants predictive and adaptive fraud prevention. Behavioral biometric authentication adds another layer of security by analyzing unique user behaviors—such as typing patterns, device interactions, or navigation habits—making it significantly harder for fraudsters to bypass authentication systems. Real-time transaction monitoring further empowers e-commerce and marketplaces to identify and mitigate suspicious activities instantly, protecting revenues while maintaining seamless user experiences.
Drawinium provides businesses with full visibility into user behavior across all touchpoints, enabling smarter risk decisions and real-time threat response. Darwinium enriches decisions at checkout with behavioral context from the entire customer journey, empowering e-commerce merchants to detect and adapt to evolving threats instantly.
source: Darwinium
5. Credit: Embedded Financing for Sellers and Buyers
Small businesses were historically neglected by the mainstream financial services industry. E-commerce sellers are no different: seasonality, non-standard data sources, fast growth and innovative business models make it hard for traditional lenders to lend to such businesses.
However, where traditional Financial Institutions see risk – we see an opportunity: new data sources are the food for AI-based credit risk models, API-zation and platformization make it easier to embed credit offering and optimizing it to the point, time, and specific need – buying inventory, paying for advertising, or financing an invoice.
In the B2B e-commerce sub-sector, the opportunity is even larger but harder to crack. On the one hand, many more merchants are selling and buying cross-borders where payments cycles are longer and credit is more desperately needed. On the other hand, there are many platforms and data is much more heterogenous making credit decisioning and embedding at scale more challenging for Fintechs.
Viola’s portfolio company, Defacto, is a good example for a company that provides embedded invoice financing , inventory financing and supplier discounts for SMBs in B2B e-commerce marketplaces such as Penny Lane and others.
source: Defacto
