We talked to 4 VC investors about the hottest trends in payments and the biggest innovations to keep an eye on

• We spoke to investors at Andreessen Horowitz, Bain Capital Ventures, Citi Ventures, and Insight Partners to learn where they see the next innovations and opportunities in payments tech.
• Mostly, they're looking out for ways that payments companies can do more than just process transactions. That may be through add-on services, or even machine-initiated payments.
• Payments is interwoven into nearly every segment of the fintech landscape, from credit-card processing to online sales, to analytics around consumer behavior.
• Some unicorns making waves in payments include AvidXchange, Brex, Plaid, Stripe, and TransferWise.
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The fintech world is big, and funding is flooding into startups like robo-advisors, neobanks, and alternative lenders.

In the third quarter this year, total fintech funding topped $8.9 billion, a record when adjusted for Alibaba's fintech Ant Financial's $14 billion last year, according to CB Insights. Globally, there are now 58 fintech unicorns (startups valued at more than $1 billion).

Payments is interwoven into nearly every segment of the fintech landscape, from credit card processing to online sales to analytics around consumer behavior. Some unicorns that have made big waves in payments include AvidXchange, Brex, Plaid, Stripe, and TransferWise.

While some say incumbents should fear competition from fintechs, many existing companies are partnering with startups. Marqeta, which provides card issuing, and Plaid, which helps startups link into consumers' bank accounts, have inked partnerships with legacy players like Visa and Wells Fargo.

Incumbents themselves have made bold moves to stay current, like Mastercard's blockchain for shrimp tracking, or American Express' startup-focused corporate card launch. They're also making investments through their venture arms. Amex Ventures has backed Plaid and Stripe; Visa has invested in Marqeta and Finix.

And payments companies are also snapping up ways to expand their services. Earlier this week, payments giant PayPal said it plans to buy Honey, a startup that makes browser shopping add-ons for its customers, for $4 billion, which would be PayPal's biggest buy ever.

We spoke to four investors at leading VC firms about where they see the next opportunities when it comes to payments.

Anish Acharya, general partner at Andreessen Horowitz

Anish Acharya, a general partner at Andreessen Horowitz, sees innovations coming not just from payments companies, but from unexpected players into the fintech space.

The Silicon Valley venture-capital firm is known for its early investments in companies like Facebook and Lyft. In the payments space, it has backed startups including Dwolla and fast-growing cross-border player TransferWise.

READ THE FULL STORY: Uber and Apple are just the start, and eventually every company will want to be a fintech. An Andreessen Horowitz general partner explains why.

Matt Harris, partner at Bain Capital Ventures

Matt Harris is a partner at Bain Capital Ventures, and has helped lead investments in fintechs like micro-investing startup Acorns; AvidXchange, which helps companies pay bills electronically; and payments platform Flywire.

He thinks payments companies need to do more to keep market share, and but that it's still hard to imagine a world where payments come free.

READ THE FULL STORY: A partner at Bain Capital Ventures explains why payments companies need to do more than just move money to survive

Ramneek Gupta, managing director & co-head of venture investing at Citi Ventures

Ramneek Gupta is the co-head of venture investing at Citi Ventures, the VC arm of Citibank. He joined Citi in 2011, and has led investments in companies like payments processor Square, electronic-signature startup DocuSign, and ride-hailing company Grab.

Gupta has his eye on machine-initiated payments, and thinks companies will have to find creative ways to use payments data to make money amid pressures on revenues of simply processing transactions.

READ THE FULL STORY: Citi Ventures is betting on cars that pay their own bills, and its co-head of investing envisions a future where your devices make payments without you

Byron Lichtenstein, principal at Insight Partners

Byron Lichtenstein, a principal at Insight Partners, says opportunities are not just about moving money from point A to point B, but also in the using the data found in and around payments.

Insight Partners focuses mainly on growth-stage software companies across verticals from education to social media to fintech, and it has invested in German neobank N26, business expense management startup Divvy, and payment fraud monitoring startup Sift.

READ THE FULL STORY: An Insight Partners principal says the era of 'dumb payments' is over, and sees opportunities in using machine-learning to combat fraud

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