So far, there have been 491 venture capital deals in payments for the first half of 2022. That count isn’t keeping pace with the ultimate total count for last year when 1,433 deals were closed, according to PitchBook data. The dollar amount is also off, with just $16.93 billion raised for the first half of this year, compared to $32.2 billion for all of last year.

PitchBook attributed a decline in investment exits so far this year to the dramatic slowdown in initial public offerings. Last year, payments companies tallied $81.6 billion in exits, moving at a much faster pace than the $1.47 billion in exits for the first half of 2022.

In terms of such exits, PitchBook analyst Robert Le predicts this year will bring more mergers and acquisitions instead of IPOs because established fintechs will look to buy smaller peers that specialize in a particular area of the industry.

Additional research into payments venture capital activity points to a slowdown compared to last year. According to an analysis from CB Insights, payments startups last year raised a record $32 billion across 662 deals.

Still, venture funding for the fintechs overall dropped 23% in Q2 2022 from the first quarter.

Jordan Rubio, PitchBook’s data visualization editor, attributed the rise in digital financial services to the COVID-19 pandemic, during which consumers gravitated to fintech platforms and away from brick-and-mortar transactions.

Some payments firms, including the digital expense management firm Ramp have continued to raise money this year, as did its rival Brex late last year.

“Digital payments, one of the earliest financial segments to go digital, has continued to see rapid disruption during this period,” Rubio wrote in the payments sector analysis. “Checkout platforms have benefited from demand for online and contactless transactions, remote working has driven a need for payroll software providers, and corporate credit card providers like Ramp and Brex have reportedly seen revenues surge.”