I had the privilege of attending Money20/20 in Las Vegas in late October. Over three days, I had more than 20 meetings with the best thinkers in payments. Here are my five key takeaways:
- The distinguishing lines between merchants and fintechs continue to blur. Uber created a team called Uber Money that will be responsible for its various fintech offerings, from Uber Wallet and Uber Instant Pay to its credit and debit cards. And Amazon is now enabling utilities bill payments through Alexa devices (using Amazon Pay, of course). We will see more and more of this, I wager (Vegas pun!).
- “Financial inclusion” is a big theme. As it explained its Uber Money initiatives, the company’s main messaging is “financial inclusion”: that is, paying cash-strapped drivers faster and loading debit cards with cash advances. Perhaps it’s a result of our desire to serve values-based consumers, but my take is that more merchants will start to sound like Uber. And there is a wave of fintechs and payments innovators touting solutions to help with just that: with virtual payment cards (e.g., Marqeta), a global credit data system (e.g., Nova Credit), financial data verification, (e.g., Plaid), and installment payments (e.g., Sezzle), to name just a few.
- Especially . . . “empowered” . . . customers mean that criminals aren’t your only fraudsters. Policy abuse — such as returns abuse and promotion redemption abuse — is also on the rise as some consumers take “empowerment” to new levels. They don’t think of themselves as criminals, but they’re energized by outsmarting the system. My take: It’s likely that retailers are underestimating the impact of policy abuse in their fraud management strategies.
- There is more fintech collaboration to come. Whether it’s in the form of more acquisitions, formal partnerships, or even white labeling, today’s highly fragmented payments and fintech market has to consolidate. For merchants, today’s fragmentation makes critical integration and vendor management highly challenging. It’s time for the startups and legacy players to figure out how to simplify onboarding and interoperability in a fragmented landscape.
- Globalization is just really, really hard. “The US is a developing market in payments,” as one payments leader I spoke with observed. US-based merchants can’t afford to apply US-centric assumptions to global markets. They must keep up with the hyper-local payment methods and experiences that global consumers prefer while also staying on top of (frequently) changing regulations, so merchants are looking for payments partners with a local presence and significant investment in the relevant countries. In fact, another payments leader I spoke with said the key to getting the best results from a payments processor in a global market is to actually use two, as the competition forces the best out of both.
Clearly, the payments space is evolving quickly — and I have so many questions: Are payments innovators paying close enough attention to the decentralized digital identity management movement in their payments innovations and ecosystem building? In which ways are the payments networks driving innovation? In which ways might they hinder it? Why am I not hearing more about biometric authentication in all this talk of invisible checkout? Will any of these financial inclusion initiatives make an impact? The list goes on.
Thank you to everyone who took the time to connect with me. I’m curious: What are your burning payments questions? Do you have thoughts about any of mine — or about my key themes? Let’s connect!