Twenty One Things We Learned at the Payments Innovation Summit
The Payment Innovations Summit brought together a broad range of senior level payments executives to review the contemporary payments landscape and offer perspectives on this fast-changing field. It was a worthy investment of time to get a highly detailed snapshot of an industry experiencing monumental change. Here are some of the key take-aways.
- The most disruptive force in payments? “The socially connected consumer”, according to Les Matthews, SVP of Business Development at Mastercard. The most socially-savvy consumer consumer is on a constant cycle of discovery, comparision, navigation and interaction.
- Consumers want it all — brick and mortar experiences, immediate gratification, digital information at their fingertips and an integrated, omnichannel experience. It may take a cultural change for the payments industry to solve that. Start by focusing on the experience, not the transaction.
- Last year, $25 billion dollars were invested in FinTech — double what was invested in 2014.
- “Consumer experiences are shaping our expectations of businesses” — Becca Stone, American Express VP of Innovation on the impact Uber and Lyft payments on consumer psychology.
- Mobile payments have been relatively slow to take off, as a lack of common standards continues to fragment the marketplace and inhibit merchant adoption.
- There’s a lot that’s currently broken in B2B payments, including the use of checks limiting visibility into the payment stream and driving up handling costs, and cash flow delays caused by pervasive late payment of invoices (up to 30%).
- Customers care more about value, track record and convenience than loyalty or rewards, according to Amazon’s GM of Payments, Ashwin Raj.
- How does Amazon create value? Driving convenience from 2 day shipping, towards 1 day shipping and 1 hour shipping.
- Charities still receive the bulk of their payments in check or cash. Only ~13% comes online, with 5% coming from mobile, though those numbers are increasing, according to Paul Lamb, co-founder at Change the World.
- Millennials indicate they would switch to companies that financially support social/good causes. However, credit card users who can donate loyalty points to charity mostly use them on material goods.
- 71% of millennials would rather go to the dentist than listen to what their bank is saying (Scratch Viacom survey).
- Baby boomers worry about personal security and accept paying fees for services. Millennials are used to getting services for free, often in return for social information.
- Only 20% of people in the U.S. with Apple phones use Apple Pay.
- There are over 250 thousand bitcoin transactions taking place every day and that number has rapidly grown the last few years. However, it’s still not close to PayPal’s rate of 110 transactions per second.
- Merchant adoption of bitcoin as a payment option is going up, with organizations like PayPal, Overstock, the American Red Cross, Virgin, Zynga, Expedia and others accepting bitcoin, and forty to fifty new merchants coming online daily.
- Merchants like bitcoin because it allows them to sell globally, with borderless payments, eliminate chargeback fraud and bitcoin processors like BitPay offer a lower transaction fee than credit cards, according to Sonny Singh, Bitpay’s CCO.
- PayPal is increasingly focused on partnering in commerce, where the PayPal brand is not always front and center, but part of a seamless check-out experience for brands like AirB&B.
- Segmentation will continue to exist, with third-party and proprietary digital wallets coexisting to solve needs for specific market segments, according to Wells Fargo’s SVP of Enterprise Payment Strategy, Ashish Kurani.
- Innovative financial tech includes apps like FeeX, which helps consumers understand the fees they pay on IRA and 401K savings, and potentially find similar services for less.
- Apps like Venmo take the awkwardness out of managing social payments, such as splitting the cost of meals and vacation rentals, although the service can cause “venvy” as users see what their friends are up to, according to Esther Jang, Venmo’s Head of Strategy.
- Beyond managing payments, social apps like Venmo act as recommendation engines, with millennials more trusting of services that their friends currently use.
Kiosk provides a variety of marketing services to a number of clients in the financial services industry, including PayPal, City National Bank and Florin Pensions. If you’re interested in tapping into our financial expertise, get in touch.