At Money20/20, payments take center stage

From brands you know (think Uber) through to brand new startups, the future of payments continuing to evolve well beyond debit and credit cards.

Uber’s Head of Payments Peter Hazlehurst perhaps put it best in his Money20/20 keynote when he talked about ways to measure the success of a payments ecosystem: for consumers to make the most of it, it needs to be frictionless. For Uber drivers, that means giving them access to funds as they are earned. The bottom line is, Uber wants to change the way financial services are provided to their drivers and their customers.

Uber’s Peter Hazelhurst announcing Uber Money on stage at Money20/20.

The idea of real-time payments is something consumers take for granted in an always-on, always-connected world, but the technology to make it a reality is highly complex. The future of payments infrastructure and breaking down barriers was a key theme of this year’s Money20/20 USA conference.

The drive by many businesses to become “borderless” has its challenges. For firms that want to bring digital payments to new markets, they have to establish multiple relationships with multiple processors in each market where they want to do business, something that creates a great deal of headaches. As part of a new collaboration with Visa, Marqeta is tackling those challenges head on in the Asia-Pacific region. The partnership will allow fintech companies in 10 countries across the region to get up and running quickly. (Check out the details in Pymnts.) The increase in digital payments globally (both plastic cards and digital wallets) has contributed to a steady shift in the way consumers pay for things and the forms of payment merchants accept.

In a panel debate about the decline of cash globally with Omri Dahan, Marqeta’s CRO, Square’s Demetra Airaudi talked extensively about Square’s 2019 research study conducted in partnership with Harvard University, which looked at the implications of a cashless society from both consumer and merchant points of view.

“We are seeing people pull out a card for smaller and smaller purchases,” said Square’s Demetra Airaudi. “While many believe a truly cashless society is still a ways away, the jingling of coins in your pocket or at the bottom of your purse may soon be a thing of the past.”

Using less cash means that there’s also less need to visit a bank. According to the FDIC, cash represented just 30% of all payments in 2017. That may be one reason why “challenger” banks continue to gain a stronger foothold in the United States. At Money20/20, the founders of Chime, Varo and Grasshopper made a strong case about why there is a need to create an alternative to traditional banks. “The notion that you have to be a bank to offer banking services isn’t true,” said Chime Founder and CEO Chris Britt.

The leaders of Varo Money, Chime and Grasshopper Bank talking about the digital banking revolution.

The numbers back up their position. Marqeta’s 2019 Digital Banking Survey found that despite some hurdles that still must be overcome around trust and confidence, consumers are doing more of their banking on digital and mobile platforms. Two key takeaways from the survey: 66% of people already do the majority of their banking online; and 75% of them would consider a digital-only bank if they changed banks. The second figure may come as a surprise to many, but so-called traditional banks already see their mobile apps as the new ‘front door’ and are working hard to up their game.

For Marqeta’s founder and CEO Jason Gardner, disruption in the payments space is all about opening doors for innovators around the globe to deliver new payment experiences to their customers.

In his keynote, Jason Gardner talked about the experience of building his company and what he hopes his lasting legacy will be (hint: it’s all about having a global impact). Watch the session here.

“We are maniacal about delivering what our customers need,” said Gardner. For all the players in the space, putting customers front and center is what they hope will distinguish them from the others.