In a year filled with unexpected challenges and a COVID-era economic climate that proved fatal for many companies, PYMNTS was lucky to hear directly from the front lines how scores of company leaders and industry experts were coping with the crisis and turning conflict into opportunity.
Take a look (and have a listen) at our 10 favorite podcasts from 2020.
How ‘Contact Us’ And The Kardashians Ignited Afterpay In The US
Twelve months ago, before the coronavirus had even arrived on American soil, we spoke with Afterpay CEO and Co-Founder Nick Molnar – also dubbed Australia’s youngest self-made billionaire – about how he turned a secondhand jewelry site in his college dorm room into a cutting-edge buy now, pay later (BNPL) FinTech that dialed into how millennials shop.
As much as a click from the Kardashians helped spread the brand awareness and jump-start his company, Molnar said, as a spending trend among young consumers set the stage for BNPL’s success.
“When you look at the spending graphs for millennials at that time, debit was growing at twice the speed of credit, but the average order value was much lower, which correlates with the lower disposable income in the demographic at the time,” Molnar noted. “This was a generation that was spending differently, wanted to spend their own funds and needed a solution with more flexibility, without all the extra charges that come with a revolving line of credit.”
Fast-forward to the present, and Afterpay now counts more than 11 million active customers at 63,000 retailers – and most recently reported doing $2.1 billion in sales for the month of November alone.
Is 2020 Healthcare’s Year To #KillTheCheck?
While steady progress is being made, especially with individual consumers, to eliminate the use of paper checks, much work is still needed on the corporate front. In February, Ingo Money CEO Drew Edwards said it may take another year or two, but there’s no denying that instant disbursements are gaining ground.
Although Edwards said that only 10 percent of consumers want to be paid by check, about 40 percent are still paid that way.
“In our crazy banking system, you don’t actually have to prove who somebody is to put their name on a piece of paper and stick it in the mail,” he noted.
That’s because paper becomes the default method of payment when something goes awry — such as when banking credentials can’t be authenticated or identity cannot be verified. While there is still more work to be done, Edwards called the progress made evolutionary, considering they’ve gone from nothing to 60 percent in a relatively short period of time.
JPMorgan: Real-Time Treasury A Key Driver Of Corporate’s Loyalty
From the back-office bean counter to the overseer of cybersecurity and anti-money laundering (AML) compliance, the modern corporate treasury has undergone an extreme makeover in recent years that goes well beyond its historic roots in cash management.
According to J.P. Morgan’s EMEA Head of Wholesale Payments Shahrokh Moinian, technological innovation is helping to unlock more opportunities for corporate treasurers to step up to this newfound strategic role of mitigating risk within their organizations.
“All of these changes we’re seeing are the result of a few mega-trends,” Moinian said. “One is regulatory trends, where regulators are looking to increase competition in this field and drive innovation. The other is technological innovation. Overall, these trends mean there are more electronic means of transferring money.”
Add in the current climate of heightened geopolitical uncertainty, trade disputes, foreign exchange volatility and regulatory complexities, and corporate treasurers have their work cut out for them, often with reduced budgets and slim staffing.
Mastercard’s Ethoca On Helping Merchants Grapple With The Upcoming Chargeback Deluge
Just a few weeks after the U.S. lockdown in March, Johan Gerber, executive vice president of cyber and security products at Mastercard, was already predicting that a deluge of chargebacks was headed our way.
With unemployment soaring and the economy in a free fall, Gerber noted the inevitable reality that companies would be inundated with disputes, cancellations and demands for refunds from consumers.
The payments ecosystem, of course, is not and will not be immune to the seismic impact and aftershocks of the coronavirus. The effects are most immediately felt by the travel and hospitality verticals, along with a number of eCommerce segments. Purchases, events and trips are being canceled.
“We are living in history-making times, and the groundswell of chargebacks is just beginning,” Gerber noted. “If we view Asia-Pacific as a leading indicator, the current increase in refunds in the rest of the world will be followed by a steep increase in chargebacks,” he accurately predicted.
Disrupting Traditional Payroll For A New Economic And Global Normal
Of all the many weaknesses revealed by the global pandemic, the number of households living paycheck to paycheck with no savings whatsoever would have to be high on the list.
Taking this into account, said Ceridian Chairman and CEO David Ossip, working and waiting a week or two, or even a month, to get paid just doesn’t cut it anymore.
“The health crisis has really shown us that within the broader workforce, regardless of whether people are salaried or hourly, the majority don’t have enough savings in the bank to last them for a one-week or two-week period,” Ossip said, while making the case for his company’s new Dayforce Wallet daily payment app.
“It’s very hard to argue that people should be paid in arrears,” he said. “If you move to effectively same-day pay or continuous pay, it is the right thing to do by your employees. And once employees have seen that this is an option, it’s going to be a big part of where they choose to work.”
PayPal’s Plan For Seamless, Touch-Free QR Code Commerce
In the early days of the contactless transaction boom this spring, Jeremy Jonker, the SVP and head of consumer in-store and digital commerce at PayPal, came on to discuss his company’s embrace of QR codes, particularly its pilot in 28 markets worldwide announced in mid-May.
PayPal’s move came amid a global resurgence of QR code usage, as both buyers and sellers looked for ways to conduct in-person transactions in an era of ongoing social distancing requirements.
“[PayPal] accelerated the efforts around QR codes … because our consumers and merchants are demanding and requesting contactless payments, [but] a lot of payment methods today aren’t necessarily contactless,” Jonker said. “You still have to do a signature … you still have to put in PIN codes. What we developed … is purely and truly contactless.”
“We’re really focused right now on leveraging the PayPal consumer franchise [to get consumers] back into the SMBs on Main Street. That’s our No. 1 goal and objective right now,” Jonker said.
Melissa On The Next Frontier For Digital Identity
Long before COVID-19, the world was already going digital, but the pandemic sped up that process tremendously, Barley Laing, the U.K. managing director at Melissa, told PYMNTS.
“Online transactions were building steadily over the last decade or so, but the pandemic [has] increased the urgency for organizations, merchants and intermediaries to ensure that they not only have a quick and easy procedure for customer onboarding or accessing their accounts, but also that they are validly dealing with the person they think they are,” Laing said.
The crisis had raised the IDV bar for brands, merchants, retailers and financial institutions looking to meet their customers on the digital channels that are suddenly so much in demand.
“The reason we’ve seen a marked increase in inquiries for all of our services is that they all enable those online transactions to take place more speedily, more efficiently and with a higher degree of accuracy than ever before,” he said.
InstaMed CEO: From Telemedicine To ePayments, Healthcare Embraces A Digitization Boom
While other organizations struggled with shutdowns and work-from-home mandates, many healthcare providers had their hands full saving lives on the front lines and were unable to take on other projects. But for those that could, such as elective surgery practices, the shutdown proved to be a great opportunity for modernization.
Bill Marvin, CEO at J.P. Morgan-owned InstaMed, said the industry’s embrace of telemedicine technologies has also opened the door for the sector to enhance the online payments experience for patients.
“Healthcare is always going to be a little different because of the extra regulatory responsibilities that parties have,” explained Marvin. “Complexity is higher, and there continues to be a need for more clarity, more information and more digital tools in order to make that whole cycle work better and faster.”
He described the healthcare sector’s struggle to embrace digital payments as like pushing a rope. “When you push a rope, you go nowhere,” he said of the struggle the FinTech space has faced to drive adoption of these tools. “But when you pull a rope, you go somewhere.”
i2C: Regulators Circle The Wagons On Big Tech
It seems like every country from the U.S. to China is cracking down on Big Tech or impeding their ability to expand. i2c President Jim McCarthy said that while the questions regulators are asking are highly relevant to consumers and business owners worldwide, the answers need to be fully explored.
“The digital landscape has shifted things so dramatically, and we’ve always talked about the fact that technology runs way ahead of regulatory constraints,” McCarthy said. “There are a number of things that intersect here: data, privacy, consumer protection. These are not easy issues.”
But as McCarthy noted, the danger is that regulators will pick “knee-jerk solutions” that are unmoored from any actual notion of consumer protection. He said these are increasingly likely to have unintended consequences that do more damage than good for consumers and businesses operating within Big Tech’s various ecosystems.
“We are seeing a number of folks trying to decrease [Big Tech’s] influence through fairly draconian means,” he said. “And yet, consumers continue to vote with their thumbs and fingers — whatever they use to interact with their devices.”
Visa Says Frictionless B2B Payments Are The Future; Rails Must Adapt To New Use Cases
In payments, speed is everything. So, it’s no surprise that Visa’s Alan Koenigsberg, global head of new payment flows at Visa Business Solutions, and Tim Summers, vice president of Visa Direct global segments and market development, said that B2B payments between buyers and suppliers are poised to pick up speed as they travel around the globe. The conversation came against a backdrop where, at a high level, B2B payments account for $120 trillion globally on an annual basis. Faster payment schemes also number more than 50 and counting. But as companies embrace the great digital shift and revamp back-office functions, they’re examining the requirements and challenges of moving money in and out of their coffers.
That, in turn, sparked an examination of the payment rails themselves and begged the questions: Are all rails created equal? Which will thrive and which may merely survive — and is there room for, well, everyone? The duo noted that the companies themselves are less concerned with the plumbing that underpins B2B payments. It seems the only people who may think much about rails are the ones who own and/or operate those rails.
As Koenigsberg stated, “when we think about rails, we think about them as a means to an endpoint.”
As Summers explained, the business is agnostic to just how funds get to where they need to go. The enterprise simply wants to have a seamless solution in place when, for example, they want to convert three days’ worth of sales to cash, or when they want to pay an invoice. “They want a user-friendly solution, but most importantly, they want those funds,” he said.
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