It’s been an exciting week in payments, but then the payments and commerce world is always something of a never-a-dull-moment environment. But even by local standards the week was one to watch as bitcoin suffered a mini-bust on the news that Tesla will no longer be taking crypto payments, Google pushed out with its big international P2P play in partnership with Webster Union and Wise, and buy now, pay later (BNPL) expanded its reach even further, not into retailers this time but into the world of issuers looking to reform their credit products in the image of BNPL.
A wild week to watch, NCR President of Digital Doug Brown told Karen Webster, and one with something of a showcase of unexpected outcomes that highlighted the most exciting side of innovation — one never really knows where it is going to end up.
“You invent things, thinking you understand exactly what the value is going to be as seen by a consumer. And then it always surprises you as to what is really the value and where they see more or less than you did,” Brown said of the always “more to come” environment payments and commerce has proven to be of late.
That has been NCR’s direct experience of late, as of its new partnership with Google which Brown noted presents a unique opportunity to tap into “Google’s cloud capabilities to build a more robust and agile infrastructure to help support new innovation.”
And beyond NCR’s direct experience, he noted, it’s been the experience of the market, particularly this week as there’s been an awful lot of movement both on the margin and out front and center.
For example …
Following The Bouncing Bitcoin
It’s been an exciting few months to watch the price of cryptocurrency, bitcoin in particular, which had been on something of a growth spurt since the start of 2021 with a price at or just under $60,000 for the last two weeks or so, with a big bounce anticipated after Tesla CEO and cryptocurrency enthusiast Elon Musk appeared on “Saturday Night Live” a week ago.
The bounce didn’t happen and in fact Musk kicked off something of a bitcoin bust with his announcement that Tesla will no longer be taking bitcoin payments, as the mining process to create bitcoin is too environmentally costly. Bitcoin’s price as of this writing is at around $49,000 and the sudden deflation has a lot of people taking a somewhat more suspicious look at crypto this week and how very fickle the market can be.
But Brown for his part said the day-to-day fireworks of the crypto market do little to turn his head or distract him from the bigger potential of the product. A product, he said, that is becoming a bit more mainstream by the day.
“I think I can safely say that crypto is very disruptive across the ecosystem and all factors, which you just asked about. I think if you look at it just as a store value or an investment type of approach, that’s becoming much more mainstream,” Brown said. “I think that’s going to afford an opportunity where we’re going to see the nexus of crypto and banking in a more profound way.”
Crypto, he notes, hasn’t gone mainstream yet — but it’s knocking at the door a little more loudly each day as breakthroughs start to happen and more ways are found to practically tie it into the mainstream financial system. It’s still an early innings game, he said, and one that is only going to get more inventive from here.
And speaking of incentive payments …
Google’s P2P Play And The Rapid Forward Evolution Of The MPay Landscape
Google made a big move to expand its P2P ambitions this week, announcing a new partnership with Western Union and Wise that will make it possible for Google Pay users to push funds through the app to friends and family in Singapore and India (with more eyes set to follow). A big leap forward, Brown noted, and one indicative of a rapidly developing trend in mobile payments across the board — the move to finding problems to help large swaths of people and pushing forward a solution sorely lacking.
“Solving a pain point problem. I think that’s where we’re seeing some breakthrough capability. The P2P cross-border model is one of them we are seeing this week. But I think once those breakthroughs start to happen, we have to figure out how to push the more mainstream adoption and to create practicality for a broader segment,” Brown said.
Moreover, he told Webster, the innovation and advances will be coming from across the segment, in mobile payments via their many competing form factors — NCR, QR in-app, etc. And it will be all about innovation and changes, he said, that aren’t half-measure or incremental upgrades, but offers that are in fact fundamental changes to the consumer experience that make it faster, smoother, simpler and easier.
The details, he pointed out, don’t matter to consumers — they aren’t thinking about the ins and outs of the systems like payments peeps. They just want to know it will get there, when it will happen and what it will cost them to engage with it, so they can make their choice accordingly.
The Great BNPL Bounce
Everyone, it seems, loves buy now, pay later (BNPL) offers, even card issuers who instead of competing with them are figuring out ways to join them and build their own variations on the installment theme to capture the ever-growing cohort of consumers proving that this could easily become their preferred way to pay.
The growth in the segment, Brown told Webster, speaks to that need among consumers to find better ways to smooth out their cash flow needs than they are finding with traditional revolving credit offers. The banks and credit unions to move into BNPL now, he noted, goes hand-in-hand with the expansion into things like their growing interest in financial wellness, planning, advising and coaching.
“I do think this is something that is top of mind that the banks and merchants are no longer willing to relinquish to the likes of Affirm and others who are not traditional bank,” he said. “And I do think we will see more to that end and especially where you have an ecosystem that surrounds a community bank or a credit union.”
Those banks, he noted, often already have the merchant relationship, meaning this expansion can come as a natural extension of their business in creating a different on-ramp for credit for those consumers who don’t have the traditional credit underwriting metrics who are excluded from the system, to the system’s detriment.
“There’s a lot of good credit individuals that just aren’t being seen by the system,” he said. “Is that because the individuals aren’t credit worthy? No it’s because the system isn’t seeing them.”
BNPL, he said, is another step forward in fixing that process and finding ways to fit more people in.
A step forward, and a big one, rounding out this week in payments.
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