The connected economy saw big news on several fronts this week, with buzz around Elon Musk’s Twitter takeover bid, Meta disclosing its plans for commerce in the metaverse, Goldman Sachs getting ready to launch checking accounts, and Amazon surpassing Walmart in retail spend.
Bessemer Venture Partners Partner Charles Birnbaum joined PYMNTS’ Karen Webster to discuss the news in This Week in Payments.
First on the agenda was Elon Musk’s move to buy Twitter.
Read more: A Twitter Takeover by Elon Musk Holds Power to Shake Up Social Media — or Sink It
“It’s obviously a platform with tremendous influence, particularly in the technology community, so you have no choice as a venture investor to pay attention to what’s happening on Twitter,” Birnbaum said. “It’s a platform that people use for many different reasons, and regardless of who owns it, I don’t think it’s going to change the nature of how people use it for quite some time.”
Commerce Develops in the Metaverse
Also in the news was Meta’s disclosure of its plans to take nearly 50% out of the sales of creators who want to set up shop in Meta’s metaverse.
See more: Meta Opens Its Metaverse Platform to Payments, and It Doesn’t Come Cheap
Birnbaum said Meta sees a huge opportunity to shape payments in the emerging metaverse and become a dominant player in the space — no surprise from a company that telegraphed its intentions to be the go-to brand for all things meta-related when it changed its name from Facebook.
He said he also expects there to be a continuing push-pull between the FinTechs that have had such success over the last decade and those that are building pure-play payments infrastructure, specifically new metaverse platforms.
And while some detractors are quick to point out that the metaverse is still just being used for gaming and virtual events, Birnbaum said those entertainment segments still account for a big part of the gross domestic product (GDP).
Read more: AI-Driven Dogs for the Metaverse, Secured as NFTs to Be Offered by Digital Pets Company
“Even just the development of eSports over the last decade has been pretty instructive for many investors in the market,” Birnbaum said. “You really just have to track user behavior, track where the developer talent is flowing and then see what happens.”
Everyone’s Becoming a FinTech
Also in the news this week were some earnings reports in the banking sector. Among them was Goldman, which announced impressive credit card loan volume and said it will launch checking accounts later this year.
See more: Goldman Puts Legacy Lenders on Watch With Plan to Offer Digital Checking Accounts
Birnbaum said FinTech offerings are becoming table stakes for nearly every company looking to evolve its payments strategy, pointing to Amazon’s long history of providing financial services to its merchants, finance offerings from platforms like Shopify and online marketplaces, and the Apple Card.
Read more: Ex-Treasury Official Michael Barr is Frontrunner to Police Banks at Fed
“I don’t know if consumers actually know what they want until you really give them something really tangible that they can grab onto,” Birnbaum said. “We’ve been reflecting on the last decade of consumer FinTech, and mostly there’s been some really specific hook that has created a brand.”
See more: Bank Deposits to See 80-Year Decline as Consumers Move Cash Stockpiles
He cited the examples of Betterment making investing accessible for a lot of people who didn’t have access to advisers, SoFi having the hook on the refinance trade on student loans, Robinhood offering free securities trades, and Chime luring consumers to set up accounts by giving them access to their paychecks earlier.
Amazon Takes the Lead Over Walmart
During the week, PYMNTS released data that shows that Amazon has taken the lead over Walmart in terms of retail spend for the first time. While Walmart is still very strong in grocery, it has fallen behind Amazon in many other retail categories that represent opportunity for growth and spend.
Read more: Why Amazon Is Winning the Retail Battle Over Walmart
“People are focused on their needs,” Birnbaum said. “I know as a family we’re really busy, we need a lot of stuff for the kids and don’t have time to go anywhere, and Amazon has a lot of hooks in with [consumers] just with the ease of how we buy things.”
See more: 5 Things You Need to Know About the Amazon-Walmart Duel
Walmart has been expanding its own FinTech foothold to make inroads with households who buy groceries at their local Supercenters.
“I think that’s in some ways even more interesting than what Apple’s done because while Apple products are beloved and so widely owned, we’re talking about essentials,” Birnbaum said. “Whenever you can be financial services around things that people have to have, not want to have, it’s a different ballgame.”
Developments in Mortgages, Installment Loans
There’s also been change in the mortgage market with businesses disrupting that value chain and the news that the average 30-year rate was up to 5%.
“I’m really interested in what that’s going to do,” Birnbaum said. “There’s been a lot of really interesting PropTech companies that have come up over the last 10 years that I think are going to be well positioned.”
Looking ahead to the news that will be coming from FinTechs that have gone public, Birnbaum said he will be watching to see how factors like the current economic climate and geopolitical factors like the Russia-Ukraine war will affect consumer sentiment.
“I think some of those companies are not necessarily the perfect bellwethers for consumer behavior, but really interesting, and to see what default rates really look like,” Birnbaum said. “Whether it’s the installment loan players — everyone calls it BNPL, I call it installment loans — or some of the personal loan providers, I think that data is going to be really compelling to look at.”
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