This week in PYMNTS, industry insiders discuss everything from composable banking to network tokenization to which tradeoffs lipstick buyers are and are not willing to make.
Carl Pascarella, former CEO of Visa USA for more than a decade and current investor and board member at LoanPro, argued that consolidating credit and debit on a single platform, which provides a more flexible approach to credit underwriting, helps financial institutions and businesses adapt to the evolving needs of consumers in the digital age.
“The future of credit is about putting the consumer first,” Pascarella said. “By leveraging the power of technology and data, we can create a more transparent, accessible and responsible credit ecosystem that benefits everyone.”
Paul Christensen, CEO of B2B payments accelerator Previse, told PYMNTS CEO Karen Webster how, if virtual cards were more widely adopted for accounts payable (AP) transactions, it could solve a major pain point in B2B payments.
“80% of company failures are due to cash flow issues. The uncertainty of waiting and chasing for payment is a real problem, and virtual cards, with the right tools, could solve that,” Christensen said.
Doug Fry, senior product manager at open payments platform provider Spreedly, contended that the “snowball effect” for the adoption of network tokenization is in its early stages, predicting that we will continue to see PAN/merchant tokens operating alongside network tokens, as it should be.
“Merchants want to have flexibility and global reach,” said Fry, “and industry adoption [of different token types] changes across different regions … so it makes sense that they can make some data-driven decisions on improving their overall authorization for their businesses.”
Galileo Head of Product Strategy Michael Haney noted in a PYMNTS TV Tough Questions panel that implementing composable banking does not need to be a big swing for banks.
“Core transformation doesn’t have to be a high-risk proposition,” he said. “Focus on what the technology enables, such as improved customer engagement and product innovation, rather than the technology itself. … It supports agility in a rapidly changing world.”
Arvind Ronta, global head of BNPL and embedded finance at Visa, spoke to the embedded lending opportunity for small- to medium-sized businesses (SMBs).
“There’s a huge gap in how … lenders are servicing small businesses — only 30% to 50%, depending on the markets, of these lenders are offering embedded lending products to small businesses,” Ronta said. “So, there’s a huge material unmet need that also presents an opportunity for lenders to engage and retain consumers specifically in the SMB segments as they focus on embedded lending.”
Trustly Inc. CEO Alex Gonthier said pay by bank has been a natural fit in online betting due to limitations on credit card usage and transaction limits associated with debit cards.
“You have the FanDuel and DraftKings and the BET MGMs of this world,” he said. “And you have a state-by-state legalization process that has been, for us, an extraordinary boost because what happens is that we sit on top of a market that’s growing organically, state by state, without us having to do anything.”
Getting granular with geofencing can enable businesses to get highly specific with how they market to consumers, Radar CEO and Co-founder Nick Patrick told PYMNTS, tailoring their messaging to a shopper’s precise location.
“If you really want to send a personalized, targeted message when somebody is at this store versus that store in a mall, you have to nail the details,” he said. “One area of innovation for us is pushing the limits of what’s possible with location accuracy.”
In additional personalization news, ” Kåre Kjelstrøm, CTO of Lunar, spoke to how advancements in artificial intelligence (AI) are rapidly changing how banks can communicate with consumers.
“AI in itself isn’t anything without a massive amount of data … it is a lot of things coming together, the compute power, the [AI] algorithms and natural language processing, and then this vast amount of big data — that’s really why the ketchup suddenly came out of the bottle,” Kjelstrøm said.
In an interview published Thursday (June 13) discussing Poshmark’s launch of Posh Party LIVE, Vanessa Wong, the company’s vice president of product management, spoke to consumers’ demand to make the digital thrifting experience more social.
“People are continually looking to get closer to the users,” Wong said. “Instead of just browsing a closet, it’s like, ‘How do I really connect with a seller?’ A seller has a persona, has different styling techniques. So, what we see is that Posh Shows allows that deeper connection with a seller.”
As shoppers reduce their nonessential purchasing overall, Alex Irvin, co-founder of eCosmetics, note that consumers refuse to forego their favorite makeup products.
“It’s called the lipstick effect, where people just simply are not going to stop buying lipstick, but what they do, what we’ve seen, is that maybe they’re not going to buy the $30. Maybe they’re going to buy the $15,” Irvin said.
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