Thousands of payments professionals descended on The Venetian, Las Vegas, Sunday for what has rapidly become the hottest event in payments – the annual Money20/20 conference. There was a buzz in the air as executives from across the payments ecosystem mingled in anticipation of a stacked agenda. However, the tension between the established financial services industry and the world of FinTech was an apparent and recurring theme on day one as both the disruptors and the disrupted came together to debate the future of the payments.
One thing was clear though, and that is the abundance of opportunity – as Vinod Khosla, of Khosla Ventures, said during his keynote interview, “there is hardly any area of financial services that can’t be innovated or disrupted.” Everyone wants a piece of the pie which explains why this event has become so popular. Here are just some of the opportunities addressed on day one:
1. Financial inclusion:
A Gates Foundation Roundtable on “Providing Financial Security for the Underserved” set the stage with the shocking stat that there are nearly two billion people in the world without access to basic financial services, according to the latest Findex survey. Payments solutions can be the gateway to eradicating poverty and establishing and documenting identities is key. Kamal Quadir, CEO of bKash, studied Kenya’s m-Pesa but didn’t duplicate the solution in Bangladesh. Each market is different and requires a unique solution that is appropriate for the local community.
Money20/20 companies to watch: BitPesa, bKash, InVenture
2. Alternative credit scores:
Billions of consumers could gain access to credit for the first time if we use Big Data to score consumers, instead of credit scores, according to Arjuna Costa from Omidyar Network. In India only one in seven received a formal loan in 2014 – equivalent to excluding consumers with a FICO score below 800 – demonstrating just how much of an opportunity there is for Big data to provide small credit. The rapid growth of smartphones in emerging markets will facilitate this opportunity.
Money20/20 companies to watch: Lenddo, Cignifi
3. Financial health:
Jennifer Tescher at the Center for Financial Services Innovation made the case that merely having access to financial services is not enough given that 138 million Americans are struggling to pay their bills and make timely payments on their debt. Furthermore, while income is a key factor there are many households with above average incomes that are also struggling. Financial companies should think of themselves as being in the financial health business.
Money20/20 companies to watch: Keybank, USAA
The blockchain was a recurring theme addressed in both track and keynote sessions. In a keynote interview with Vinod Khosla, of Khosla Ventures, he shared his excitement about the blockchain given its potential to radically change transaction costs across businesses particularly in the area of financial settlements. Others expressed caution about the unregulated nature of the blockchain and bitcoin given its vulnerability to fraud.
Money 20/20 Companies to watch: Xapo, Wave Crest
Both Patrick Collison, CEO and Founder of Stripe, and Osama Bedier, CEO of Poynt, made the point that when it comes to ecommerce we are just at the beginning of a transformative journey. Only 2-3% of global spending is conducted via the internet and as that grows – potentially to 30% or more of total spend – new and unknown opportunities will emerge. Social media buy buttons haven’t taken off because of the user experience but once that is fixed we will see growth.
Money 20/20 Companies to watch: Stripe, Poynt
Andrew Davidson is SVP Comperemedia at Mintel. He is a multi-channel marketing and payments expert with over 20 years of marketing research experience. Andrew is regularly called upon to provide analysis for leading media publications worldwide and is also a key speaker at Card Forum and other high profile international industry events.