Webinar Review: The Future of Payments and Emerging Global Trends
Where is fintech headed and how can partnerships drive deeper innovation? This recent webinar, with experts from Discover® Global network and 451 Researchoutlined the key business priorities facing fintechs today and provided unique perspectives on the digital payments space.
In its second annual Fintech State of the Union study, discover® The Global Network identifies new trends shaping the fintech ecosystem, including connected commerce, open banking, embedded finance and real-time payments.
In a recent webinar, Jordan McKeedirector of payments research and consulting at 451 Research, part of S&P Global Market Intelligence, explored the study’s key findings by spotlighting digital payment use and adoption worldwide. One of the most comprehensive of its kind, the survey included responses from more than 4,000 consumers and 850 fintech providers, located in North America, Europe and Asia.
“The goal of this study was to better understand how consumers leverage different types of digital payment products and fintech services, their preferences in terms of providers from which they want to use these capabilities, and their interest in different types of new use cases, such as connected commerce and open knock,” McKee said.
“The goal was also to get an insight into the challenges facing fintech providers, for example: Where do they need support in their organizations? How do they think about collaborating with established operators in the payment ecosystem. And what is their interest in pursuing different types of new use?”
Three clear takeaways from the study emerged, according to McKee.
- Consumers are gravitating towards digital payments to streamline their digital journeys. As more of their interactions become digital, they are looking for trusted experiences and experiences that remove friction and create different types of value.
- Fintechs want partners to help them deliver and consume different types of embedded financial experiences. Fintech is becoming integrated into all companies, and fintech providers need partners to drive this opportunity forward.
- At the heart of success for all parties is collaboration, security and user experience.
Consumers want options
Consumers have gravitated to a wide variety of payment methods, with more than half of consumers globally using digital wallets in the past 90 days.
29 percent use buy now pay later, while 40 percent use a P2P payment service. Two-thirds of consumers (66 percent) are interested in automatically paying for purchases by exiting the store without interacting with a point of sale, and 58 percent are interested in having connected devices automatically make purchases on their behalf.
Fintechs want to collaborate
A consistent message throughout the webinar was fintech’s “appetite for partners”, considered more important than ever given the current macroeconomic environment.
“Ninety-eight percent of fintechs identified areas where they believe their business could benefit from support from a partner,” McKee revealed. “It’s not really an ‘us versus them’ mentality that we so often see painted around this room. It’s a recognition of the value of partners.”
The research also showed that fintechs value the way partnerships provide access to customers, access to capital and access to marketing support.
“The focus these days is on customer experience and the customer journey, and how a financial product supports this”, said Tribh Grewal, director, business development at Discover financial services. “Not everyone can do everything themselves, and this is where partnerships become very important.
“Learning has to be both ways, we learn from fintechs and the trends shown here. This is where networks can help fintechs not only with access to the wider network, operating rules, regulatory compliance, but also investment for growth, incentivization and launch support.”
There is also a clear emphasis on technology-centric partnerships, including the development of core infrastructure, or the provision of core technologies that it does not make sense to build in-house.
Advantages of cooperation
The main adoption drivers for digital payment services are “very much aligned with Maslow’s hierarchy of needs”, McKee said, referring to the need for security, ease of use, speed, convenience and acceptance.
“What we’ve seen in the research here is that it really lays this foundation for our industry to go deeper into adding even more value, and as consumers get comfortable using basic digital payment features like a wallet or a peer-to-peer to peer payment app, they will be more ready to adopt a variety of new use cases,” McKee said.
Overall findings: fintechs and networks ahead
Central to the discussion was the fact that fintechs are looking for partners who have a commitment to partnership. At the same time, participants agree that payment networks, such as Discover, want to work with fintechs that truly want a “win-win” relationship, where there are commercial opportunities that benefit both organizations.
“We are a global card network”, observed Joanna Hanner, director of corporate strategy at Discover Financial Services, “but we’re evolving as a digital bank and offering more digital banking solutions to customers, and that unique business model makes us a really exciting company for fintechs to partner with.”
“Yes, given the evolution of the market, no one party these days has all the answers,” he observed Greg Rainsdirector of new products and solutions at Discover Financial Services.
“From a network side, we obviously play a central role,” Rains said. “We’re a connector, a facilitator and we also have a lot of data flowing through the network. But from a fintech perspective, that’s the specialization. Fintechs are focused on solving a particular pain point for consumers and can have a really deep understanding of that the pain point.”
He continued, “If you put these things together – the deep understanding of the consumer problem with the macro view and the data products and services as a network, which Discover Global Network has – then users will benefit.”
Enjoy more from the webinar by watching a full replay
– The Future of Payments: A View into Emerging Global webinar.
