A couple of years ago, an over-reaching trade journalist dubbed Money 20/20 “the Woodstock of Payments.”
This set my mind racing to devise an alternate catchphrase: The Coachella of Cards? The Fantasia of FinTech? The Burning Man of Blockchain?
Clever taglines notwithstanding, good things happen whenever you bring 11,000 of the leading practitioners of a field together, whether on stage or in hallway conversations.
Now five years old, the annual Money 20/20 conference has become a natural venue for major product announcements and provocative panel discussions with the payment industry’s leading lights.
Part of the event’s secret sauce derives from maintaining a healthy mix of venture capitalists, fintech companies, and corporate players among the usual financial institution/vendor crowd, which provides a welcome divergence of perspectives.
I was disappointed to find credit unions underrepresented given the strategic importance of payments to both member relationships and the credit union financial statement.
Fortunately, most of the movement’s service providers were there to fly the flag and gather info on the latest developments.
In that spirit of sharing, here are my Lucky Seven key themes I took away from three days in Las Vegas:
1. Blockchain: Still bullish, but with newfound realism
Blockchain was a main topic on the Money 20/20 agenda, and there was no loss of enthusiasm for the technology.
However, experts were clearly dialing back expectations of near-term impact.
Vanessa Colella of Citi Ventures offered, “The experimentation is real, but a one- to two-year horizon is an unrealistic test for large financial institutions.”
2. The identity crisis
While on the topic of blockchain, it was fascinating to see how quickly the notion of cryptocurrency has receded into the background.
Panelists predicted a 2017 investment focus on leveraging the distributed ledger to solve problems like identity management and supply chain/trade finance.
As one venture capitalist stated, “B2B use cases aren’t headline-grabbing, but they’re the real guts of the industry.”
They’re also where the money is. One of the high-profile product announcements was Visa’s B2B Connect, a cross-border payment tool powered by the fintech chain.
Identity also plays into one of the hot new buzzwords: RegTech. “How can we think differently about KYC?” (Know Your Customer) was one expert’s open-ended challenge.
3. Zelle’s P2P play
Early Warning Systems formally unveiled its revamped person-to-person (P2P) offering. Although its leaders push back on the notion of Zelle as “just” the bank-led answer to Venmo, that’s the inevitable yardstick by which their new product will be judged.
Zelle is touting stronger security thanks to Early Warning’s input, as well as “real time” capability. That’s a bit of an overstatement, although the model is swifter.
Zelle is aiming for ubiquity (a weakness that plagued its clearXchange predecessor) and its list of initial participants include First Tech Credit Union in Beaverton, Ore.; BECU in Tukwila, Wash.; and CO-OP Financial Services; so outreach is part of the plan.
We’ll need to wait until Q1 2017 to see the new solution in action, though.
4. The return of the retailer wallet
After retailer consortium MCX’s vision of a merchant-led mobile wallet fizzled, attention shifted to handset-driven solutions like Apple Pay and Samsung Pay.
Not so fast.
Walmart and Kohl’s took center stage with merchant-specific wallets incorporating the couponing and convenience features beyond the payment that many see as keys to mass adoption.
The question remains how many standalone apps a typical consumer will be willing to load, but the merchants are meaningful players again.
5. A kinder, gentler Walmart
Walmart has never been shy about venting its frustrations over the payments process—mainly the cost of interchange—and saw the retailer as the driving force behind MCX.
This year, however, it was product managers on stage rather than finance guys, talking Walmart Pay’s functionality rather than airing grievances.
Plenty of battles continue behind the scenes (including lawsuits and a Canadian standoff), but the new public approach feels decidedly more constructive.
6. A conciliatory tone toward regulators
Similarly, “stop stifling our innovation” rallying cries took an interesting turn.
Perhaps they simply realized it’s not worth fighting the inevitable, but banks and fintech companies alike signaled willingness to involve regulators early in their development processes and identify workable models upfront rather than face surprise roadblocks later.
At Citi’s Carey O’Connor Kolaja put it, “I think it’s our responsibility to bring the regulators along.”
7. Speaking volumes by staying silent
I doubt anyone was surprised by Wells Fargo’s absence from this year’s podium. However, a keynote from Samsung was quietly cancelled at the last minute, just as the firm unfortunately brings new meaning to the phrase “burning platform.”
But I figured we were due for big news from Chase Pay, whose pre-announcement last October was one of the show’s highlights—but who has proceeded to miss its promised mid-2016 launch dates.
Chase Pay remains a potentially formidable market entrant, but given the lack of updates, the timing of that entry—not to mention the completeness of its feature set—has become a question mark.