This Week in Payments: Money20/20 and Industry Trends
The news in the world of payments this week covered Amazon, Money20/20 and the topics discussed at this global FinTech event in Las Vegas: “everything integrated”, compliance, fraud and access to capital.
First on the agenda was Amazon’s earnings report on Thursday, which indicated the market was going to be a little soft. This led to the market punishing the company, even though everyone expected sales to be weaker.
Read more: Amazon tightens its belt, consumers too
Dean said Amazon is still a great company, but its growth metrics won’t be what people would like them to be. The economy is where it is and the markets are adjusting to it, predicting that the next two quarters will not be as strong as they would have liked.
Noting the strength of Amazon Web Services (AWS) and Amazon’s move into healthcare, Dean said the company is a great, diverse company with a lot going for it.
“I think the market said it’s overvalued for what it is, and they just want to make a correction, that’s all,” Dean said. “I don’t think there’s anything wrong; it’s not going to grow that fast. I don’t think so; I think it’s time to buy Amazon.
See “All integrated”
This week, many industry players also took to Money20/20. One of the talking points was “everything integrated,” Webster said, including integrated payments, integrated finance and integrated instant payments.
Integrating services into an overall flow, like on an app, makes it easier for companies to manage their business, Dean said. As a company offering an application programming interface (API) that opens bank accounts, transfers money and performs other integrated functions, Treasury Prime thinks it’s the future.
“The growth rate is so important,” Dean said. “Deposits and activity going out of banks – large and small banks – and going through these embedded people and to whoever their sponsor banks – the growth is just staggering.”
Fight against compliance and fraud
Fraud was another topic of conversation at Money20/20. FinTechs struggle with fraud, especially in terms of money from checks and digital methods.
“If there was a big topic for me, it was around this thing — more broadly around compliance, which includes fraud and so on,” Dean said.
There is a lot of activity around regulatory agencies and banks discussing how things should be run, he explained.
Fraud happens, Dean said, but if there’s a well-run bank and a good FinTech partnership, it’s manageable.
Regulators and businesses grapple with the challenge of keeping money both liquid and safe. If it’s not done well, things will slow down and impact the customer experience.
Worry about margins and everything else
The uncertain environment, access to capital and the impact on FinTech were also widely discussed during Money20/20. Participants talked about potential acquisitions because sources of capital have become unavailable to companies.
Many FinTechs that had raised huge sums in seed rounds when it was easy to raise money a year or two ago are now finding that they can no longer do so because they are not tailored to the product market, Dean said. Many will pivot dramatically in an attempt to improve or fail.
“I think the message a year ago was, ‘I only care about revenue’, and the message now is, ‘I care about your margins. I care about everything,” Dean said.
In summary, Dean said he was pleasantly surprised by the activity of Money20/20. Having been worried it would be empty due to the economy, he found the event to be packed.
“What I noticed the most was how dynamic everyone was,” Dean said. “You could tell some people were worried about their stuff, but more people than that were like, ‘Yeah, we get it. We are well.’ ”
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