"Where Tech, Money, and Magic Meet"
Last week I was back in Amsterdam, at Money20/20 Europe. While I’ve been to the US version of the show every single year since its inception in 2012, this was my second European experience, and again, it was a great experience. Despite the alchemy theme, I didn’t come back home with any gold; however, I did come back with ideas, strengthened relationships, and new contacts!
As always, it’s impossible for any one person to capture everything that goes on at Money20/20. Between the keynotes, individual meetings, expo stands, and parallel session tracks, the takeaways are inevitably personal.
Here are some of mine:
- There was a palpable sense of concern about the looming deadline of SCA (Strong Customer Authentication) regulation due to come into force in September. The requirements apply to cards as well as bank account payments, yet many issuers and merchants are not ready. There is a serious risk that many e-commerce transactions will fail after the deadline, either because the issuers will be forced to decline them, or the customers will find the experience so clunky that they will abandon the purchase. As Patrick Collison, CEO and co-founder of Stripe, said on the Main Stage, for merchants that find themselves unprepared it will feel like a “punch in the stomach.” All major acquirers I spoke to, including First Data, Stripe, and Worldpay, have solutions to support their merchants, but time is running out, even though some hope and expect that the regulators will postpone the deadline.
- Although who cares about cards, they are going to be dead soon, replaced by account-to-account payments, right? Wrong! There was an entire session dedicated to this debate, and the audience poll at the start showed that only 8% did not believe that “real-time payment (with the help of PSD2) will contribute a bigger market share compared to card schemes”. Majority (over 70%) said that it would happen in either three or five years, with a fairly even split between these two choices. However, by the end of the session, having listened to the “pro-cards camp” experts such as Jason Gardner, the CEO of Marqeta, a modern card issuing platform, audience opinions shifted to “50-50”. There is still a lot of work to be done for A2A payments to become widely adopted, and cards (as well as their digital form factors) are here to stay.
- Also, there is still a lot of work to be done in delivering open banking more broadly. While most agree on the vision, there is a growing sense of frustration that open banking hasn’t yet delivered on the promise – for the average consumer, little has changed yet. Some speakers went as far as to pronounce open banking “a complete fiasco”. Yet, there were several announcements made during the show, including PayPal’s investment into Tink, and Mastercard’s unveiling of the open banking platform, indicating that many players continue to view open banking as an opportunity.
- Overall, as always, there was a lot of talk about innovation, although some speakers urged the industry to “stop innovating and start executing”, recognising that the latter is much more difficult and requires more fundamental changes. As Anne Boden, CEO of Starling Bank, said describing the advantage of “challenger” banks, “the incumbents can copy the features, but they can’t replicate the cost base”. Also, it was interesting to hear from John Chaplin about the latest results of the Payments Innovation Jury survey. When asked why companies struggle to change, only 8% believed that they don’t understand the threats. About 35% said they understand the threats but don’t know how to respond. An even higher percentage (38%) said they even know what they need to do but find it difficult because of the negative impact short term.
- Finally, it was fantastic to hear from so many inspirational leaders who shared their stories on the main stage, from the Ambassador Susan Rice to Olga Zoutendijk, a Board Member of Julius Baer Group, who was interviewed on stage by Conny Dorrestijn, the founding partner at BankiFi. Recognising that change can be risky and daunting, Ms Zoutendijk quoted Nelson Mandela, who said: “I never lose – either I win, or I learn.” Wise words, indeed!
Thank you to all who generously shared their time and insights in our meetings. And thank you to the Money20/20 team for continuing to inspire all of us and for our ongoing partnership. I am looking forward to Las Vegas in October!