I’m honored to be a contributor to Future of Payments Insights and to share my perspective on all things payments with industry peers. Having been a PR and marketing professional for 15+ years, in both the private and public sectors, I’ve been fortunate to learn about several key subjects that impact the greater payments ecosystem. Below are the topics I will dive into via this blog and what they ultimately mean for the future of the payments industry. My posts will focus on PR/marketing/influencers, embedded finance, big banks, today’s regulatory environment, crypto, and economics.
PR & Marketing
Our industry has grown by leaps and bounds over the past decade due to technology investments, startups, venture investments, and steep competition. This has spurred many companies (especially startups looking to sell or achieve an IPO) to invest heavily in marketing and hire an agency to gain exposure. Companies like Chime have invested millions in marketing dollars and professional sports sponsorships to acquire as many customers as possible, even if the spend doesn’t yield a positive ROI. Today’s economic environment has caused many to shift from this approach to making market spend more ROI-positive. Additionally, many smaller fintech brands have been leveraging influencers to grow their following, tap into new audiences, and grow their overall brand.
The Future: I predict we will see a continued investment in influencers, PR/marketing agencies, and contractors as company layoffs continue. Marketing investments and overall strategy will be much more microtargeted and fiscally prudent along with a heavy emphasis on speed and ROI.
Embedded Finance
Starbucks, Chick fila, Target, etc., have all built successful platforms and loyalty programs while harnessing their customers’ funds to essentially build a massive bank account. However, virtually every industry including healthcare, insurance, real estate, gaming, etc., now have embedded payment apps. Zelle, Venmo, and Paypal have received major adoptions from the big bank’s large customer portfolios and are used by millions of SMB’s for daily transactions. Chime appears to continue to have a stronghold in the digital banking space after a heavy investment in customer acquisition marketing for the past 5 years. While some are better than others, having an embedded solution is table stakes (regardless of the size of the company) in today’s competitive environment.
The Future: I predict that we will continue to see the proliferation of embedded solutions (especially as AI continues to evolve), but it will be a much more feature-rich, seamless experience. There will likely be a strong network of interoperable apps that may grow into a subscription model allowing consumers instant access to a broad range of brands and seamless payment experiences.
Regulations
Elected officials, federal regulators, and consumer advocates are constantly reviewing products and services from big banks, regional banks, credit card companies, prepaid, gift card providers, crypto, etc. The CFPB has been going after many prepaid entities and credit card providers on what they call “junk fees” and the interchange fees that merchants pay. Regulators are also looking closely at bank balance sheets and questioning whether to allow more crypto-focused ETFs on the stock exchange.
The Future: I predict that crypto, credit card and interchange fees, and bank balance sheets will remain at the forefront of the regulatory environment. If Trump enters the Whitehouse, expect a very different and more lax approach from the CFPB.
Economics
There’s an ongoing debate about whether we are in a recession or will have a “soft landing.” Everyone has been watching the treasury’s comments closely and there’s also speculation about whether or not we will see rate cuts this year. On the other end of the spectrum, some say today’s consumer is healthy, the consumer price index (CPI0) is in a good place and there’s no clear indication that we are in or near a recession. However, inflation is still here and doesn’t appear to be going away anytime soon. There’s also an ongoing concern about our national debt, credit card debt, and general consumer loans. Everyone in the greater payments ecosystem is impacted both positively and negatively by both the economy and the health of the end customer.
The Future: We will likely see a push for rate cuts as we enter election season, but it will ultimately come down to what fed leadership thinks is best as we continue to tackle inflation. It’s impossible to predict whether we will go into a recession, but certainly both federal and consumer debt will have a halo-effect going forward. We must keep a close eye on bank deposits, transaction volumes, credit card debt, inflation, and what the fed ultimately does to determine its overall impact on our economy and the greater payments ecosystem.
I hope you enjoyed this high-level synopsis of some of the major topics impacting the greater payments ecosystem. I look forward to diving into each of them and I’m open to feedback, questions, and insights from our site visitors. Please email me at Dawescommunications@gmail.com or connect with me on LinkedIn. I hope to hear from you.
Until next time…
