Money 20/20, an industry event in Las Vegas covering the future of money – from the emergence of fintechs in the payments industry to cryptocurrencies and blockchain technology – kicked off its four-day agenda on Sunday with a spotlight on Asia.
Will Gaybrick, the chief financial officer, chief product officer and head of payments at Stripe, the world’s most valuable private fintech company, says the company is tackling online commerce in Asia, which stands at the forefront of the industry with respect to e-commerce payments.
“Asia is something we all can learn from a lot, from a payment standpoint. If you look at people bootstrapping the online economy without actually solving acceptance off-line, it’s the wallets that are popping up all over the place.
It’s interesting because this notion of creating a wallet is actually still so exotic. You get your droves of engineers and compliance experts and figure out how you can possibly store money in the cloud for consumers or businesses or otherwise, and we actually think it shouldn’t be that hard. My prediction is that in the years ahead we’ll see a vast proliferation of what we now call wallets, all over the world. These could come from marketplaces, from on-demand companies, just from the apps and services you use every single day.”
Valued at $22.5 billion, Stripe makes software that allows businesses to accept online payments by building comprehensive point-of-sale solutions that support a host of options including credit and debit cards, international payments, Apple Pay and Google Pay.
The 10-year-old tech giant rivals Jack Dorsey’s Square, and like other emerging blockchain-based startups focused on payments, such as Ripple, Stripe is a leader in disrupting traditional banking systems as more and more users opt for mobile payments and instant, low-cost banking solutions.
While Stripe was one of the first big fintechs to support Bitcoin as a payment option as early as 2014, the company ended that support last April due to volatility and long transaction times, calling BTC more suitable as an asset than as a medium of exchange. Despite the decision, the company says it’s monitoring the space closely and is looking for opportunities to help customers “by adding support for cryptocurrencies and new distributed protocols in the future.”
Meanwhile, rival Square has pushed forward with the launch of Square Crypto, the company’s designated division to support open-source Bitcoin projects.
According to a report by McKinsey entitled “The road to mobile payments services,” traditional financial service providers need to act fast to adapt to the tech takeover and the rapidly changing landscape – or risk getting cut out.
“If financial services providers move slowly or resist disruption of their core business, nimble non-bank technology companies are likely to develop work-around solutions in the medium term, exposing banks to full disintermediation.”
China is leading the way. While the underlying payment networks in the US are bank-based, China has moved in a digital direction, spawning a smartphone-driven approach to the movement of money.
According to a report by the Brookings Institute entitled “Is China’s new payment system the future?,”
“China’s new system is built on digital wallets, QR codes, and runs through their own big tech firms: Alipay running through Alibaba (China’s version of Amazon) and WeChat Pay running through Tencent (China’s version of Facebook).
China’s system largely disintermediates banks from payment transactions robbing banks of an important and long-standing source of revenue. It creates an alternative payment ecosystem with different incentives between merchants, consumers, and payment system providers. It challenges the long-standing placement of payments on the side of banking as opposed to commerce. In doing so, this system creates new incentives that could realign existing business models and relationships between merchants, banks, and technology providers.”
— Money20/20 (@money2020) October 27, 2019