Commercial

Key Themes

The upward trend of non-card payments will continue to increase in 2020 and has been accelerated by Coronavirus. Smartphone payments like those pioneered by Chinese conglomerate Ant Financial are making their way westward. While the payment system in China revolves around QR codes, other methods are also gaining popularity. PSPs, banks, and other Point of Sale (POS) terminal providers are listening. They will continue to adapt their tech to accept these forms of non-card payments in 2020.

Consolidation will be another significant trend in payments in 2020/21. Well-established industry players will leverage their dominant position and cheap credit to buy competitors and other adjacent companies. This M&A activity will allow them to quickly expand into new markets and niches, growing their ecosystem and offering end-to-end payment solutions. We’re already seeing this trend coming into play: in January payments giant Visa bought FinTech API developer Plaid for 5.3 billion dollars. With half of the year left we expect to see more blockbuster acquisitions. That said, this consolidation could be a double-edged sword. On the one hand, it will further increase payment efficiencies as companies have more control over each step in the process. With this control, these firms can grow their business globally. On the other, too much consolidation could create cartel-like operating conditions, similar to what the banking industry looked like before tech transformed payments. It’s worth keeping an eye on how governments will respond to proposed M&As in the payments space.

Traditional financial companies aren’t the only ones jumping into the payments industry. Tech giants Google, Apple, Facebook, and Amazon all recently signalled their intentions to be more active in this space. In both the Android and iOS ecosystems, users can plug their cards into Google Pay or Apple Pay. From there, they may use their phone and account to initiate payments both physically and online. In the United States, Apple partnered with Goldman Sachs to launch a physical bank card, further pushing themselves into banking. Amazon has partnered with Goldman Sachs to provide credit lines up to £1 million for small business. Meanwhile, Google continues its push to connect user bank accounts and cards across the globe.

Key Commercial Moves: Q2 2020

  • Derrick Carpenter joins Fiserv as SVP General Manager from Bank of America as EVP of Integrated Payments, Digital Commerce & CMO for Bank of America Merchant Services. He joined the firm in 2011, held progressive roles & created value while leading Group Product & Industry Solutions & Platforms. During his tenure, he launched new products & expanded non-core/legacy product revenue.
  • George Maddaloni joins Mastercard as CTO, Operations under Group Ops & Tech head, Ed McLaughlin. George joins from AIG as Global CTO and before that was at UBS where he ran US Operations and Global Networks.
  • Chris Newkirk has joined Visa as Chief Strategy officer under CEO, Al Kelly. Chris previously spent 12 years with Capital One in a variety of roles running international, partnerships and new business.
  • Rachna Ahlawat has joined Fiserv to lead all global digital product efforts, she joins from Ondot Sytems where she co-founded the business and led all product, marketing and strategy.

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