We spoke to attendees at Money 20/20 to ask them their views on payment trends, predictions for the coming year and what the ideal payments ecosystem looks like.
Here’s our interaction with Ryan Falvey, Director for Financial Solutions Lab at the Center for Financial Services Innovation in San Francisco, CA.
PYMNTS: WHAT ARE SOME OF THE BIGGEST CHALLENGES AND TRENDS YOU SAW IN 2015?
RF: A lot of the issues we are seeing are around underbanked, but the four major trends we have seen are:
1. The notion of a shift from personal financial services to what we are calling personal financial health applications. I think that difference there is not just about providing people information. Consumers increasingly expect that mobile app to work on your behalf.
2. Another trend that we saw was that a number of companies are investing in prepaid infrastructure — oftentimes not issuing cards, but using prepaid accounts and never actually giving a card to consumer and using that as a way to provide savings applications or help them with payments to bring some new functionality. We actually saw a lot more companies doing that than those using blockchain or the bitcoin infrastructure. The industry is really evolving by letting other companies into the market.
3. We saw nature of credit is evolving. A lot of solutions that we focus on are for providing liquidity. There are age-old models like ROSCA's savings group, which are now being transformed using technology for use among strangers. And then there are products that instead of charging interest are charging subscription fee.
4. A lot of companies are looking to work through employers to get to employees to solve these problems. So the employer channel is really something the tech industry is looking at to get to these end users.
PYMNTS: WHAT BIG TRENDS DO YOU SEE EMERGING IN 2016?
RF: There's a surge of entrepreneurialism and it's going to continue well into 2016. A lot of new ideas are coming out and we are really trying to rethink financial services. A lot of people say that the existing system is not working, but entrepreneurialism is helping rethink the problems and helping attack them.
PYMNTS: HOW WOULD YOU DEFINE AN IDEAL PAYMENTS SYSTEM?
RF: One that works as cheaply as possible. The cheaper the payments can become and the less friction associated with it, the more access people have to these systems and the better solutions people can build.
Ryan Falvey works as the director for Financial Solutions Lab at the Center for Financial Services Innovation in San Francisco, California. He leads the lab, which helps entrepreneurs and innovators build transformative technologies focused on improving financial services using capital, advice and connections.