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This Week In Payments: NuoDB CEO Talks Apple's $2T Valuation, The Great Digital Shift And Lessons Companies Can Learn

The national news cycle was mostly taken up with political talk this week, as the Democrats rolled out history’s first fully digital U.S. political convention on TV’s prime time. But the payments and eCommerce industries saw plenty of news as well, from Apple reaching a $2 trillion valuation to the U.S. Census Bureau reporting that eCommerce sales grew 44 percent year on year. NuoDB President and CEO Bob Walmsley joined Karen Webster to assess all of the week’s developments in our latest edition of This Week in Payments.

Here’s what they discussed:

Apple $2 Trillion Triumph

Apple this week officially went where no firm has gone before, as its market capitalization tipped over the $2 trillion mark. The milestone was not only a stock-market first, but Walmsley said it reflected a major shift in what business Apple is really in.

It’s been easy to think of Apple as sort of an on-ramp to the digital world through its vast array of hardware, Walmsley noted. But while that’s still very much part of the company’s business, he said that Apple’s $2 trillion valuation is also about how much wider the company has set its sights in recent years.

Walmsley said the company is no longer succeeding with just hardware, but also “with the services like Apple Pay and Apple Cash, and the whole way they're doing things – where the whole focus is their relationship with a customer through their entire services ecosystem. When you think of Apple, you think of the brand, you think ‘easy to use,’ you think ‘trustworthy.’ And you want to be part of that bigger world.”

The fact that they’ve reached a record-breaking valuation is impressive, but the more incredible thing is that Apple has built a level of brand loyalty that has turned every product release into a news event, Walmsley said. That’s something that he sees as not just a temporary blip due to the pandemic, but as an indication of the powerful digital shift taking root for consumers and businesses alike.

The Economy’s Continued Digital Transformation

The digital commerce boom stands out as a bright spot in a U.S. retail economy that’s been otherwise hit hard by COVID-19.

While consumers are by and large cutting spending amid economic anxiety, they’re shopping online more than ever. For example, Walmart reported as part of its quarterly earnings release this week that its eCommerce sales grew 97 percent year over year. That’s an impressive figure – until one contemplates that Target saw a 195 percent year-on-year increase in digital sales during the same period.

Walmsley noted that such digital shifts are impressive, particularly in terms of their breadth. Consumers who had heretofore avoided digital transactions are now trying them out of necessity – and learning they actually like them. “I don't think there will be any going back, and I think the eCommerce trend is going to accelerate,” he said.

But Walmsley added that in order for eCommerce to continue accelerating, the industry must solve several infrastructure challenges.

For instance, he noted that the digital world is “always on” – there's no down time. Moreover, all systems must be elastically scalable so that firms are always ready to handle incredible spikes in traffic.

Walmsley added that companies must find a way to build systems where the total cost of ownership is reasonable, which in many cases means migrating to the cloud infrastructure.

And while B2C channels tend to draw most attention when we think about expanding and modernizing digital commerce, the B2B world is increasingly under pressure to upgrade as well.

Walmsley said that becomes clear when “your experience as a consumer on Amazon is so good, and then you as a professional go to a B2B site and see that it is a decade out of date. So I think there's a lot that B2B companies have to learn from the B2C companies about how to create that smooth experience in those first interactions with a prospective customer. Because that's now what drives a customer’s notion of brand, as opposed to physical interactions.”

What We Can Learn from Developing Nations 

Walmsley said the developed world can actually learn a lot from some developing-world digital ecosystems in terms of building out digital infrastructure to meet rising consumer demand.

For instance, he told Webster that some developing countries have ecosystems backed by forward-looking regulators and FinTech entrepreneurs who are looking to hasten the speed of digital financial services.

“There's a lot that we can learn from looking at those economies and the breakthroughs they've made, rather than trying to ‘reinvent the wheel’ back here,” Walmsley said.

After all, a rapidly expanding digital ecosystem doesn’t need redundant efforts, he noted. Instead, every business in every vertical should develop a new core competency to discover and serve their customers’ emerging wants – and even delighting clients whenever possible.

“That will be what drives business decision-making much better going forward,” Walmsley said. “The notion is that you have to take risks. … Moving along slowly won’t allow you to compete in the world that is emerging, because you never know who your next competitors will be.”

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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