The world of payments and commerce keeps pushing forward — and fast this week. FISPAN Co-Founder Clayton Weir joined Karen Webster for the latest edition of “This Week In Payments” to discuss the latest events, from Amazon rolling out new hardware to America marking National Small Business Week even as many small and medium-sized businesses (SMBs) struggle.
Weir said that looking out over the week’s events, two opposing trends are popping up in the economy right now.
“We see two things happening from our perspective,” he said. “The first is the future has shown up early — there have been about 10 years of progress compressed into the present. So, from an eCommerce, digital operating and digital expectations of the consumer perspective, we’re way into the future overnight. At the same time, there’s so much looming economic uncertainty that has to settle through the economy still. And there will probably be some pain there.”
Amazon’s Big Roll-Outs
Amazon watchers had no shortage of points of interest this week with the company’s big hardware event on Thursday (Sept. 24). The company introduced redesigned Echo devices, the new Luna gaming system, expanded skill set for its voice-assistant Alexa and more.
Weir said all of that was very fascinating to watch, both for all of the progress Alexa has made with consumers and all the progress yet to come as the device works its way into business-related use cases. He said Alexa has some catching up to do making an entrance into the world of working professionals, and it will be interesting to see where those early use cases appear.
“This kind of technology hasn’t really penetrated our workspaces the same way it has our homes,” Weir said. “In terms of consumer penetration, it will be very interesting to see what and when and how Alexa moves into B2B, because those spaces just aren’t enabled the same way. These devices that just aren’t as prevalent in our workspaces yet.”
He said that’s a situation made more complex by the fact that workers aren’t all that prevalent in our workspaces these days due to pandemic-related shifts to remote work. But Weir believes the workers will eventually return, and voice technology will make an entrance in the near future.
For instance, Weir said his company’s chief financial officer recently called his own bank, which authenticated the man’s identity via voice recognition rather than with a PIN.
“When you start to layer that over the top of some of these voice-activated transactions, it’s a pretty compelling experience,” Weir said. “It reverses [the] security spectrum from feeling not very secure to an extremely secure transaction.”
SMB Survival Path
America marked National Small Business Week amid a U.S. economy that few SMB owners are celebrating. But Weir said it’s been remarkable to watch the speed with which many small businesses have leveraged an incredible array of tools as the commerce ecosystem adopted 10 years of digitization in just months.
“Now as a small merchant, I might be transacting on four or five different platforms,” he said. “It might be as an Amazon vendor. I might have my own Shopify business.”
But he said those advances have created a “second-order challenge of managing multiple tool sets and multiple streams of data and transactions.” However, Weir added that within that challenge comes an opportunity for improvements and advancement.
He said it’s FISPAN’s “North Star belief” that the more businesses use these tools, the more they become invisible to the consumer — and the easier it becomes to use such tools and build better end-to-end customer experiences.
“It’s just profound when you see all of the little corners of the world that are rapidly becoming digital,” Weir said. “I think there’ll be more and more deeply verticalized, deeply embedded digital-commerce sets for all kinds of small businesses going forward.”
He added that those use sets will deepen companies’ relationships with their customers, as well as widen the net that they can cast to pull new clients in.
The Bank/FinTech Blending
Among the big headlines this week was the announcement that FIS and The Clearing House are partnering to bring instant payments to small banks and credit unions.
Weir and Webster agreed it’s great that banks and FinTechs are blending, as both groups realize there’s a lot more to gain from working as collaborators instead of competitors.
“The post-pandemic time has actually been great in terms of bank/FinTech collaboration,” Weir said. “The [Paycheck Protection Program] specifically forced the banks to get really far out of their comfort zones and realize they need to get a technology partner to even issue those payments.”
Weir said banks started abandoning their historical mindset of “we can build it here better” — which led to in-house projects that were a waste of time when there was already a good API out there. He said that instead, banks are learning to ask not “Should we build this?” but “Do we want to build this?”
Weir said banks are realizing more and more that “there are things you do want to build and things you don’t.” He said financial firms will ultimately hand off part of the job to FinTechs, but still design what they believe will work best.
“What I think is the next wave is platform-type offering by FinTechs that are going to allow banks to do a little bit of customization at the user-experience level, which is the best-of-both-worlds offering,” Weir said.
The present might not yet be the best of all possible worlds, but Weir said there are tremendous tailwinds of innovation moving the market forward exponentially faster. However, he also conceded that the pandemic’s economic damage has been real, not yet fully felt and is an incredibly powerful headwind that’s holding efforts towards advancement back.
“I’m not sure how those [forces] are going to balance out on the net,” Weir said.
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