The news in the payments world this week was all about Amazon, Money20/20 and the topics discussed at that global FinTech event in Las Vegas: “embedded everything,” compliance, fraud and access to capital.
First on the agenda was Amazon’s earnings report on Thursday which said the market was going to be a little soft. This resulted in the market punishing the company, though everyone had expected that sales would be softer.
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Dean said Amazon is still a great company, but its growth metrics are not going to be what people would like them to be. The economy is where it is and the markets are adjusting to that, predicting that the next couple of quarters are not going to be as strong as they would have liked.
Noting the strength of Amazon Web Services (AWS) and Amazon’s move into healthcare, Dean said the company is a great business that’s diversified and has a lot going on.
“I think the market has said it’s overvalued for what it is, and they just want to do a correction, that’s all,” Dean said. “I don’t think there’s anything that’s bad; it’s just not going to grow as fast. I don’t think that; I think now’s the time to buy Amazon.”
Seeing ‘Embedded Everything’
This week also saw many in the industry travel to Money20/20. One of the themes of discussion was “embedded everything,” Webster said, including embedded payments, embedded finance and embedded instant payouts.
Embedding services into an overall flow, as on an app, enables companies to run their business more easily, Dean said. As a company offering an application programming interface (API) that opens bank accounts, moves money and performs other embedded functions, Treasury Prime believes that’s the future.
“The growth rate is so big,” Dean said. “The deposits and activity moving out of banks — big banks and small banks — and moving through these embedded folks and into whoever their sponsor banks happen to be — the growth is just astounding.”
Grappling with Compliance and Fraud
Fraud was another topic of conversation at Money20/20. FinTechs are grappling with fraud, especially in terms of money coming in via checks and digital methods.
“If there was one big topic for me, it was around this thing — more broadly around compliance, which includes fraud and whatnot,” Dean said.
There’s a lot of activity around regulatory agencies and banks having discussions about how things should be run, he explained.
Fraud happens, Dean said, but if there’s a well-run bank and a good FinTech partnership, it’s manageable.
Regulators and companies alike grapple with the challenge of keeping money both liquid and safe. If it’s not done well, things are going to slow down and impact the customer experience.
Caring About Margins and Everything Else
The uncertain environment, access to capital and the impact on FinTech was also much discussed at Money20/20. Attendees spoke of potential acquisitions because sources of capital have become unavailable to companies.
Many FinTechs that had raised enormous amounts in seed rounds when it was easy to raise money a year or two ago are now finding that they can’t do it again because they don’t have product-market fit, Dean said. Many will pivot dramatically in an attempt to improve or will fail.
“I think the message a year ago was, ‘I only care about the top line,’ and the message now is, ‘I care about your margins. I care about everything,’” Dean said.
Summing up, Dean said he was pleasantly surprised by how active Money20/20 was. Having been worried that it would be empty because of the economy, he found that the event was packed.
“The thing I noticed the most was how vibrant everyone was,” Dean said. “You could tell that some people were worried about their business, but more people than that were like, ‘Yeah, we got this. We’re fine.’ ”