This Week In Payments: Netflix and BofA Face Vastly Different Customer Shifts

With earnings reports and new surveys from PYMNTS, this week saw lots of numbers in the news. They showed that there’s room for growth in the global digital transformation, that digital banking is overtaking paper checks, and that consumers are practicing some spend management when it comes to their subscriptions to streaming services.

Airbase Founder and CEO Thejo Kote joined PYMNTS’ Matt Nesto to discuss these numbers and the news in This Week in Payments.

Digital Transformation Has Room for Growth

Starting with a big-picture look at the ConnectedEconomy, this week PYMNTS released a study based on a survey of 15,000 people in 11 countries that found that the digital transformation has reached only 27% of its full potential.

Read more: New 11-Country Study Shows Digital Transformation Has Reached Only 27% of Full Potential

“As the founder of a FinTech company, I will take that as a glass half full, right?” Kote said. “So, there is a lot of opportunity out there.”

The survey shows opportunities that end users and customers aren’t fully adopting and enabling yet, Kote added.

PYMNTS also found that PayPal is the top digital wallet in the big five countries in the European Union.

See more: PayPal Leading Digital Wallet in EU-5, Ahead of Cards in Germany, Study Finds

“PayPal has always done well in the EU countries,” Kote said. “Obviously, the last six to eight months haven’t really been kind to PayPal from a stock price perspective, but they’re still a fantastic business and a market leader in terms of wallets, payments and money movement.”

Digital Banking Keeps Expanding

Digital banking in particular was in the news this week with Bank of America reporting its earnings and saying that 50% of its consumer business is being done digitally. What’s more, it did more Zelle transactions than paper checks.

Read more: BofA Digital Biz Hits 53% as Customers Use Zelle More Than Checks

“That’s not at all surprising to me,” Kote said.

This is a trend that has been ongoing for many years, with improving infrastructure making it easier to issue cards and to plug in to the banking system and move money, and consumers and businesses alike are moving away from checks.

“Clearly the trends are more toward moving toward digital payments and movement of money and less toward paper and moving checks around,” Kote said.

During the week, Wells Fargo launched a new business outreach program to help small businesses find the solutions they need.

See more: Wells Fargo Debuts Small Business Financial-Assistance Portal

Kote noted businesses and consumers are driven toward digital adoption by different things. Consumers are looking for access, convenience and ease of use. Businesses are motivated by an option that embeds itself more deeply into the business process.

“[Businesses] care about efficiency, they care about control, they care about visibility and bringing together everything that happens, hopefully, into a single platform instead of using eight different tools to solve it,” Kote said.

Consumers Pare Down Streaming Services

Streaming services too were in the news, with Netflix announcing it lost 200,000 subscribers during the first quarter.

Read more: Slump in Netflix Subscribers Bucks Connected Economy’s Rise

“As far as the streaming wars are concerned, yes, it is interesting that that fight is happening — that competition is good for us as consumers, I guess, because there is high-quality content like never before and all of us have these long queues of stuff that we want to watch but just don’t have the time,” Kote said.

Asked for his perspective as the founder and CEO of a spend management platform on consumers’ decisions to cancel or renew their subscriptions, Kote said households have a budget for entertainment. And there’s a growing number of services competing for it — so they must make decisions.

See also: Disney+, Netflix Look to Ads as Streaming Market Slows Down

“That’s an individual management exercise that every household will go through,” Kote said. “We’re also getting to levels of adoption in these markets where it starts to become a zero-sum game at some point, so if you can afford to stay subscribed to one, you cannot afford to stay subscribed to the other.”