Say what you want about the world of payments and trading, it is never dull as each week brings a new set of problems to the table. And last week was no exception as the big challenger bank disruption began to shift the focus away from personal banking in favor of business banking, the CFPB finally took note of the buy now, pay offers. later (BNPL) and Square / Twitter CEO Jack Dorsey anointed bitcoin as the currency of the internet.
It’s a world, CEO of Ingo Money Drew edwards said Karen Webster, where things that seemed distant and unlikely a year ago are quickly becoming reality, and are forcing established players and newcomers to start paying attention.
Square becomes a challenger bank for businesses
The rise of digital banking, for example, has been a closely watched trend over the past 18 months, but that scrutiny intensified this week when Square announced the launch of its commercially-oriented challenger bank, which quickly attracted the world’s attention.
If there’s ever been a company to do it, Edwards told Webster, it’s Square, because it already has a strong grip on the small business market. There will still be challenges to overcome, Edwards noted, suggesting that while business banking is unlikely to see the level of fraud issues encountered in the consumer realm, the onboarding and authentication process will likely need to become a little more robust.
But overall, Edwards called this week’s decision a “nice addition to the Square ecosystem.”
“The question, for me, remains how can any of these neo-merchant banks know their small businesses enough to really provide them with the credit and working capital they need. But again, Square is already doing this and there is an opening there for truly exceptional customer experiences and modern small business banking. And it’s going to be exciting to see where Square is going with that, ”Edwards said.
BNPL’s uncertain way forward
Also of note this week, the CFPB finally took notice of the buy now, pay later segment, via a blog post discussing the fast-growing form of finance with consumers and warning them of the potential risks.
It’s a development that Edwards called somewhat amusing, given that BNPL is a classic case of ‘what’s old is new again’ that heats up the market and turns regulators’ heads, despite the fact that ‘this is essentially a new take on the old-fashioned layaway. and installment plans that have been around for generations.
Despite this, he said it was still a much more competitive space than there was before, as issuers, startups and established companies are now entering and vying for a position in this segment. emerging.
For Edwards, his money stays with Apple, which recently announced plans to jump into the fray on its own, although the final details are still emerging as to whether its Apple Pay Later offering will fit into its. existing digital wallet offering.
“Apple never claimed to invent anything. They just make everything better, ”Edwards said of the company’s entry into the field and its potential. And there is potential here to be tapped, he said, as Apple isn’t the only big name in the game making payouts. But based on his previous experience, he said, it turned out to be less than customer friendly.
“You have your balance, then you have your interest savings balance, then you have your minimum payment and I have to study to find out what I really owe. You can no longer say, “This is what I owe and this is the minimum payment,” it’s a whole other thing now. “
The Crypto Roller Coaster
While Jack Dorsey singled out bitcoin as the next internet currency this week, Edwards has been a bit of a headache. Edwards owns cryptocurrency (most out of curiosity) and has friends and colleagues who have made millions, if not tens of millions. But he would not advise anyone to put their savings there as a monetary unit, he said, because it is not. It’s more like a gambling token or a lottery ticket – one can get lucky while playing the game, and there are better and worse gambling strategies, but in the end, investing in bitcoin doesn’t isn’t the world of seriousness, from his point of view, although he readily admitted that people like Jack Dorsey and Elon Musk are better than him at predicting the future.
But there are areas outside of the bitcoin roller coaster that look much more promising, he said, such as stablecoins for consumers in markets where the currency’s value is volatile, attaching more complex messages. and more complete to financial transactions, thus reducing slowness and expense. cross-border money transfer.
“I think Elon Musk and Jack Dorsey and all that crowd, they’re definitely seeing something and I looked at the numbers, there’s a ton of money out there,” he said. “So I don’t see it go away, I just don’t know what becomes of it. “