Money 2020: Innovation, Mobile-Centric Money Take Center Stage (Oct. 8, 2013)
Innovative and mobile-centric financial services are taking center stage this week at Money2020, which has drawn more than 4,500 attendees to Las Vegas. With a strong turnout among startups, it’s not surprising that attendees are predicting banks stand to lose the most from payments innovations, followed by POS providers and merchant acquirers. The results are from a live smartphone poll Kausik Rajgopal, a McKinsey & Co. director, conducted during a keynote presentation yesterday. Retailers, nontraditional financial services and marketing services are in a position to benefit most from payments innovation, the poll’s results suggest. “Payments [now] encompasses banking, retail, telecom and marketing . . . and all these ecosystems are converging in the context of technology and data, making it possible [for new industry entrants] to scale on a level that was not possible before,” Rajgopal said. Though hundreds of new payments businesses have launched and died, there will be many more contenders challenging banks in the next several years, he predicted.
One problem is that banks for decades focused on payments, not what consumers need, Jim Schinella, CEO of the mobile financial management service Manilla, told attendees in a later session. “People need a lot more than what they’re getting from a bank . . . they want a better way to manage their funds with partners they choose,” he said.
The biggest growth opportunity may lie with young adults and underbanked consumers, several speakers indicated. “Younger people are more open-minded, less married to convention and more apt to try something new,” Steve Streit, Green Dot Corp.’s CEO, said in a panel focusing on mobile-centric banking startups. Mobile is ushering in a new era of money management because consumers constantly touch their phones, Streit said. “Once you go get into mobile [banking], it’s very hard to go back,” he observed.
But making the leap to mobile payments can be challenging, according to Ariel Bardin, a vice president at Google who recently moved from its advertising division to head Google Payments after various management shakeups. Google now plans to leverage its advertising and marketing prowess to drive Google Wallet usage. “The shopping experience will be the biggest driver of change [for mobile payments],” Bardin predicted, noting that Google Wallet has garnered 2 million downloads in the first three weeks after its relaunch.
