COVER STORY THE FINTECH TIMES
OVERHYPED PAYTECH, UNDERHYPED PAYTECH I
t’s universally agreed that the coronavirus pandemic delivered new opportunities for innovation and evolution in the payment technology space. But which of the proclaimed ‘industry’s hottest trends’ are worth learning more about? The Fintech Times has turned to some of our community’s leading players to see what they see as the industry’s most overhyped trends and services, as well as those promising innovations or topics we don’t talk about enough.
“The most ridiculous payment innovation is Bitcoin as a transaction method. I still don’t get it. If you’ve ever bought something using Bitcoin, you’ll understand why it is still (after how many years?) used primarily on the dark web or as a highly speculative investment asset. We can do secure, real-time payments, globally, in any currency. I think Bitcoin aims to fix a problem that does not exist. Granted the investment side is a different matter – but I’m not sure I really trust that bit either. I thought that Bitcoin was destined for the trash can... how wrong was I?”
Phillip McGriskin, CEO at Vitesse, the London-based fintech that offers real-time cross-border payments for businesses
“Despite being first introduced in the 1950s, we still see new debit/credit cards being launched. They all have their unique selling points. Maybe they’ve switched the cold black titanium for a biodegradable natural material or provide bespoke travel insurance for the generation which values experiences over mortgages. Forget what they look like on the outside, on the inside they’re the same Mastercard and Visa products your grandparents used. Like a new expensive gin, another luxury clothing label and other premium consumer goods, marketing and packaging will be key to their success, not technology.”
D E P Y H R E V O
Ralph Rogge, CEO and founder of Crezco, the open banking account-to-account solution for B2B payments
“Hype in startups and especially fintech is nothing new. For some, it has been deserved and in many ways, it helped create the buzz we have in London for the industry. As the founder of a fintech startup myself, that hype has been helpful. Of course, we have seen many over-hyped startups in fintech and our subsection of payments is no exception. Many fail to bring real innovation to their customers, they succeed in driving hype to the investors with the end-game being driving valuations instead of addressing customer needs. In the end, the truth shines through, good marketing is useful but ultimately doesn’t help scale startups if it lacks solid product-market-fit.” Simone Martinelli, co-founder & CEO of Volume, a provider “In our view, one of the most overhyped trends is Web3. of open banking services for e-commerce merchants It’s been going on for nearly 10 years – previously under the blockchain or Bitcoin labels – but there isn’t much to show for it. Dozens of blockchain startups have failed in this space, the only ones succeeding being those that “The most overhyped and, in my opinion, set up trading exchanges, indices or some other piece of most overrated topic in the payments scaffolding. It’s very much like the old days of the Gold industry is machine learning (ML). Rush. The only ones making a profit are the ones selling On the one hand, ML is great for largeshovels and pickaxes. All in all, Web 3 / blockchain feels a bit scale indicative processes like know like a hammer looking for a nail. It’s an intellectually stimulating your customer (KYC) and anti-money piece of technology looking for an appropriate use case. Our laundering (AML). But on the other take on this is that the need for decentralisation is not the major hand, it requires vast amounts of data to draw pain point in today’s economy. Many companies struggle with inferences about demographic preferences or an customer research, cost efficiency, complexity reduction. individual’s decision-making. Payments can Very few of them voice a need for immutability, traceability certainly provide the data, but the data is too and anonymity as their top priority. Add to this the disparate to be useful for that purpose. Simply put, environmental impact of this technology, which is anything taking full advantage of ML is a huge assignment, but sustainable, and you have the ingredients for an much larger than can presently be handled.” overhyped trend, which hasn’t yet reached maturity.” Moshe Teren, CTO of MyChargeBack, a specialist in forensic cryptocurrency investigations and card-not-present transaction disputes
4
|
Edition 44
Louis Carbonnier, co-founder and co-CEO of Hokodo, a B2B buy now, pay later provider
“I think the ease of payments is overhyped. The general idea is that payments flow easily, including cross border payments, and that the structure is there to allow this. I don’t think that’s the case for regular banks, but as non-financial entities, fintech platforms can act with greater agility. Fintech platforms now act as a marketplace for SMEs to access trade receivables financing, raise big money, and step into the role previously occupied by banks in extending credit lines to small businesses and providing a valuable alternative income source.” Morgan Terigi, CEO and co-founder of Incomlend, an invoice financing platform
