International Finance

Exploring digital payments at Money 20/20

The 2014 event in Las Vegas offered the chance to meet with just about anyone who counts in financial technology Tom Groenfeldt January 7, 2015: With over 7,000 attendees from 2,250-plus companies and coming from more than 60 countries, Money 20/20 in Las Vegas offered the chance to meet with just about anyone who counts in financial technology. For many, the program, even with keynotes...

The 2014 event in Las Vegas offered the chance to meet with just about anyone who counts in financial technology

Tom Groenfeldt

January 7, 2015: With over 7,000 attendees from 2,250-plus companies and coming from more than 60 countries, Money 20/20 in Las Vegas offered the chance to meet with just about anyone who counts in financial technology. For many, the program, even with keynotes by CEOs from top players like First Data, American Express and Western Union, took second place to the networking opportunities.

Josh Reich, founder and CEO of Simple, the banking, budgeting and savings company — sold to BBVA earlier this year — had time for just one session — the one he presented with BBVA’s executive director for strategy, Jay Reinemann. The rest of the time he was in meetings, including an update from the Federal Reserve on improving the payments system in the US. Reich values the show’s networking; he said the foundations of the BBVA acquisition were laid at Money 20/20 last year.

Dan Latimore, senior vice-president of Celent’s banking group, likes the efficiency of being able to meet dozens of people in one place over three or four days. In addition to attending track sessions and keynotes, he had set up more than 20 appointments.

“There’s no substitute for face-to-face meetings, and we were heavily booked, although we also blocked time for keynotes. In addition, I had four or five serendipitous meetings, which you can’t get anywhere else. That is part of the fun too. The conference has very high quality people, from early stage companies to incumbents.”

In his blog, he noted the emphasis on partnerships at this year’s show.

“Discover, Visa, and a host of others mentioned their eagerness to team with other members of the ecosystem to drive more activity in ways that are better, faster, and/or cheaper.”

Latimore was more skeptical about POS (point of sale) systems: “…why does every POS terminal still look like it came from 1985 (Poynte and Clover being two exceptions)?”

KBW (Keefe, Bruyette & Wood) sent three analysts to the conference and developed a detailed 10-page report for its customers, which concluded in a high-level overview:

“Last year’s conference dealt with a lot of concepts around mobile payments and companies’ strategies, though there was limited traction. This year, the promise of Apple Pay seemed to be the rallying cry despite limited progress in mobile thus far…”

The investment bank analysts were impressed by the scope of the conference.

“Having 7,000 fintech people that touch every aspect of payments is quite a feat,” said Sanjay Sakhran, a specialist in card payments processing at KBW. “It fosters significant group think and also allows for a group dialogue among all the key constituencies involved in the payments chain.”

Networking, networking, networking

I was standing near the FIS stand on Wednesday when Marcy Liu, marketing director for Geoswift, stopped to talk. I had met her along with the company’s executive team the previous day when they described how they conduct two-way payments in and out of China. Licensed by the central bank, they serve everyone from Western companies buying Chinese goods to Chinese parents paying their children’s tuition at universities abroad.

As we were talking, Peter Gordon, who heads the FIS real-time payments network, Paynet, walked over. I have interviewed him several times on US payment issues and the way Paynet will connect 1,000 member FIS client banks in real-time by the end of this year. I introduced him to Liu who explained what Geoswift does.

Gordon’s interest was immediate; FIS has just launched a remittance service, he said, and the two of them began exchanging information. That’s just a snapshot of how the conference works.

A VC executive from the Netherlands expressed regret that he hadn’t planned his conference — the size of Money 20/20 overwhelmed him

“Planning ahead of time is critical,” said Celent’s Latimore. “Block the content you want to see, plan meetings, and leave some time for serendipity, on the floor or at a meal. Money 20/20 has found a sweet spot of an expanding eco system of players who are eager to partner. They are casting a much wider net and creating a place to see what is happening in payments. The number of merchants was astounding. The founders tapped into the right concept at the right time and executed it ferociously.”

Change in venue

Money20/20, which was bursting at the seams in the Aria this year, will move to the much larger Venetian next year and expects an even bigger conference. It has entered into a multi-year partnership with i2i to expand its US event and launch Money 20/20 Europe in the spring of 2016.

“Our partnership includes acquisition by i2i, with Money 20/20 continuing to operate under its current leadership, including founders Anil D Aggarwal and Jonathan Weiner. Our entire team has worked under this partnership to produce our 2014 event and will continue to do so for many years to come to deliver the exceptional experiences our attendees, sponsors and other partners have come to expect,” the company said in a release.


Money 20/20 provided a great venue for startups — the number of 20-somethings wandering around with CEO titles on their name badges was impressive.

But in addition to the innovative startups, incumbents weighed in with their institutional power and their own investments in innovation.

Western Union unperturbed

Although a slew of international money transfer companies have launched with the promise to reduce the costs of traditional players, Western Union CEO Hikmet Ersek isn’t worried.

“I’ve heard for 15 years that people want to eat our lunch,” said Eersek, who didn’t appear worried. “Our competence is moving currencies across borders; 80 percent of our transactions are out of the US. It is not easy once the money moves across borders. We are fast and reliable, how the customer wants it and we have been doing that for 160 years.”

Western Union moves cash to cash and settles in 120 currencies in 500,000 locations, and now it has moved into digital transfers as well.

Existing companies also have scale. Western Union has set up a digital lab in San Francisco that now has 250 people, bigger than Zoom, a digital money transfer service whose stock has roughly halved in the last year.

Ersek said 80 percent of digital customers are new to the company. It is spending 3.5 percent of revenues on compliance, he added.

“AML (anti-money laundering) should be a competitive edge for us. Many financial institutions are coming to us saying this is a hard environment, can we help them.”

Western Union fills a service gap, he added.

“Seventy-five percent of our customers globally are banked, but 100 percent are underserved. There’s a big difference. In Egypt, you can open a bank account easily at the post office, but it’s not easy to do something with that account.”

Other payment enablers

Although AngelList, the Silicon Valley crowdfunding platform, lists 1,459 payment startups, Hill Ferguson, COO PayPal, thinks the opportunity in digital payments is huge. “Over 85 percent of payments still occur in cash.”

American Express entered a partnership with Walmart for Bluebird, a way to bank, save and spend with a card and mobile phone. It also launched Serve, a prepaid card. Recently, the company launched a way to use Amex points to pay at McDonald’s and introduced OptBlue, a service aimed at small and mid-sized businesses.

“We are changing the Amex brand and making it more inclusive,” America Express CEO Kenneth Chenault said. “There has been no diminution of the brand; in fact, it has been enhanced….90 percent of the customers we bring in on Bluebird are new to our franchise and 54 percent are under 35.”

Amazon Payment Services

Amazon guarantees increased sales or it will refund up to $100,000 in fees, said Tom Taylor, vice-president.

Amazon’s “Login and Pay with Amazon”, where consumers use the payment and shipping information stored in their Amazon account to pay at other online merchants, is guaranteed to increase a company’s sales in 30 days or Amazon will refund all fees up to $100,000, said Taylor.

The Amazon payment button at an online shopping site lets customers pay with three clicks, with no need to enter their information if they are already an existing Amazon customer. AllSaints, the edgy London clothing merchant, saw a 34 percent increase in conversions and a 24 percent increase in their shopping basket when the company started using the Amazon payment methods.

Rich Ascott, AllSaints global director for digital, said that tens of thousands of transactions went through the Amazon payment services without generating any comment. Only in late October did one customer remark that paying with Amazon was much quicker. Nobody else, apparently, gave a second thought to using Amazon to pay for attire purchased through an East London company’s online site.

Bitcoin and Japanese regulators

Benjamin Lawsky, Superintendent of Financial Services for the State of New York, said his department launched an extensive inquiry into virtual currencies in August 2013 and now has a team of about 15 people working on the topic.

When Mt. Gox, the world’s largest bitcoin exchange, suddenly stopped trading in February, Lawsky was in Basel for a meeting of financial regulators. Lawsky said he took aside the Japanese regulators at the meeting and offered assistance; he said he would send New York’s entire virtual currency team to help. “Unfortunately, the Japanese regulators had no idea what I was talking about.”


Marc Goodman, author of Future Crimes due out in February, introduced a new abbreviation:  CaaS — Crime as a Service.

In Brazilian favelas, CDs with stolen credit card numbers are sold with SLA guarantees that 80 percent will work or you get your money back. They also provide tech support for users who have troubles. “Crime is becoming software, it is becoming automated.”


A dozen or so fintech startups got the equivalent of speed-dating with the audience — six-minute presentations spread over two days. Two had found uses for the digital spare change — the amount left over if consumers round up their mobile payment to the next full dollar.

Spare will use the money to provide food for the poor, or food insecure in the words of founder Andra Tomas who said that 10 cents can provide a meal through a New York food bank. Spare has a deal for donors and restaurants — the third time a consumer rounds up in the same restaurant in a single month, she gets a free cocktail. Continued patronage can result in a free appetizer. The phone app also shows how much a donor has given and the results for the program in the city. Restaurants get a relatively low-cost loyalty program — cheaper than Groupon — not to mention the feel-good factor.

Acorns, another company in pursuit of digital spare change, funnels it into an  ETF-based investment program for participants. The firm said it signed up 250,000 people in just a few months; half are active users. They can also contribute real money to their investment fund at any time, and a simple graphical interface allows them to choose the risk/reward levels they feel like. Ease of use is paramount — one new participant said he signed up while waiting in line at Starbucks.

Another innovator in the speed dating was Viewpost, which offers secure electronic invoicing and payment, including negotiation over discounts for early payments. It announced a partnership with U.S. Bank to provide a solution for small businesses. It is entering a business with established players, including Ariba, now part of SAP, Traxpay and Basware.

ModoPayments provides a way to combine payments, including credit cards, loyalty points, coupons, gift cards and merchant offers, into a single payment card on a phone that can also offer shoppers loyalty points through Beacon for simply stepping into a store. Companies can distribute gift cards and drive traffic to brands or stores while learning more about their customers.

24-hour Hackathon

The 24-hour Hackathon ahead of the conference drew 450 participants. A team of three people who did not know each other before Hackathon won the top prize with Payperless. Like all five top winners, they received $20,000 and also got to present their solution, which lets merchants accept bitcoins without changing their payment systems, to the conference. Taking turns in a smooth presentation, Aldo Briano, Veronica Borges and Eduardo Medina explained how they used APIs to Mercury Payments and to build their application.

“Our solution will enable merchants to accept a bitcoin payment as easily as accepting a payment through a gift card, and we see this as the future of payments,” said Briano. “We were able to convert bitcoin to a payment method the merchant already understands.”

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