There is no doubt that fintech has endured a turbulent 12 months, rocked from one damaging scandal or crisis to the next. Ultimately, this volatility in the market affects consumer confidence – and in times of ebbing confidence, winning trust becomes even more important.
Trust Payments works with clients to understand and resolve their payment dilemmas, with a global technology platform that connects to over 50 global banks to support multi-acquirer processing; as well as its own merchant acquiring solution in the EU, acquiring.com.
‘Hair-raising’ period won’t slow industry down
Conway’s role at Trust Payments includes purview over its M&A activities and strategic partnerships. Attending events like Pay360 is important for catching up with familiar faces and seeing what new companies are doing within the market. Despite the recent economic turmoil, Conway still believes there is innovation within fintech – and particularly within the payments segment, which has been fast-changing for several years. At events like these, she always encounters startups that she hasn’t met – or even heard of – before.
Granted, the fintech space has had a nervy couple of weeks or even months. The fallout from the FTX affair rippled throughout the entire fintech ecosystem; separate verticals like payments will not have been totally insulated from it. And then the collapses of Silicon Valley Bank, Signature Bank and the bailout of Credit Suisse will have caused a serious dent in consumer confidence.
“If you look at what's driving the growth, it's demand. There's a reason that there are changes in the system. Will they happen overnight? No. But the fundamental reasons for the changes are still there. Yes, there's been a combination of bad timing and bad actors. It hasn't helped. But I don't think that changes the fundamental reasons for innovation and growth. I think the fundamental reasons – how do we get faster, easier, more secure payments increasingly digitised and how do we ensure that more people are involved in the financial services sector and in payments in general – I think all of those reasons are still there.
“I'd say the past nine months have been pretty rocky in general but I don't think that's going to change overnight, frankly. But I also don't think it changes the underlying demand for the services and the innovation that drive the industry.
“A number of really strong companies historically have come out of turbulent times… the 2008 financial crisis being one example. These cycles repeat each other and, from what I've seen, they tend to get shorter and shorter.”
Still a need in the world for physical cash
However, if there’s one thing that the current economic circumstances highlight, it’s that there is still a need for cash. That’s perhaps a counterintuitive statement for someone from a digital payments provider to acknowledge, but nonetheless it’s true.
“I think we're seeing the bifurcation of the economy. There are those who are in jobs and doing fine; and those who are obviously not. To me, what it shows is there's still a very good reason for cash. I still think it's easier to manage your finances with cash. I’m not talking about having a shiny app where you can track everything. I’m talking about having £200 and that’s your budget – once it’s gone, it’s gone.”
Cashless adoption is at various stages of maturity, depending on the country. All the Scandinavian countries are getting closer to cashless adoption, while there are some surprisingly large economies still reliant on cash. Indeed, out of Merchant Machine’s 2022 ranking of the 10 most cashless nations worldwide, only one – the UK – has a population greater than 20mn. The others are relatively small, affluent countries like Switzerland, Singapore and the Netherlands. Meanwhile, Italy and Portugal both feature on the list of Europe’s least cashless societies. Globally, that list heavily features countries in Africa, Asia and South America – suggesting that the ability to switch from cold, hard cash to digital wallets is a matter of financial inclusion.
On the lookout for more innovation
At Pay360, Conway is also part of a 10-person judging panel for FinTech Pitch LIVE – a competition to find tools that are revolutionising the industry. For fintech founders in particular, it might be hugely beneficial to discover what a senior executive at an authoritative payments service provider – the executive in charge of setting acquisitions and partnerships strategy, no less – looks for from innovators and founders.
So, what is Conway hoping to see more of? Her first answer might not surprise you too much, given the industry’s loose relationship with profitability of late. “I'm looking for signs of sustainable growth,” Conway says, “I’m trying to get beyond the buzzwords and the hype cycle and understand what's really driving your business model.
“I'm looking for [businesses] that are actually going to be profitable and looking for revenue drivers. It’s always been that way, but more so now than it has been for the past 9-12 months for pretty clear reasons. Does a company actually have a solid idea of where they're going or are they latching on to the latest trend because they think they can get venture funding if they use the word AI enough times in their pitch?”
Conway says she’s starting to look beyond the pilot, because it’s relatively easy for companies to announce that they’re trying a new technology out. It’s good PR for them. It doesn’t mean that the technology is proven.
“I'm looking to see some traction ideally beyond just a pilot,” she adds. “That can be one or two customers who've gone to the next stage or it could be multiple pilots across different sectors in which case you get more data points to learn how your technology's working. We don’t expect them to have a huge list of customers. That’s just not realistic at this early stage. But those are the things we’re looking for.”