Among the things you'll learn:
- Tailored Communication Strategies: Learn how to craft targeted messaging for different generations to enhance understanding and trust in AI, mobile payments, and other emerging payment technologies.
- Overcoming Barriers to Adoption: Gain insights into the common concerns and challenges each generation faces with new payment methods and explore practical solutions to address these barriers effectively.
- Building Cross-Generational Trust: Discover techniques to bridge generational divides, ensuring that every age group feels secure, informed, and empowered to adopt modern payment technologies confidently.
- Fraud and risk mitigation: Steps to educate consumers on how they can help protect themselves against fraud.
Transcription:
Joey Pizzolato (00:10):
Thanks, Holly for the introduction and welcome everybody. Thanks for sticking around with us. Very excited to moderate this panel on how to bridge the gap between different generations and their adoption of modern payment technologies. Before we get started, I want to give my panelists an opportunity to introduce themselves a little bit more. Tell us a little bit about your role at your institution and about yourself. Sanjeev, maybe you want to kick us off first?
Sanjeev Jha (00:37):
Sure. Good morning everyone. This is Sanjeev Jha. I work for Truist Bank and I lead Zelle engineering platform there.
Vishal Kapoor (00:47):
Hi everyone. Happy to be here. I'm Vishal. I am running product and design at Affirm. We are a company that helps consumers finance on either point of sale or through a card to borrow from merchants and finance their purchases.
Doug Sturm-Smith (01:03):
I'm Doug Sturm-Smith. I'm from PNC Bank. I'm in our treasury management area. I oversee our immediate payments and integrated payables solutions.
Victoria Zuo (01:13):
Hi, I'm Victoria Zuo. I work at QED Investors. We're a large FinTech specialist, early stage venture fund and I hope run a lot of our efforts in e-comm payments, e-comm, and just general early stage investing.
Joey Pizzolato (01:28):
Alright, well welcome everyone. Thanks for joining us. We've got ton to cover, very little time. As you all know, different generations are adopting payment technologies at their own pace, which is forcing banks, financial institutions to reevaluate how they educate consumers and businesses about their different offerings. I'm thinking embedded payments, digital wallets, account to account, buy now, pay later, just to name a few, the list goes on. So just to start off, beyond traditional e-commerce payments, what emerging payment areas hold the most promise for growth and innovation, especially when considering the younger generations? Maybe Victoria, you want to kick us off there?
Victoria Zuo (02:10):
Yeah, happy to. One of the areas that we have been spending a lot of time on is gaming and mobile gaming payments. So this is your Candy Crush actually doing payments on your phone and there are a lot of tailwinds in this category. It's inherently high risk, so there's a lot of margins if you do it right, it's inherently global. Nobody's going to sign up to a payment method if you don't have near complete coverage for a lot of different audiences. And also there's a lot of tailwinds between the kind of spot between Apple and Epic games and Google on how to support fair payments for these in-app purchases. So we've been very excited about that category in general.
Joey Pizzolato (02:53):
Great. Doug, what about you?
Doug Sturm-Smith (02:56):
We really look at a lot of business to consumer type of areas for our distributions or outgoing payments about where those payments are going to grow. We already see it a lot in new type of payments that come around because of instant payments have made it available, like earned wage access, micro loans. Those types of areas seem to be good areas of growth. I think as we start to see more adoption of instant payments and people really try to move up into that space of being able to say, Hey, I understand these types of payments, we're going to start to see it grow into the business to business type areas. Think in a previous panel there was mention about somebody who had a 58-year-old AR AP type of person in that role and we're going to start to see this generational shift to younger people or different generations of people into those types of roles. They're not going to go around and try to get that check signed previously mentioned. They're going to start wanting to use what they're familiar with and that could be more type of the electronic payment types. So that's kind of what I see with the adoption going.
Joey Pizzolato (04:01):
Great. Great. Vishal,
Vishal Kapoor (04:04):
I guess I have to say BNPO, I assume you would. I think I'm the right person on the panel. So look, there are two secular trends that we are noticing from both consumers on one side and business on the other side. And that secular trend speaks to having more clear and concise terms at point of sale because credit cards were invented when there was not even color television. That's the fun fact that we throw around and it has really continued down that sequence of events leading us to reinvent and reimagine credit and credit outcomes at the point of sale. So the secular trend that we see for consumers is to have a more transparent and flexible point of sale lending product and that's where it enters a firm as an option to do that. And on the business side, these businesses are looking for newer generations who are opting in to this newer, more modernized way of payment because they're otherwise losing out on that demographic and the status.
(05:07):
If we don't see a B-N-P-L on a checkout, a meaningful amount of volume is just not consummated. So the customer will not actually complete the transaction. So that is the secular trend that has been going on. We are still very early in the innings, as they say in the us we are single digit in e-commerce as a category, but if you look at other geos and we can work backwards from there, the Nordics or Australia BNPL forms about 20 to 30% of share of cart so we can see where this thing is heading over a period of time.
Joey Pizzolato (05:40):
Alright, thank you. And Sanjeev?
Sanjeev Jha (05:43):
Sure. Yeah, so I think, look, the new generation, I think of my son and his friends, these guys don't know anything other than digital, digital native. In fact, when we go anywhere, my son tries to look at any screen and try to touch to think if it is interactive or not. So unless we mess up things going to go and stay in digital world from a payment perspective. And when you think of this new generation, honestly nobody's thinking of payment. They just want to buy a video game, want to buy a backpack and move on. So digital native experience, transparency is a big thing, seamless experience. These are going to continue to play the theme in terms of what is going to be there. I see lot of traction on Zelle, especially younger user, not just because I'm leading Zelle for Truist, but I think shift from 18 to 30 is happening in front of us. We are just seeing the volume growing and we are seeing that user adoption. So those trends I think continue to happen will continue to happen. Somebody talked about Instagram checkout, somebody talked about sending from your glasses, you're going to go and buy things. So those are innovation that is going to continue because it is about your experience. No one wants to get out of those experience and then go, oh, I have to make a payment. I'm just enjoying the show I want to buy. Who gives me that seamless experience?
(07:11):
Those are things that's going to continue to grow in my view.
Joey Pizzolato (07:16):
That transitions really nicely into my next question of e-commerce. We talk about meeting the customer where they are, and that conversation is starting to translate into payments, especially when we think about my parents' generation who are baby boomers and then going farther down to Gen Z. So from y'all's differing experiences, what strategies have been most effective in meeting your customers, where they are in their payment journey, especially considering this diverse shift in preferences? Maybe Doug, you want to kick us off on that? .
Doug Sturm-Smith (07:52):
Yeah, absolutely. So again, coming from my perspective of doing outgoing payments for businesses, right? Business consumer, it used to be that we would talk with treasury management professionals. They would say, Hey, I've got a very efficient use. I just shoot checks all the time. That's all I do for my consumer payments. Well, those changes of expectations from the consumers have changed over the years about saying, Hey, I want to have this experience. But yet as we look across different generations about what really is that experience mean to them from receiving even a payment. So one of the things that we've done is we partnered with different companies to provide that type of an experience to be able to say, Hey, you've got a hundred dollars payment. Maybe it's an email that you receive or a text message that you receive and you go into this experience and maybe, boy, I am an older generation, I feel much more comfortable just sending me a check because I want to have that check in my hand.
(08:56):
Or am I part of a generation that, boy, I really just want that digital experience and I know that I've got my PayPal Venmo wallet available. Or maybe it's using Zelle for maybe Gen Xers who are saying, Hey, I feel very comfortable having a bank back instant payment come into my realm. So instead of trying to figure out exactly which one type of payment is right for all of a consumer base, it's really changing that to an experience. And what we see with that is a lot of our customers being able to say, Hey, this customer experience has actually been enhanced. The last thing that you want to do as a company is to invest in a very great digital experience. And you can look at the insurance industry over the years that have done that. How many of us take a look at the apps now can take pictures of your insurance claimer of whatever that you need to do and have that adjudicated within eight minutes. But when you come to that end of that experience and you say, Hey, send me a check, that's not the best digital experience. You want that instant payment, you want to complete that loop right away. So it really is about meeting the consumer where they're at in that process and the experience that you want to build.
Sanjeev Jha (10:06):
Great.
Joey Pizzolato (10:07):
Sanjeev, any thoughts there?
Sanjeev Jha (10:08):
Yeah, no, I think I agree with Doug and in addition, I feel payment is also largely habit driven. If you are doing it certain way, whichever generation you are from, you want to continue to do it that way. So it is essential for businesses to think, right? And sometimes what happens when things become obsolete or sometimes things become a little bit too risky for you recently, I dunno if you heard JP Morgan for example, going to restrict paying through Discord for, so you've got to educate on certain point, but again, meeting them where they are not because payment is what they want to do. They want to do what they want to do, and then you got to make sure that they're able to do, whether it is embedded payment, somebody talked about earlier or whether it is wearable payment, whatever it is. So I do not want to leave my experience and I do not want to have a new habit come just because it is payment. So I think this trend is going to continue in my mind. And then open banking is a great segue for us to facilitate that kind of a trend.
(11:21):
Partnership and sharing with FinTech for banks, again provides that kind of opportunity. So I think those continue to grow in facilitating engagement as well as experience.
Joey Pizzolato (11:36):
Victoria, any thoughts on,
Victoria Zuo (11:38):
Yeah, I think in the last four or five years there's a lot of adding payments to software, embedding payments in software. I think right now we're actually seeing a lot of payments vendors adding software to their product suite. For example, Shopify's not a payment vendor, but their whole shop app is really pushing the shop pay product because consumers are actually getting something additional to payments from the experience, which is order tracking in their case. And a lot of times I think consumers are asking, okay, payments is, I don't really want to think about it. I want to get something additional out of this experience. And we see a lot of payment manager actually breaks around on, hey, what can't we actually add to our product suite so that we're not only making this experience seamless, but also there's something on top of that that makes consumers pick us over others. So
Joey Pizzolato (12:35):
That's great. That's great, Vishal?
Vishal Kapoor (12:39):
Yeah, so I think there are three main things that we look at when we see consumers and where to meet them on it is on the product display page. So people, when consumers are coming and shopping, they're actually making a decision not at the checkout journey, but at the top of the funnel as we call it. And so we as a firm try to introduce the messaging as low as messaging during the shopping journey right at the start of the customer where they expect to see us. The second is digital wallets. In fact, shop pay, we are very proud to call as one of our first partners to be on that journey. We enable the shop pay installments product and we see consumers really taking on and using these wallets wherever they want. They're shopping. And so we also power most recently Apple Pay. So Apple Pay installments through Affirm is another major consumer shift that we see.
(13:36):
And the last but not least is having our own physical card, which the consumers are also asking in terms of where else can I use Affirm. So to tie all of this together, affirm acceptance mark is the key thing that we realize meeting the customers where they are, be it on the more than 330,000 merchant partners that we are proud to call partners or in this in-store physical purchase flow because we feel that customers are asking for a better way of paying over time. And that includes every step in the journey, be it e-commerce or be it offline retail.
Joey Pizzolato (14:13):
Great, great. And I've got a follow up question for you. How are younger generations attitudes towards traditional credit cards evolving and obviously the alternative to that is sort of buy now, pay later. So how is that evolution helping gain traction for buy now pay later?
Vishal Kapoor (14:33):
So we study the consumer trends and behaviors via few different things. We do survey and we ask questions based on what are your preferences and behavioral trends based off of where are you shopping, what are you shopping for, and what was your experience after you shopped for that particular thing? So there are service, there is data that we look at our 21 million active consumers that we have and 60 million registered users in the US and Canada. And then finally we talk to our merchant partners to understand what they're seeing as particular trends in terms of when consumers come to the website, what are they doing and what are they asking for. The number one thing that we find over and over with younger demographics and 60% of our network is either millennial or Gen Z, is that they want flexibility and confidence while they shop. So I'll break both of these into separate things.
(15:32):
So flexibility for them is being able to actually understand what plan is right for them because unlike a traditional credit card, which offers you a revolving line of credit and then you can just pay for either a coffee or a couch and revolve, we offer specific plans for that particular purchase so that you can choose what is right for you based on your particular month, based on your need, based on how long you want to finance for. So that's the flexibility part. The other one is the confidence. The confidence means that you know exactly what you're paying for the duration of the loan because it'll never ever change. And so those two trends from the younger demographics is something that we actually built for the entire demographic because we feel that the flexibility and confidence is a very powerful combination. And the reason that we are able to do it and offer it to these millions of customers, to all these merchants is through real-time underwriting, which is the baseline by which all of these things are structured. So that is how the service and the consumer trends are resulting into these features, which are then meeting the need of the hour for these particular segments.
Joey Pizzolato (16:38):
Great. And I know I directed that question at Vishal, but if anybody else had any thoughts on how younger generations are thinking about credit or credit cards specifically, please feel free.
Sanjeev Jha (16:51):
Not necessarily credit card, but I think it's optionality. So having alternate ways of getting your stuff done with this buy now pay later or credit card or pay by bank. So I think having that flexibility, as Vishal said, is extremely important. And again, I would say transparency. I know what I'm paying when I'm paying and know more. So having that clarity is actually extremely important. I think it's important for everybody, but the younger generation, I think they opt for that based on what we see, that if you are very upfront about the fee, no harm done, either they will say yes or no, but it is very clear from a customer satisfaction perspective for Zenz or millennial, that's extremely important. And that's probably one of the reasons why things like buy now pay later is pretty popular because they know exactly what they're going to pay when and how. So I think and then pay by bank as an option, which could come pretty quickly. I think we all love our credit card point, but I can tell you pay by bank is coming.
Joey Pizzolato (18:00):
That's another option. Which law of traction
(18:03):
When do you think is going to, I mean pay my bank slow to be adopted? So what do you think it's going to take to get this ball rolling?
Sanjeev Jha (18:12):
Again, I think we are all creature of habit. So I mean, I do not like to buy anything unless I get points or miles. So it is a certain shift that is going to happen, but the point is, did I have option earlier, possibly no. And now I have more options. It's right at the point of sale or where it matters. So I think it'll take time. It's just primarily about what kind of incentive it can give us the partnership where people can start to see the value, but hey, this is your money you first earn, then you spend kind of mindset. So we'll see. I think it is going to take some time, but that's the trend.
Doug Sturm-Smith (19:01):
Just to add to that a little bit more about creatures of habit, what we really look at is what is really the ease of use, the ability to do it. When we build our solutions, we think about being in that consumer role. Do I carry around a wallet now you would think 10, 15 years ago who doesn't carry around a wallet? Well now with everybody who having digital wallets and digital access, I have got a person on my team, a payments team who would only pay by their phone. And so really it's about trying to meet where people are at. It's not about, boy, is it a debit card payment or is it a Zelle payment? It's about what do I feel most comfortable with and what's easy in order to go ahead and help with that payment type. If I carry around my wallet, I can easily pull out my debit card and put in a 16 digit card number to receive a payment nowadays.
(19:53):
Or is it about being able to say, Hey, I don't, but I know that I feel very comfortable with my mobile phone number being my token for Zelle. Although a consumer doesn't think about that, they think about, oh, it's easy to do because it's tied to my bank account, and so now I can go ahead and put in that mobile phone number and receive a payment instantly. So it's really about trying to change that habit from being a boy. I feel very comfortable with it to the next step of being able to use it in an ease of use type of frame.
Victoria Zuo (20:22):
And I think for a consumer, there are very few things that matter. Probably three things in total. There's your rewards, your points, credit and ease of use. And when we're comparing credit card payments to say pay by bank, pay by bank really needs to improve on all three dimensions to catch up with a lot of the other payment methods. B is of BNPL or credit card payments, debit card payments. If you think about, okay, am I going to give my marketing dollars for cash back to the consumers? Am I going to allow BNPL about pay by bank actually extend credit or am I going to allow people to bring their payment tokens to wherever they are? I think there's still quite a bit of a gap on these journeys.
Joey Pizzolato (21:19):
Great. Yeah. Okay. So we talked a lot about educating and strategy, communication, all of that to different younger people especially. But what specific communication and education strategies are proving successful in building trust and driving adoption to these different payment flows? And that can be either younger generations or older generations. I'm thinking my parents just started using Zelle maybe last year because I needed to pay them and I'm not going to send 'em a check. So maybe Sanjeev if you want to start us off on that one. Anything specific that you're finding is working?
Sanjeev Jha (22:04):
So I think education, obviously there's a lot of education that is around out there. I think it's also engagement, how you can engage while you're educating. And then at the point of action, if you're doing something, let's make sure you're reminding, because again, we all largely being on digital world, we know that okay, if I click on a link, I could land in trouble still. If I see a Cancun trip for $300 for entire family, I mean too good to be true, but I somehow feel that okay, not to me. So I go and click on that and then I do as L, and then it becomes a scam, which was by one of the lawsuit that got dropped by federal agency. And so education is going to be extremely important, but more of an engagement. It's not just you just can't wash off your hand that, Hey, I sent an email, I sent a flyer.
(23:07):
You need to engage. So I think especially in Truist, we do a lot of interactive sessions with our high school grad, college grad. And then again, I think we try to do at the point of action. So those I think are going to be helpful for any generation, educate and tell them where there could be a pitfall at the point. And some of the drills we internally, especially internally, we try to simulate a situation with a teammate who is going to talk to the customer so that they know exactly what and when they should engage. So I think a lot of focus has to be there on both sides of the house to ensure that people are safe and secure and able to do their business.
Joey Pizzolato (23:59):
And Vishal, what about you? I know that the younger generations are far and away, the ones that are adopting buy now, pay later. Are you even focused on trying to get an older demographic?
Vishal Kapoor (24:15):
It's a great question. So when we look at our total base of 60 million registered users, we actually see a very nice Gaussian curve of all ages and credit demographics, which is probably not unique when we talk about it internally because we serve the likes of Amazon and Walmart and Target. So we feel we get a very good generational representative sampling of each demographic. So when we build products, they're actually for everyone because we feel that everyone can benefit from it in the way that we have designed it. So the two ways to talk about this is we focus a lot on comprehension of what this thing does because for many it's still new, be it young or old, they have not seen it before, but they see as low as messaging pop up and they're like, oh, I want to try this. I want to click on it.
(25:09):
I want to see what happens next. So for us, comprehension is a really, really important part of the puzzle and that can flow in different pieces. We have something called purchasing power. So people really want to know how much can I spend with a firm? And as soon as you launch the app, that's the first thing that you see in big letters. So comprehension in that regards. And the other one is just ease of use and the speed for it, which is what we feel from the younger demographics being more tech savvy, but everyone is now expecting that. So if our underwriting takes forever, which is the core product, people will just X out and use something else. So there is this demand for having very speedy, very easy to use, very convenient features. And so we try to marry those two things that can sometimes be opposite right comprehension and then streamlined and easy to use, and how do we sprinkle that? And that's the puzzle that we do every single day is make sure that we can achieve both those objectives in terms of consumer expectations.
Sanjeev Jha (26:11):
I just wanted to add one more point on buy Now. I personally had this experience when I went to Home Depot to buy something. I think the associate there, they did a fantastic job of explaining the product because I could really care less whether I'm being upfront or using buy now, but I think them educating me about it and how easy it was, I think that really helped. So even the partners and associate education can be a great deal to convert some of the older generation folks.
Joey Pizzolato (26:44):
Yeah, no, I would agree. I just personally use buy now, pay later for the first time over the holidays and on its surface I understand what it is, but why would I do that instead of my credit card? And then you actually go through the experience and it's like, whoa, that was really easy and no interest. Why would I not use this more? Doug, anything to add in terms of specific communication strategies that have worked for you?
Doug Sturm-Smith (27:13):
Not anything really to add. I mean we really focus on at that time that the payment is made about being able to do action. It's like anything else where you can tell somebody, and boy, I remember telling my teenage kids a hundred times, but until it actually comes to something that they need to take action on, then they decide to listen. And it's the same thing in this type of situation as well, going back to the buy now, pay later. I just have this image in my head of being at Home Depot and having the store clerk explain by now, pay later to me as my 20-year-old son's next to me and just rolling his eyes. I can't believe you're here listening to this right? That's what we're talking about in that experience as well.
Joey Pizzolato (27:57):
Victoria,
Victoria Zuo (27:58):
Not too much to add. I think a lot of things that has also helped that we've seen is borrowing the brand of trusted parties and stakeholders when you're doing a partnership with say, Amazon, and when you're doing a partnership with one of the major banks, you can kind of borrow the brand of the trusted brand of another partner and get started on this little flywheel.
Joey Pizzolato (28:27):
Great. Thank you. Okay. So without giving away your secret sauce, can any of you share a specific successful initiative that you've put out to help increase adoption of any new payment flow that you're trying to push?
Doug Sturm-Smith (28:48):
Yeah. One of the things that we looked at when we were developing some of our product solutions was we had to meet our business clients where they were at as well in addition to the business clients trying to meet where their consumers were at. And so it wasn't just enough for us as a bank to provide all of the instant type of new emerging type of payments. It was a matter of putting them and packaging 'em together and putting them in such a solution that really allows ease of use for our businesses to then give choices to their consumers. So that's one of the things that we did, and we continue to add to that solution set as these emerging payment types grow. And so that's really what we're trying to do to help facilitate that. We've had great success with moving a traditional a hundred percent of checks going out the door to now 90% using some type of an electronic payment.
(29:43):
Everybody seems to be satisfied with that, and it's not just within the treasury area that's happy with it, it's the customer solutions part of that business side. They're not getting a phone call a week into it asking where their check wiser check hasn't shown up at their doorstep yet, those types of items. So really it's about trying to say, Hey, what can we do in that solution set to help move that adoption to more electronic payments without really putting a burden on our clients to say, Hey, you don't have to make a lot of change here in order to do that as well.
Joey Pizzolato (30:15):
Victoria, what about you?
Victoria Zuo (30:18):
Well, I don't run a payments business, so not a lot of anecdotes, so I'll leave time for the other folks who actually run real businesses.
Sanjeev Jha (30:27):
So for us, there were a couple of new product that we launched off RTP, and I think the most important thing was how it is actually going to work. So having ephemeral test environment, having quick reference guide what exactly job, I mean those are specific, I think everybody does it, but how you present it, how you bring it as one team so that you just call one number, these are the support, these are the help. I think those really help. Bottom line is from, especially for treasury client or commercial client, they just want to get stuff done. They do not want back and forth, okay, what does this mean? So having those clarity upfront did help us a lot and just to test and demo a couple of times to the staff, sort of a playbook. Those things were key to the success of the product and we see the continued adoption based on those.
Doug Sturm-Smith (31:29):
One more thing to add to when we're talking about outgoing payments, we're really trying to transform even our business clients, especially maybe not the largest or the corporate clients that are out there, but some of that medium sized business, a payment is really a payment. And we've really kind of confused the marketplace of being able to say, now we've got, instead of check and wire at ACH is your options. Now you've got this proliferation of payment choices that are out there, but how do you put that or how do you embed that into the experience of the payment? Is it a matter of just being able to say, Hey, I've got to get this payment out today and therefore then somebody that can be sent as an RTP, it will go as an RTP or maybe a same day ACH. That doesn't really matter to that customer, that business customer, as long as they know that that payment's going out today and they want confirmation transparency that that payment was delivered. And I think all of that kind of comes back into this evolving kind of movement towards a payments to payment and how do we in the payments professional business be able to say, how do we figure that out and provide that solution to all of our customers in such a way that makes it not so confusing out there.
Joey Pizzolato (32:42):
Right, right. Vishal, anything to add?
Vishal Kapoor (32:46):
Maybe just one thing to maybe package the things that we've been talking about from a consumer interest and demand and demographics perspective, we build this thing called adaptive checkout, which essentially is a fancy way of saying we give you the terms that we feel are going to be most relevant to you. So the most personalized terms, so similar to what you experienced as a 0% free money float, many people like that, some folks actually are okay paying interest, but they want their duration to be longer. And some folks just want a shorter duration because they just want it to be done with. So we realized after many, many years of doing this with large and small partners, that customers actually have their own preferences when they go and shop. And we provide them this optionality, this flexibility, this transparency that we were discussing. They're going to actually just choose whatever they feel is the best thing for them. And so Adaptive Checkout is basically our way to price the risk in a way that we can present in a very easy to understand way for our consumer. So that's the innovation that we brought to the table.
Joey Pizzolato (33:47):
That's great. That's great. We've got about six minutes left. Oh, we've got a question.
Audience Member Richard Crone (33:57):
Richard Crone with Chrome Consulting, LLC. Gosh, what a great panel. Thank you so much, Sanjeev, to your habituation point, right, and Doug, right, we're creatures of habit. Victoria opened the panel with a whole new habit occurring that not a lot of us are familiar with. Gamification shopper team, right? Social commerce in itself growing at 40% a year. TikTok even with the cloud over it is adding a hundred thousand new creators, influencers, micro merchants, sole proprietors a month. When you do press the embedded payment key, Vishal knows a firm is front and center, but also Apple Pay and Venmo and PayPal. Joey three weeks ago wrote a great story about JP Morgan Chase blocking Z. Where's the opportunity for banks to embed payment knowing that blocking a transaction type in the fastest growing market since the advent of the internet shopper payment is not a strategy to play. And is there an opportunity for early warning to hyper validate like PayPal and Affirm and Venmo do in order to play in this market? And is early warnings pays PAZE our holy grail to get there? That's the question.
Sanjeev Jha (35:33):
Yeah, that's a great question. I'll probably take a shot for it. So I think there are a couple of things which is happening. See foster payment or instant payment. Obviously there's an obligation on the financial institution and network to ensure that it is safe. Personally, I always like to do my business with a regulated entity because I feel at peace that my money is safe. So early warning actually has done quite a bit working with all the seven owner banks, they have almost added about 30 risk attributes. They call it Zelle Risk Insight, which actually goes and vets the recipient, not just sender, everybody has obligation to each other. The center is right because we do KYC, but recipients are also getting vetted. So in addition, what early warning has done, they have launched a new capability where every Z user will have a unique id.
(36:32):
So once this becomes mainstream and in use, there's going to be traceability of transaction and a fraud and scam associated with a player and that player will be actually flagged at the network level. So regardless of which bank you go, because you do to us, you are going to go to another bank that's not going to play out. So look, I think what JP Morgan did, I think that was probably right for their business. That's why they're doing their call because they were one of the primary in the lawsuit that was there. So obviously they are leading the front to ensure that consumer are safe. But there are many ways to solve for it, and I think the large way to solve for it is going to be when industry come together to fight by an actor because bad actors will always come up with some creative solution. So I am pretty positive that with this new unique end-to-end ID that EWS has come up with is going to do wonders in my mind.
Doug Sturm-Smith (37:34):
No, I don't really have much more to add to that.
Joey Pizzolato (37:37):
Any other questions?
Audience Member Carolina (37:44):
Hi, my name is Carolina from Amazon. I have a kind of follow up on that, on the service that EWS provides and the ability to upfront validate information like bank account. One of the recent findings we discovered is that some of the virtual bank accounts that are now being used by a lot of the payment schemes or payment ecosystems that we are talking about, they're not contained by EWS, they're not stored. And so we learned that this is kind of a gap. I guess their data structure doesn't allow them to record that. So it's really hard for us to move in different directions when these services are not held by anyone or it is not supported by anyone. I don't know if I'm surprising you with my comment and maybe you didn't know, but I was just kind of curious if you have any thoughts.
Doug Sturm-Smith (38:42):
Yeah, one of the things that I think is challenging, right, is there's a lot of different type of tools out there for account validation, whether you're paying somebody you're receiving payments back, we talk about the tokenization process that's available, but one of those has been a gap for a while is this virtual account type of system. But how do you go ahead and solve for that? I think the banks together know that that's an issue that's out there and actually have asked somebody like EWS the clearinghouse to say, Hey, what do we do with these types of virtual accounts when we want to go ahead and validate who they are. So I think there's some work there that needs to be done and I think that's one of the reasons why EWS has been so focused on some of the fraud control items that they have in place right now.
Joey Pizzolato (39:31):
Yep. Great. Thank you. That is all the time we have. Unfortunately, if you have more questions for our panelists, feel free to cost them right when we get off stage. But in the meantime, please do give a round of applause for our panelists.