Payment Week: Commerce Takes Shape in the Metaverse

The connected economy saw big news on multiple fronts this week, with the buzz surrounding Elon Musk’s takeover bid on Twitter, Meta announcing its metaverse trading plans, Goldman Sachs preparing to launch checking accounts and Amazon catching up with Walmart in retail spending.

Bessemer Venture Partners Partner Charles Birnbaum joined PYMNTS’ Karen Webster to discuss the news at This Week in Payments.

The first item on the agenda was Elon Musk’s decision to buy Twitter.

Read more: A Twitter takeover by Elon Musk has the power to shake — or sink — social media

“Obviously it’s a platform with huge leverage, especially in the tech community, so as a venture capitalist you don’t have a choice to pay attention to what’s happening on Twitter,” Birnbaum said. “It’s a platform that people use for many different reasons, and whoever owns it, I don’t think it will change the nature of how people use it for a while.”

Trade grows in the metavers

Meta’s unveiling of plans to take nearly 50% of sales from creators looking to move to Meta’s metaverse also made headlines.

View more : Meta is opening up its Metaverse platform to payments, and it’s not cheap

Birnbaum said Meta sees a huge opportunity to shape payments in the emerging metaverse and become a dominant player in the space — no surprise from a company that has telegraphed its intentions to become the go-to brand for everything about the meta. when she changed her name from Facebook.

He also said he expects there will be an ongoing push-pull between the FinTechs that have been so successful over the past decade and those building pure-play payment infrastructure, particularly in new metaverse platforms.

And while some detractors are quick to point out that the metaverse is still only used for games and virtual events, Birnbaum said those entertainment segments still account for a large portion of gross domestic product (GDP).

Read more: AI-powered dogs for the Metaverse, secured as NFTs, are brought to you by Digital Pets Company

“Even the development of eSports over the past decade has been quite instructive for many investors in the market,” Birnbaum said. “You just need to monitor user behavior, follow the flow of developer talent, and then see what happens.”

Everyone becomes a FinTech

Also in the news this week are some earnings reports from the banking sector. Among them was Goldman, which announced an impressive number of credit card loans and said it would launch checking accounts later this year.

View more : Goldman scrutinizes former lenders with plan to offer digital checking accounts

Birnbaum said FinTech offerings are becoming a table offering for almost any company looking to scale its payments strategy, pointing to Amazon’s long history of providing financial services to its merchants, platform financing offerings — forms like Shopify and online marketplaces, and the Apple Card.

Read more: Former Treasury Officer Michael Barr is the favorite of the Fed’s police benches

“I don’t know if consumers really know what they want until you really give them something tangible to hold onto,” Birnbaum said. “We thought about the last decade of consumer FinTech, and usually there was a very specific hook that created a brand.”

View more : Bank deposits will decline in 80 years as consumers move their cash inventories

He cited the examples of Betterment making investing accessible to many people who didn’t have access to advisors, SoFi hooking up on student loan refinancing, Robinhood offering free securities trading, and Chime encouraging consumers to create accounts by giving them access. to give up their salary earlier.

Amazon is taking over from Walmart

Over the course of the week, PYMNTS released data showing Amazon has taken the lead over Walmart in retail spending for the first time. While Walmart is still very strong in grocery shopping, it has lagged behind Amazon in many other store categories that offer opportunities for growth and spending.

Read more: Why Amazon is winning the retail battle against Walmart

“People focus on their needs,” Birnbaum said. “I know we are very busy as a family, we need a lot of things for the kids and we don’t have time to go anywhere, and Amazon has a lot of contact with [consumers] just with the ease with which we buy things.

View more : 5 things you need to know about the Amazon-Walmart game

Walmart has expanded its own FinTech presence to penetrate households shopping at their local Supercenters.

“I think in some ways that’s even more interesting than what Apple has done, because when Apple products are loved and so widely owned, we’re talking about essentials,” Birnbaum said. “Anytime you can provide financial services around things that people should have, not want, that’s a different ball game.”

Evolution of mortgages and installment loans

There are also changes in the mortgage market with companies disrupting this value chain and the news that the average interest rate has increased by 5% over 30 years.

“I’m really interested in what this is going to do,” Birnbaum said. “A lot of really interesting PropTech companies have emerged in the last 10 years and I think they will be well positioned.”

Pending news to come from the FinTechs that have been made public, Birnbaum said he will look to see how factors such as the current economic climate and geopolitical factors such as the Russo-Ukrainian war will affect consumer confidence.

“I think some of these companies aren’t necessarily perfect indicators of consumer behavior, but are really interesting, and to see what standard percentages really are,” Birnbaum said. “Whether it’s the installment players — everyone calls it BNPL, I call it installment loans — or some personal loan providers, I think the data will be very interesting to look at.”

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