5 things we heard about payments at Money2020

Picking Copenhagen to host the first edition of Money2020 Europe is a coup for not just the Danish capital, but also the wider Nordics, helping shine a new light on the region’s thriving tech ecosystems: this time through the lens of financial technology. Home to the likes of Klarna, iZettle and Tradshift, the Nordics have already contributed significantly to the growth of the wider European fintech industry. Though around third of the size of Money 2020 Las Vegas, a packed out main hall and an estimated 3,750 attendees thronging to the expo hall and panels points to growing interest in European financial technology from all around the world.

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Here are five of the key things we’ve heard at the show so far, stay tuned for more coverage:

 

1. Klarna has no plans to IPO any time soon

Europe’s second most valuable fintech business, Klarna now has 45m customers and 1,600 employees in Europe and the US. Speaking on the main stage alongside Sequoia Capital partner Mike Moritz (also a backer of Stripe and PayPal), co-founder and CEO Sebastian Semiatkowski said he had no plans to take the company public. Already profitable and a market leader in the Nordics, he said there’s little financial incentive in doing so.
He also said “forget it” when asked whether he was interested in going into China, saying local service Alipay is way too big, too clever and too ambitious. Commenting on what he believes sets the company aside, Moritz said:

“Sebastian and his co-founders built a very distinctive company that were it in the US, would have a much higher profile than it does,” said Moritz speaking during the session. “It is distinctive because it’s been around for more than decade, it’s growing healthily, it’s been profitable for a whole bunch of years and it provides credit to millions of consumers throughout Nordics and greater Europe and now expanding in us and UK. It’s clearly one of top ¾ companies in Europe today.”

 

2. MasterCard’s president international markets bullish on new payments tech

“Why would we be worried about blockchain? We should embrace new technology,” said Ann Cairns, MasterCard’s president of international markets, speaking on stage during day one. She said the firm needs to be “as broad minded as possible” when building for the future.

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The bottom line according to MasterCard is “if you build something easy to use, people will adopt it”. Cairns took time to stress that people strive to have their life eased as much as possible and cited public transit as one major area that can have a profound effect. Cairns cited London’s transport/contactless infrastructure as a perfect example. The amount of journeys made on the TfL network using contactless cards in a single day recently passed the one million mark and as a whole, contactless now represents 25% of all pay-as-you-go transactions on TfL.

 

3. BBVA has 3m clients for its mobile wallet app

During a presentation about its acquisitions and investments, the CEO of Spanish bank BBVA Carlos Torres Vila outlined the deals it’s made (from digital bank Simple to Finland’s Holvi to backing UK challenger bank Atom) that point to it being one of the more progressive banks in the field right now.

This comes as the debate continues over whether wallets from banks and existing financial institutions will do better than those launched by companies like Apple and Samsung. The advantage for banks is that they already have the customers and it then becomes a case of getting them to use their wallet, though that’s easier said than done, it seems BBVA is seeing decent traction with its effort.

 

4. Amazon is diving deeper into payments. Still ‘utterly customer obsessed’.

Meanwhile, Amazon was just one of the companies using the conference as a launch pad for new products, unveiling its new e-commerce partner programme to try and embed itself deeper into the payments space. The move means merchants can embed its Amazon Payments tools into their site to let their customers pay using their Amazon credentials, plus get access to a new suite of tools like account management designed to boost their sales.

When originally launched, the Amazon Payments service was met with skepticism due to the significant size of the competition including Visa and PayPal, but in conversation with PaymentEye, Patrick Gauthier, head of the division, told PaymentEye that the service now has 23 million users in just two years. He said it was all down to ‘trust’. “At the core, we’re really in the trust business”.

Part of that trust, he told PaymentEye, was security. “The online world is full of promise, but also full of new dangers” and protecting the consumer is of the utmost importance.” He said passwords are going to disappear, whilst “the conversation about blockchain is starting to mature”.

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5. VC investment and new company formation is ‘on track’, according to Silicon Valley Bank

In an interview with PaymentEye, head of Payments Strategy and Solutions at Silicon Valley Bank Reetika Grewal, told PaymentEye that the investment and startup landscape is stable.

“Pace of new company formation is still on track. We were saying back in 2015 it felt a little frothy, but since January it’s been a very different environment. There’s still investments being made, there’s just being tempered a little bit. Now it’s a little bit more moderation, but VCs are still investing in great companies, they’re doing a little more investing on the late-stage.”

Reetika also spoke about the importance of company culture in startups and how it all filters down from the top. “If the founders aren’t gelling, if they are not aligned, you start to question how committed they are. When you’re an early stage company, you really have to believe in what you’re doing, because you’re making a lot of sacrifices in order to get there. So who you’re hiring, company culture make a lot of difference.”

As for banks, in response to the question ‘How do banks deal with the appeal of startup culture?’ Reetika said that they “embrace it differently” or they “ignore it”. But that is only because they have to. Banks are large beasts that “have to be run differently. There will be little pockets that try to mimic startups, but a whole bank can’t function that way.”

 

Fun on the side

But it’s not all work and no play. There was also a table tennis area, a scalextric track and massage section! And tonight we’re being treated to a live DJ-set from Rudimental!

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You might also be interested in…

> Our deep-dive into one of the Monday Track Sessions covering top payment trends!

> Our coverage of the rest of Money20/20 Copenhagen event

> Our exclusive interview with Wirecard’s SVP Christian von Hammel-Bonten about what the next great payments frontier is likely to be.

Missed our special edition PAYMENTS {R}EVOLUTION magazine at Money20/20? Download the FREE digital version of  it by clicking on any of the articles below!

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