When contemplating the future of our global payments ecosystem and what it has in store for the payment facilitator model, international expansion seems to be top of mind.
At PF WORLD 2019, a group of expert panelists moderated by independent consultant AJ Axelrod discussed their vision for the future and what the PF landscape has to expect beyond 2020.
Things are starting to move internationally due to globalization and the feeling is that payments should offer a seamless experience wherever you go. But there are challenges when it comes to globalizing payments. What are the challenges with international expansion?
According to WePay co-founder Rich Aberman, one of the biggest challenges is SaaS companies looking to expand internationally without possessing the capabilities necessary to successfully navigate the payments ecosystem and enable a frictionless experience.
“This certainly creates an opportunity for payments companies that say ‘hey, look, you’re going to partner with us and as you expand globally, payments is not something you’re going to have to figure out. You have one integration to us and we’re going to allow you to sell payments as a core part of your application around the world.’” That’s the vision, he says. “The reality is, we have a long way to go before that’s true universally.”
And what about government regulation when it comes to business expansion and facilitating a global payments experience. As we have seen and reported on for some time now, government regulations are often synonymous with any kind of fintech forward momentum in the payments ecosystem. Is this something to be concerned about when it comes to international expansion?
According to Infinicept CEO and founder Todd Ablowitz, not necessarily. “One of the things you’ve got to remember is governments love their taxes. And what’s a good way to increase the tax base? Get more people into the formal economy and out of the informal economy. So, a really good tax case can be made to bring these small businesses in,” says Ablowitz.
And finally, what about other financial services? Payments is only one piece of the equation when it comes to global expansion. How can these businesses stand to benefit from some of the other offerings?
Aberman gives several relevant examples of platforms that are benefiting from expanding their offerings, including the Uber debit card, Uber auto loan products, Shopify Grow capital for small business and the like. These platforms, he says, “are doing a great job of bringing small businesses into the fold for payments acceptance.” And payment acceptance “is one financial service which very naturally lends itself as an on-ramp to other financial products.”
“I think what we see is the software platforms we partner with, to get distribution for payment acceptance to these small businesses, are increasingly going to become the frontier for a broader range of financial services beyond just payment acceptance,” he said.
And panelist Anthony Hayes from Mastercard’s Global Acceptance and Solutions group agreed. Speaking specifically about Mastercard’s drive to empower companies beyond just payments, he says “it isn’t just a payment-centric approach. It can’t be. And that’s the value, I think, where you talk about PFs and ISVs… they come with solutions that are beyond payments.”
So, it looks like globalization is the trend and payments is just one piece of the pie for an ecosystem that just can’t stop growing.