How can payment innovations help you attract more investors?

One thing to keep in mind is that, payment innovation is not about building the same old, using a new technology. Like for example, payment systems atop blockchain ledgers. It really solves no purpose of it's simply a mean for replacing the existing system. Which btw has a lower turnaround time, better success rates and higher transaction processing capabilities, especially in India with UPI. What matters is identifying a core problem, and then considering using new tech to solve for it. For example, cross border payments. And using blockchain, to remove the centralised power that SWIFT holds for cross border transactions.

Payment innovations are typically viewed as simply adding new payment methods, but rarely do people talk about payment innovation around optimization. Too many brands simply add a number of payment methods then never look at how different layouts, response codes, or offers can affect your conversion. As an example, a simple look at your acquiring bank can net you an additional 3% in conversion, and I'm talking top of funnel! Forget just adding payment methods, it's time to look deeper.

Payment innovations represent both a snapshot of current technological progress and a forecast of future trends. For investors, staying informed about advancements in this area is crucial for identifying high-growth opportunities, hedging against market disruptions, and making strategic decisions that align with the trajectory of the global economy.

Payments run the world, but most people don't know it. Investors want opportunities that provide 100x returns, and what better way than a technology that can predict wars? When analyzing previous wars, payment networks detected that a war was coming, as a large amount of cash was being withdrawn in Iraq before the Gulf War began.

When consulting for retailers and brands, I find that the best way to adopt new payment technologies is to simply reach out to a few vendors and ask them to demo what they can do. Sounds simple, but this simple act will save you hundreds of hours of research and will give you access to subject matter experts at no cost to you!

Payments are complicated, and many people don't truly understand the number of players and intricacies in every nook and cranny of the industry. To communicate a payment strategy, it's important to help people understand the basics of how payments work, and explain, with data, how different payment strategies affect your business with real-world examples. Simply add and remove a payment method in a split test to see how it affects your conversion. Imagine what happens when you really start to get into the weeds!

Investors likely won't care about your payment innovations unless... well, you are a payments startup! Payments is unique in comparison to most other functions, where it is often overlooked, but rarely appreciated. Ironically, without payments your business cannot run, yet it's only truly looked at once you hit $1B+ in revenue!

Payment margin is increasingly thinner as it becomes commoditized by the recent influx of providers that try to upend each other by engaging in price wars. It is now a volume game. Investors are likely to only show interest if your payment innovations can help your payment solutions scale higher volume, lower cost, and/or outreach to new markets. Educate investors on the positive impact of these innovations in generating more revenue. Demonstrate initial pilot success to get buy-in and funding.

Payment innovations, akin to other innovations that are rolled out to the market whether via A/B testing, pilot, or full-fledged, should be managed as part Go-To-Market. Ensure there are sufficient and relevant data points you can collect to measure the performance of the innovations and how they tracked against defined targets which should in turn contribute to the north-star. In addition, survey the consumers and synthesize their feedback. These would collectively determine how relevant the payment innovations are, and the next course of action: iterate, reiterate, pivot, deprioritize or kill.

One of the most notable innovations in payments is the development of decentralized finance (DeFi). DeFi represents a shift from traditional centralized financial systems to peer-to-peer finance enabled by decentralized technologies. These platforms offer a variety of financial services, including lending, borrowing, and earning interest, all without the need for a traditional financial intermediary like a bank. Take asset ownership for example: Traditional Lending: In some cases, especially mortgages or auto loans, the asset is part of the collateral and can be repossessed if the borrower defaults. Crypto Lending: The borrower retains ownership of their crypto assets when used as collateral, provided they maintain the loan's terms.

Payment involves monetary flow and is highly regulated by most central banks/regulators. You should ensure these payment innovations are always designed to be compliant with regulations, secure and robust, and rigorously tested before rollout. The least you want is to break your customers' trust of your core payment products, and tarnish the reputation of your company, thereby hurting future investments.