Day 2 of Money 20/20 USA 2024: Achieving sustainable growth through strategic partnerships

With Day 2 of #Money2020USA successfully concluded, here is the analysis of the main trends and highlights straight from our team in Las Vegas.

Latin America remains a much-talked-about subject, from the business opportunities surrounding emerging markets to the phenomenal benchmark about instant and mobile payments. However, from the content sessions we are attending, we would say the number one keyword at Money 20/20 is: strategic partnerships. As the payment landscape evolves and both customer needs and merchant demands become more and more refined, aligning with the right partners to expand product capabilities without straying from the core focus proves ever more fundamental for susteinable growth.

To understand more about what was discussed today about these and other key trends, what industry experts foresee for the future of the world of payments, and more, keep reading!

The future of money

The world of money is ever more dynamic and keeps evolving fast — as someone pointed out at Money 20/20 USA, no one who attended the 2019 edition in October of that year could image that a global pandemic was just a few months away. Meanwhile, 2030 is “just” 5 years and 2 months away; a lot can happen during that time, and that time goes by very fast. Things can change in the blink of an eye, so how can payment companies create future-proof strategies?

Around the globe, 82% of merchants claim they believe payment needs are growing more complex, while 61% believe payments have become very strategic, effectively acting as a business differential. With a lot of what used to beseen as differentials now being “the standard” — for example, same-day shipping or subscription-based online education platforms —, optimizing and expanding the payment experience is fundamental so as merchants’ efforts toward better, more innovative solutions and products are actually being purchased, and purchased again and again, by the customers. After all, as we mentioned yesterday, not being able to pay with their preferred payment method is customers’ number one reason to abandon a purchase.

Today’s and tomorrow’s innovative shopping experiences all require ambitious, robust, agile payment strategies to support them. In both sides of the business plan, everything you do should be basedaround three pillars: customer-centricity; robust, reliable risk management; and regulatory compliance, which must involve being able to adapt to new regulation and also understanding regulatory requirements when going abroad.

At the end of the day, the core of the business of money in the future will worry about the same things it does today: understanding and providing value to the customer (both the direct client and their own end-users), working with the agility and robustness required to properly and fastly adapt to changes, and understanding the strategic role payments play in business growth, and applying strong anti-risk analysis to keep it as secure as possible.

Mobile payments are here to stay

This is nothing Brazil doesn’t already know: mobile payments are here to stay, and contactless payments are a preference of more and more customers worldwide. With tech-savvy Gen Alphas being around 14-15 years old now, and on the cusp of joining the digital economy as young professionals, the payments scenario should just keep getting more and more agile, UX-focused, and mobile.

With instant payments rising around the globe — especially in Latin America, where they are trying to follow Pix’s example as best as possible (in fact, Brazil’s Central Bank is working with Colombia to design their own RTP) — and e-wallets striving to become not only a way to pay but an actual digital version of a person’s wallet (including proof of identity, driver’s license, etc.) —, the little device we carry with us at all times becomes an extension of our payment capabilities and habits.

For that to be truly the standard, though, technology must remain being seen as a key enabler for financial inclusion: mobile, contactless payments require access to high speed internet, to reliable smartphones… In Latin America, the scenario is of a part of the population with access to the best and the latest of payments innovation, and of another part with no access to mobile internet or to smartphones that support financial apps’ latest versions. Navigating that challenging context, and striving to bridge the gap between these two seemingly polar opposite environments, is highly important.

Anti-risk strategies for the era of AI

As payment companies evolve and AI is established as an important partner both for internal and external processes, the challenge is that fraudsters also have access to ever-evolving AI tools, making their fraud attempts as sophisticated as the best ant-risk tech can detect. So besides thinking of this or that technology or feature to apply to your anti-risk measurements, it’s also fundamental to build it in a way that makes it easy to adapt to the changing needs of the world of payments. Investing in constant improvements and modernizations for risk management is key.

And risk management must be seen as a potential tool for growth, not just a hindrance. After all, we know very well the challenge that lies in balancing “keeping the bad guys out while allowing the good guys in”. Anti-fraud can be too full of friction, otherwise your reliable customers will give up, but it can’t also be completely frictionless, otherwise the fraudsters will quickly understand it and the reliable customers will not trust you with the financial data — something that should be kept in mind by fintechs, especially with 81% of Americans believing corporations are using their data in a way they are not comfortable with.

This is precisely an area where Artificial Intelligence has the potential to benefit the payments industry the most. With fraudsters now applying AI to find and target companies’ vulnerabilities, businesses should do that too, identifying their own vulnerabilities before “the bad guys”. More and more people are joining the digital economy; in the last 5 years, 1 billion customers became e-shoppers. That will continue, and much faster: by 2030, we will definitely have more than 1 billion new e-commerce customers on board. As the digital environment grows, anti-risk measures assume an ever-more strategic role.

Achievement sustainable growth with the right partners

With so many new challenges and opportunities for payment businesses to tackle, the general understanding in Vegas is that partnerships are absolutely key for payment companies to achieve everything they strive to.

Strategic partnerships can unlock new markets, new verticals, new sources of revenue for both sides of the partnership. As the money industry evolves, expertise becomes a major differential: for example, here at PagSeguro, we are experts in Latin America, with all that entails — offering local payment methods and understanding payment opportunities and trends, of course, but also understanding the differences and similarities between each Latam country, what works best where, how the regulation works and how it is changing in each country, rising and soon-to-be rising verticals, and which are the best local partners for our needs and our merchant’s needs and their end-users needs.

Thus, if you plan on expanding your product offering or your coverage, understanding what fits into your core business and your expertise, and what would be best to use external partners to get, is essential to grow a payment business sucessfully.

Customer-centricity as the main driver for business decisions

Artificial Intelligence, partnerships, anti-risk strategies… At the end of the day, It all comes down to: keeping what's best for the customer and what the customer needs (and wants) at the center of business decisions.

As B2B payment providers, we face the challenge of customer-centricity meaning not only our direct clients, but also their end-users. Both you and your client must strive together to build payment processes that fit into end-users demands and preferences, thus keeping both end-users and merchants happy and making the most of the product or solution. The payment strategy is the path through which your clients’ clients can access what they offer, and it's our role to make it an agile, varied, secure, and quick path.

Today is the final day of Money 20/20 USA 2024, so don’t miss your chance to come grab a coffee and have a chat with our team about cross-border payments, payments innovation in Latin America, anti-risk analysis, and why we are the best partner for you to expand into Latam. Stop by our booth #11109 or click below:

➡️ Schedule a meeting with our team at Money 20/20 USA (or look up PagSeguro at the Money Connect app!)

And tune in tomorrow for the best and the latest from the event here at #PagNews.