Last week, we looked at 3 lending trends to watch at Money 20/20: alternative SMB lending, subprime/no credit lending and property lending. This week, we shift our focus to payments.

Today’s Topic: Payments

Payments represents one of the largest segments of fintech in terms of new investments and number of start-ups tackling the thorny issue of paying and getting paid. Payments is a big, broad space with a wide range of products and services. We identified three payments trends to watch at the show:

1. Alt Pay services on the rise – “Alternative payments” means different things to different people. To us, alt payments encompasses any payments outside of the traditional channels (although what really is traditional any more?). For example, there has been plenty of coverage of bitcoin and for a while it seemed a trendy new cryptocurrency was launching every week. Now these alternative payment companies are making a go for more legitimacy.
   
   Companies to watch:
   • Blade Payments makes legacy payment rails interoperable with blockchains and makes crypto-currencies backwards compatible to traditional debit cards. While there is no shortage of bitcoin plays, their tie-in with traditional payment types is particularly interesting.
     
   • FuturePay is really a lending play in payments clothing. They offer a “credit tab” that can be tapped to pay for items, as an alternative to credit cards. If they can get enough retailers onboard, it could be an interesting option.
2. Payments-as-a-Service becomes (even more) commonplace – Rather than integrate with multiple payment services individually, “Payment-as-a-Service” providers usually offer access to multiple payment types through a single interface or gateway. These companies can come in a couple of different flavors – full hosted solutions and developer-friendly solutions (usually via APIs). Stripe is probably the most well-known and successful of the developer “Payments-as-a-Service” companies, with Authorize.net as an example of a popular hosted solution. While companies like these have been around for years, this year we’ll see the ascent of on-tap payments into a truly essential and dominant payments offering, powering everything from mom-and-pop businesses to global enterprises and from online ventures to a variety of apps. While still a complex process, when payment processing is ubiquitous and available quickly and easily on demand, it becomes further commoditized.
   
   Companies to watch:
   • 2Checkout allows companies to accept credit cards, debit cards and PayPal quickly and easily. They specialize in global payments, allowing merchants to accept payments from buyers around the world, in multiple languages and currencies.
     
   • Alpha Payments Cloud leverages one of the big advantages of Payment-as-a-Service solutions, which is the ability to handle multiple transaction types. Rather than having to manage connections to a each type individually, Alpha lets you get it all in one place, and provides access to new payment types as they start to gain critical mass.
     
   • WePay focuses on crowdfunding, marketplaces and SMB platforms, processing the payments for the customers of those platforms. That’s always a difficult sales process, relying on the channel to drive customer adoption and usage, but with a specialized solution built for platforms and lots of funding, WePay is well positioned for even more growth.
     
3. The POS trojan horse– EMV requirements are forcing almost all retailers to swap out their POS platforms to make room for new (in the US at least) chip cards. Many companies are seeing this as an opportunity to make inroads into the retail platform environment with advanced POS tools that incorporate not only a variety of payments types and methods, but other advanced marketing, sales and operational services. The breadth of these offerings again points to the further commoditization of payments, as payment processing continues the path toward becoming a component of larger offerings and not the offering itself.
   
   Companies to watch:
   • Cayan is playing up the pain that the current shift from mag stripe to chip cards is causing by offering a “future-proof” POS platform. They give companies the ability to scale and add payment types as they grow, and as new payment types emerge.
     
   • Vend is a POS platform that is attempting to be a safe alternative for small and mid-size business by working with many different POS hardware options as well as offering a wide variety of services in a single package. Their flexible platform can handle POS, eCommerce, sales operations, loyalty and gift cards, and more.
     
   • OmnyPay as the name implies, helps merchants accept payments across multiple channels, from POS to eCommerce to apps. As with Cayan and Vend, OmnyPay strives to be a single solution for merchants. They also tie their payment processing in with loyalty and promotions programs.
4. BONUS: A mention that deserves its own category – SPARE, is an app out of NYC that allows New Yorkers to round up their restaurant bills to the nearest dollar when you pay, similar to Acorns or Bank of America’s tremendously successful “Keep the Change” savings program. However, instead of that extra change going into a saving or investment account, SPARE lets you donate that money to Food Bank For New York City & City Harvest. We LOVE the angle and how easy it makes it to do some good, and can’t wait for it to come to our city. If you live in NYC, download it now.

That concludes our “Trends for Money 20/20: Payments.” Look for our next installment of Money 20/20 trends coming soon!

Interested in discussing these or any other financial services or marketing topics in person at the conference? Contact me to set up a time. See you there!