During this year’s edition of Money 2020 Las Vegas (21 – 24 October), G2A PAY had the chance to catch up with Mark Beresford, Director of Edgar, Dunn & Company, on key event-related topics and future industry developments.
G2A PAY (GP): Throughout the event presentations, there has been a lot of talk/ buzz around industry innovation. In your opinion, what does it stand for?
Mark Beresford (MB): It’s funny that people keep talking about challenger banks as if it were something new. But if we go back in time, we realize that even in 1989, there was already an only-phone bank, First Direct (a spin-off from the then Midland Bank), without any branches. That was innovative. I think that now, the really interesting initiatives come from those digital banks which are turning branches into art galleries (for example), in a move to encourage interaction and ways to socialize.
In general, people still want the social interaction element. They still want to go to shops, try the products, talk to the assistant, accessorize. I think the way they do it and interact with the merchant will actually change. This is where it gets really exciting.
GP: Is cash dead? Or does it still have a place in today’s payments landscape?
MB: Cash is not dead, it will never die. Books never replaced conversations, the radio never replaced books, television never replaced radio and the Internet is not going to replace television. So I think it is just about layers and options.
Consumers can have more options to pay the way they want to pay and cash may be an option. So I don’t think it’s going to go away for a while, unless you go to Sweden or Denmark, where the majority of payments are digital.
In my opinion, we are trying to become digital, but there are some people who actually do not have access to a line of credit or a bank account or simply lack the necessary technology. Let’s take the US, for example and the “diners on wheels”-types of food stores, that you see at music feativals or street parties. For hygiene purposes, they wanted to eradicate cash. But then the businesses would be fined by the local regulator for not accepting cash due to the risk of disintermediating certain segments of society that only deal with cash.
GP: What are some highlights from your discussions with small businesses (like the ones mentioned above)? What challenges do they usually face, when it comes to payments and/ or eCommerce?
MB: It’s funny because speaking of cash earlier, many merchants don’t understand the cost of cash. They accept USD 1,000 and they take it to the bank and for them, it’s still worth USD 1,000. What they don’t realize is that if they (ever) become a big business, they also must take into account the cost of counting cash, or shrinkage (“fingers in the till”), or the fact that they need to transport that cash in a security van which needs insurance, etc. No one actually calculates that. And if they do, it’s probably more expensive than accepting credit cards.
GP: Regulation vs technology. Do you see the former as an impediment or a contributing factor to innovation?
MB: If you’re Visa or MasterCard, regulation could be viewed as a hindrance to innovation. But if you’re not, regulation can become an opportunity to create some new forms of payment, as an alternative to traditional cards (for example). That alternative form of payment could be linked to a bank transfer, not a card. It means merchants could get the money quicker than they would traditionally.
GP: What do think about blockchain and its role in the financial services space?
MB: Blockchain is not the needing edge, but rather bleeding edge. I think it has had some challenges around the legitimacy and this is why regulators were a bit scared. Now regulators seem to be embracing it and realizing it actually has some implications, so they are open to it and finally applying the idea that it could be a benefit to the financial services industry.
Blockchain will still be a hot topic in 5 years’ time, since it still has a long way to go. The way we are going to see it being applied in the real world will be central banking. This is where the expectations are very high, and it will definitely help inter-bank transactions. However, as a consumer, I do not think we will be able to go to Tesco or Walmart and use Bitcoins.
GP: Future industry trends: which ones will dominate the discussions at Money 20/20 two years from now?
MB: Well, in 2 years’ time, they will definitely have to rename it. But I think that we will be talking more or less about the same topics: open banking, access to data, the realities around the GDPR and data portability (and the way this is going to evolve), and especially understanding and appreciating the GDPR implications on the longer term.
About Mark Beresford
Mark Beresford is a Director at Edgar, Dunn & Company (EDC) and has over 20 years of experience in the payments sector. He is responsible for the firm’s practice working with Omnichannel merchants and payment service providers across the globe.
EDC is an independent global payments consultancy. Founded in 1978, the company is widely regarded as a trusted adviser, providing a full range of strategy consulting services, expertise and market insight. EDC clients include payment brands, issuers and acquirers, processors and merchants.