Digital: Disrupted: Cash May No Longer Be King
September 15, 2023
In this week’s episode, Paul is joined by Rachel Huber for a conversation around the current payments landscape as embedded payments reach mainstream adoption. Rachel shares how the role of legacy providers like traditional banks have evolved over the last few years, and how they can take advantage of technology to compete with new age payment services.
Digital: Disrupted is a weekly podcast sponsored by Rocket Software, in which Paul Muller dives into the unique angles of digital transformation—the human side, the industry specifics, the pros and cons, and the unknown future. Paul asks tech/business experts today’s biggest questions, from “how do you go from disrupted to disruptor?” to “how does this matter to humanity?” Subscribe to gain foresight into what’s coming and insight on how to navigate it.
About This Week’s Guest:
Rachel Huber is the Head of Market Intelligence at Marqeta, a global modern card issuing platform where she leads the competitive strategy function. Previously, she was a Senior Analyst, Payments for Javelin Strategy & Research. Rachel has over a decade of experience in the financial services industry working at companies like Fiserv, U.S. Bank, and Longbow Research.
Listen to the full episode here or check out some highlights below.
Paul Muller: What is the first thought that comes to mind when you think of payments?
Rachel Huber: It's complex. I've been doing this for 10 years and some days I'm still like, do I know what I know? Or I feel like I don't know anything. Even though I've been doing it 10 years and I feel like I can talk somewhat intelligently about it, sometimes it just feels like it is so evolving and so ever changing.
PM: Let's take a step back. There's a lot of jargon in this space. As I was researching for the show, I'm like, what is an embedded payment? How is that different from a regular payment? And who's involved in the whole process of making that work? Because it turns out there's more than just me and the card issuer, there's a whole array of technology. Do you want to maybe talk a little bit about what the landscape of payments looks like?
RH: Yeah, so when we're specifically talking about embedded payments or embedded finance, the player, the person who you as a consumer are doing the interaction with, is not payments, it's not finance. So, it could be Apple, but it could be also my local clothing store and who is involved in that. So, in the instance of my local retailer, they've decided to offer me a card. Now they've become an embedded finance player because I don't shop there because I want a credit card. I shop there because I like their product, they’ve seen an opportunity here. So, they work with someone like a Marqeta to help issue and process that card on the backend. Marqeta has partner sponsor banks that help enable that. So again, the bank is very much playing a part in that ecosystem and they’re enabling it on the backend.
Whereas the key thing here is that that retailer still gets to own the brand, gets to own the experience, and, take advantage of the loyalty and affinity that people have for their product and their brand. And I think that's something that's really changed in the past 10 to 15 years is that people are really seeing the value and taking advantage of that. Well, they love me, hopefully they'll spend more money with me. But no, they can do other things with them. I think it's something that we're seeing in the case of, well you mentioned Apple, I also mentioned Uber, right? They kind of invented invisible payments where I get in the car, I don’t really think about my payment. It just kind of happened in the backend. If you look at some of the innovation they've done with their drivers, actual people driving their cars, they can do payouts for them, they can offer them cards. They've almost made their lives easier by enabling financial products. But again, their main line of business is enabling ride sharing.
PM: I mean I’m in stunned silence because yeah, you've reminded me of every time I get out of a ride sharing platform. Uber's the obvious one, but I keep reaching for my wallet or my phone to go pay for it and I think, oh, hang on, that's already been taken care of. So, I guess that is a wonderful example of, I suppose frictionless at its peak really, isn't it? It's embedded, it's invisible. It's completely transparent to me and it's one less thing I have to worry about.