Podcast October 29, 2020

Invisible innovation: Why embedded finance is the future

powered by Sounder

Thinking about innovation, it’s easy to conjure technologies that transformed the world we inhabit.

Cars drive by. Planes fly overhead. Skyscrapers tower above our cities.

But sometimes the most transformative innovations are the ones that go unnoticed. 

And that’s especially true for payments.

In today’s episode, I speak with Alex Reddish, Chief Commercial Officer at Tribe Payments, about how the future of payments will unfold. 

We discuss:

  • Why the best innovations in payments are often invisible
  • The role of partnerships in payments
  • Why we need regulation and education

 

Embedded finance and invisible innovation

When Alex envisions future innovations in the payments space, the one that most excites him will go unseen by everyone: 

Embedded finance. 

And it’s invisibility will be a welcome improvement. 

“The invisibility of payments has become more prevalent. And embedded payments are only going to become more relevant.” — Alex Reddish

As far as innovation goes, embedded finance is more akin to the internet than the freeway. It’s not shiny, but it’s changing the world. 

As financial technology marches into the future, what the customer really wants isn’t some life-changing financial app — they just don’t want to worry about learning new ways to pay.

They just want it to work. 

And as embedded finance becomes more prevalent, customers are becoming more and more accustomed to payments working without them having to think about it. 

This situation is only being compounded as COVID-19 rages and people are forced to find new ways to do the things they’ve always done. 

Even the most ardent Luddites are changing their tune as they get used to new technologies. 

And when the pandemic is over, it’s unlikely they’ll go back to their old ways.

Which means the future of payments is an invisible one. 

The regulatory checks, the associated security, the aggregation of technology are all things that will happen behind the scene. 

And even if they don’t know it’s happening, customers will be glad that they’re kept there.

Partnering up

Another area Alex sees an acceleration of existing trends is partnerships. 

At Tribe, Alex’s decisions are all guided by one thing: empathizing with the end-user. 

By focusing on the end-user’s experience and seeing the product through their eyes, Tribe can ensure they’re ultimately building a better product. 

And that same guiding principle is why Tribe are working with partners — including us here at Currency Cloud. 

“If our partners don’t succeed, the consumer doesn’t succeed.” — Alex Reddish

Ensuring that your innovations are invisible to the end-user means making their experience simple. 

But delivering a simple experience can get complex quickly. 

To solve this, more and more companies are looking to partnerships to give the customer a seamless experience with the best technologies available. 

That’s why partnerships are on the rise in the payments space.

As customers demand more seamless integration from their payments, more complexity is sure to follow. Which means partnerships are only going to become more valuable in the future. 

And that complexity brings challenges — especially when it comes to regulation. 

Regulation and education

One aspect of the future that particularly excites Alex is the coming advances in machine learning. 

And, he’s quick to point out, he doesn’t mean the buzzword used by many to bolster their valuations. 

He anticipates AI will change the world. It will allow other latent technologies, like the internet of things, to take off too — and, of course, your IoT fridge will nag you about your eating habits. 

Yet, if you’ve seen The Social Dilemma, you also know the double-edged sword inherent to machine learning. 

Your flashy futuristic fridge might do more than nag — it might start altering your behavior.

That’s one reason Alex welcomes regulation for the payments industry.

“It’s up to the payments industry to regulate and educate the unaware of the potential downfalls of innovation.” — Alex Reddish

We have a responsibility to ensure that the innovation we provide consumers truly helps them live better lives. 

And regulation is one way to accomplish this. 

But for Alex, who welcomes regulation for the industry, responsibility doesn’t just stop where at the regulatory line. 

Organizations in the payments sector also need to do a better job of educating customers about the potential dangers with any innovation they are introducing into the world.

Innovation may be a double-edged sword, but the most important step everyone should take to avoid getting cut is awareness.  

An educated customer can make better decisions about what they purchase and, ultimately, that’s good for all of us. 

To ensure that you never miss an episode of Payments Innovation, subscribe on Apple Podcasts, Spotify, or here and don’t forget to check out our YouTube!

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