Why Universal ‘Pay Anybody’ Is Coming And Will Change Everything
December 9, 2022
Ubiquity and choice are the digital promised land. How we get there from here will be a matter of securely opening the payments ecosystem to both while simplifying the field of players that’s gotten too complex.
That, at least, is the opinion of Ingo Money CEO Drew Edwards. Speaking with PYMNTS’ Karen Webster for our “Executive Insight Series: The Next Three Years,” Edwards described the current difficulties with money mobility and his three-year vision for how barriers must come down.
Asked to imagine the world of payments in 2025, Edwards told Webster, “It’s my opinion that in the world of P2P and B2P, the lines are going to blur and it will all be about pay anyone and let them choose how they want to get paid.”
Rather than a constellation of different programs, he described moving “from the land of closed-looped apps doing P2P and banks doing their own P2P to some sort of open network like Ingo has built where a corporate says, ‘I need to pay all these people, pay them for me,’ and you don’t force all those people into a new app or a new engagement.”
Noting the many different preferences of consumers and businesses, he said, “We live in the land of rails. There are so many different paths to bank accounts, etc. My big prediction for the next three years is what we know today as P2P and corporate disbursements all blend into a universal pay anybody [capability], and they can decide how to get paid in any way.”
What makes this vision pragmatic and appealing is the fact that these rails and relationships already exist and with gateways like Ingo’s the notion of interoperability is already a reality.
“The beauty of it is we already do this today for insurance companies, for example, and a lot of other verticals,” he said. If you think about that use case, it’s one entity trying to pay another entity safely, faster, and instantly if possible. My vision is that’s how P2P should work.”
Open to New Possibilities
Webster pointed out the security issues such an open-loop payments system could create, but Edwards again believes we already have the software and systems to manage that risk.
“In my world, you need all of the data, especially the bad actor data, available in the same ecosystem. If it’s part of the P2P network, which is how we envision it, and it does pull in data, you’ve got to make sure and keep track of not only preferences but behaviors and attributes so that you can safely do this at scale. We’ve been doing this on checks for a decade. I still believe data and a centralized payee registry, for example, that’s keeping track of all that, solves that problem.”
While Webster wondered if this kind of change is achievable in a three-year window, Edwards replied that “it’s one of the most frequent inbound inquiries we get,” hinting at demand.
Nodding to community banks seeking an alternative to Zelle and incumbent FinTechs with semi-closed loop platforms, he said, “When I say semi, I mean the closed loop P2P players all allow you to then move the money somewhere else. But that’s kind of like a layover on an airline, and I’m used to living in Atlanta where we don’t do layovers. We go right where we want to go. I believe the demand is chirping out there. There are people saying there’s got to be a better way.”
For all of their valuable use cases, he said some of the predominant tools that could enable the open future of banking and payments aren’t necessarily built to enable an open ecosystem.
“Remember, all the FinTechs are pretty much blocked out of Zelle. There’s nothing wrong with Zelle, by the way. I’m not anti-Zelle. We remain Switzerland here, but it’s not a solution for all,” he said, adding, “I’m a heavy user of PayPal and Venmo personally, but they are also not a solution for all.”
This is illustrated in his own banking statement, which he describes as a “mess” of ACH debits coming from sources like PayPal, Venmo, crypto and P2P services.
The response to this tangle of rails and reporting is: “Here’s all my P2P transactions and the people they were sent to and how much I sent them. Through our webhooks, our partners could update the transaction history with details on how the funds were claimed. It wouldn’t be the mess it is today. It’s true ubiquity in choice. It’s already happening in corporate payments, and it’s going to bleed over into personal payments.”
How P2P Should Be
The issue with the world of 2025 Edwards lays out for pay anyone, anywhere, any way they want is that not everyone on the sender side is part of that connected ecosystem But the demand we are seeing speaks loudly to the right trend. Account issuers are beginning to recognize the problem.
“The rails are there, the accounts are there, we’ve got a consumer base that has moved from just having a BofA account to having a Coinbase account, a RobinHood account, a Chime account, a PayPal and Venmo account. The only piece missing, in my opinion, is their making it available to their customer,” he said.
“You want to pay Karen? Don’t worry about how she gets it. Just give us her contact information, tell us how much you want to pay her, and let her know to look for a message. We’ll get it done and she can choose how. That’s the magic of the way P2P should be.”
In so doing, it turns P2P from a cost center into a potential revenue stream for FinTechs and financial institutions. “All of the P2P guys are trying to monetize it by getting [consumers] to leave money there and turn it into a commerce experience where they have interchange revenue. But there are other ways to monetize it in this open environment,” he said.
“If my maid says to send it to PayPal and that’s a layover for her and she wants it at Wells Fargo, then she’s likely to pay a fee to get it over fast to Wells Fargo,” he said. “By doing this, we can enable that monetization on the sender side where the maid decides where she really wants the money and sometimes that choice comes with a fee.”
CEO at Ingo Money
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