Wednesday, 21 October 2020

Fintech companies at their core are about innovation and staying relevant. How are later stage startups and other fintech players adapting during the pandemic to this time of unprecedented change? 

One innovation is to increase their commitment to digital, real-time and contactless payments. Paypal announced in May that it was rolling out QR code payments to enable in-person contactless purchases. ACI Worldwide, a global payments services company, also announced in May that it was upgrading its UP Immediate Payments tool “to address the increased demand for new real-time and digital payments during and beyond the pandemic”. This new functionality is designed to extend real-time payments to “additional digital channels” for billers, customers and its merchants. 

“Real-time payments are set to experience explosive growth worldwide, with the global pandemic highlighting the need for new and innovative digital payment options more than ever before,” Craig Ramsey, general manager and head of real-time payments at ACI Worldwide, said in the company’s press release. “The new capabilities within our UP Immediate Payments solution will enable financial institutions to be real-time ready, while at the same time create new value-added services for consumers and financial institutions.”

Responding to growing demand

Some payment companies have posted strong results during the pandemic as demand for digital payments has increased. PayPal announced revenue of $5.26 billion in the second quarter of 2020, a 17% increase this year to date, compared to the same period last year. “In the midst of the COVID-19 pandemic, digital payments have become more important and essential than ever. Our record performance in the second quarter — our strongest quarter ever — reaffirms the relevance of PayPal in the unfolding digital future,” CEO Dan Schulman said in the company’s second quarter earnings release. 

Square has also seen strong results, given their rollout of contactless payments, which was reported in TechCruch. The company reported $1.92 billion in net revenue for the second quarter of 2020, a 64% increase year-over-year, with gross profit for its peer-to-peer Cash App rising 167% year-over-year to $281 million. However, Amrita Ahuja, Square’s CFO, admitted some reasons for caution, given uncertainty over the future of government stimulus checks, which have been helping to drive increased activity.

The new normal

Whatever the financial ramifications of the pandemic might be, the move to contactless payments is smart. The World Health Organization is officially pushing for contactless payments, according to the UK’s Telegraph newspaper. Forbes reports that the adoption of contactless payments has been expedited by the pandemic; whether it be a digital wallet on users’ phones, smart watches or using an NFC-enabled card.

BBVA Open Platform has been making moving money as digital and frictionless as possible since its official launch in 2018 and we’re continuing to add new services. Our near real-time payments functionality rolled out in July 2020. The new API service, integrated with Visa Direct, allows enterprises or individuals to transfer money in near real-time by making push and pull payments to and from debit cards and prepaid cards. 

Our Move Money API provides a single, unified service that supports numerous payment types including ACH, digital bill pay and real-time payments through a single, easy-to-implement endpoint. Transferring money with BBVA Open Platform can now be done easily from a mobile device.

At BBVA Open Platform, we’re committed to helping companies integrate digital and real-time payments into their own applications to meet the continuing challenges of the pandemic. If you would like to find out more about how we can help your business, contact us. 

 

The Open Platform team

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