Transcription:
Daniel Wolf: (
All right. I know we all have flights and lunch plans and everything, so I wanna jump right in and I also want to reverse the script on this final session. Normally we would wait till the end to do Q and a. I would like to ask each of the panelists to introduce themselves and talk about their favorite takeaway. Then if anybody has questions, comments, feedback, bring it up, we'll have the mic circulating and you don't have to wait until the very end when there's only two minutes left on the clock and your flight is about to leave without you. So, let's jump right in. Would each of you like to introduce yourselves what your background is in the payments industry and what is the one thing that you are going to tell your coworkers when you get back to the office after this event and what is your big takeaway from this week? Go ahead, Ginger. You're sitting closest so that you are first.
Ginger Schmeltzer: (
I have got all told to start.
Daniel Wolf: (
Yeah.
Ginger Schmeltzer: (
I am Ginger Schmeltzer, I am newly with MasterCard most recently was with IT group, a research firm. I've also been a banker. I've been a Pfizer, I've been a consultant. I've been coming to banking payments conferences for a little over two decades. Now I know I don't look it but I've been around that long. The theme of the conference seems to be, there's a lot of buy now pay later, a lot of crypto, a lot of how card is disappearing but still relevant. You know what I was thinking about this morning though, Daniel is that in all the years I've been coming, such a theme was mobile payments, mobile wallets, mobile everything and I feel like it barely got mentioned this week. That's because it just a thing now, it's arrived. It's something we all kind of take for granted. I thought that was really interesting that it no longer is a big topic of how do we leverage this and what do we do with it? It just is part of what we're doing every day with apple pay and the various wallets. That's what I'm taking away is that we've moved beyond that as an issue and become more of how are we gonna leverage us just into our daily business.
Daniel Wolf: (
We've made it to the future.
Ginger Schmeltzer: (
We did.
Daniel Wolf: (
Wow. I didn't even notice. Right, Jon you're up.
Jon Prendergast: (
Boring, old digital wallets. Jon Prendergast, TD bank. I run US payment strategy for TD. First I wanted to congratulate everybody for standing through the whole conference, which is pretty impressive. I took away was when we talked about the theme for this conference was it's pivotal time. What I heard for the last couple of days just reaffirm that, it's pivotal time, but there's multiple pivots. There's just such change happening. Payments used to be boring. It was nice when it was boring a little bit.
Daniel Wolf: (
It was never boring.
Jon Prendergast: (
It was less exciting. You can say payments is the new digital.
Ginger Schmeltzer: (
It's less exciting.
Jon Prendergast: (
It's touching everything. For me, it was just how hard it is to be a payments person at a bank, especially when you have so many different demands from customers, from people coming in and it just highlighted it, all the different options that a bank has now, especially a bank but even non-bank. That makes it difficult to make the right call and just thinking about what you need to do as a bank to be ready for the pivot what's gonna change because nobody really knows.
Daniel Wolf: (
Brian.
Brian Tate: (
Good morning. Is it still a morning? Brian Tate, I am the CEO of the innovative payments association. We represent a number of payment companies and financial institutions in Washington, DC. We do a lot of regulatory work and advocacy work here. Some of our clients are in the room today. The conference has been fantastic and my panelists have hit the head right on the nail. The nail right on the head there, I should say something like that. My favorite panel or discussion was the one that just took place on financial inclusion with Walmart. It was fantastic at how they talk about the steps and the care and the focus they put into making sure that they've created this holistic ecosystem for their clients. It's not just financial services, but they put everything together to keep them in their ecosystem, keep working with them and help them through their financial needs. I've learned a lot here and my theme is potential that we are living in a pivotal time in that there are changes in the marketplace and changes in the regulatory sphere. They're all coming together and I would echo Ginger's comments that it's great, that we've moved beyond wallets. If this were pre COVID, that would be the main focus. Now we're talking about how to make all of these things work for your business and your customers.
Ginger Schmeltzer: (
Can I add one more thing? Sorry.
Daniel Wolf: (
Absolutely. Don't apologize.
Ginger Schmeltzer: (
Okay. I won't apologize. One other theme that came through to me and I think this last session was fantastic. I really enjoyed that. I think we lose sight in all our work towards digitizing and making everything more convenient, more available, we lose sight of the folks that can't access those capabilities but a broader theme really on that is how much more complex it is to be a consumer these days. We've created all these more convenient ways to pay. But, if you think about the average consumer, who's trying to manage several checking accounts, several credit cards that why not pay later account or six, a crypto, if they're doing it right. Venmo, PayPal, Cash App. There are so many different places that we are storing funds, managing payments. How do you want me to pay you today? A thing I think for consumer it's very complex and overwhelming and the whole quest for convenience has landed us in a place where it's actually less convenient for some consumers to actually manage their money and effectively manage their payment capabilities.
Daniel Wolf: (
On the subject of inclusion and the role of cash and cashless payments, what struck me not so much about this event, just about the entirety of what happened during the pandemic is I remember distinctly that before that we were covering a lot of the trend of cashless or even cashier less retail. There was concern that would be something that would exclude people who preferred cash or were unbanked. Then all of a sudden cash became toxic. All of a sudden there was a lot more interest in that. I don't know, maybe, one of you can comment on this, how do you strike that balance, because there's definitely more interest and comfort in a digital payment system but does it still exclude people who just don't want to be a part of it? Can a retailer go all the way cashless or
Jon Prendergast: (
I have a question about that because if you look at any note from the federal reserve, it says this instrument is legal tender for all debts, public and private. It literally says that on the dollar, on the bills. I forget who said it in doing these but they said, Delta doesn't take cash anymore. I just wanna fly Delta order a gin and tonic, flying home or something and when they ask for a card, hand them a $10 bill and they say, we don't accept cash and point to that language, just to be a smart I will look, I guess.
Daniel Wolf: (
I'm sure they'll appreciate that.
Jon Prendergast: (
But the question is, if the government is putting out legal documents, which a bill is and it has that data or that information, that language on it, what right do somebody have not to take cash? I'm waiting for the lawsuit.
Daniel Wolf: (
I flew United and they say in their app in the check-in that I should enroll my card beforehand, they won't even take my plastic card. They have to have it on file or use PayPal. So that's even, I guess, excluding the plastic fanatics.
Jon Prendergast: (
Not that I'm a cash fanatic, I'm just saying there's a dis there's a disparate between what the government's actually saying.
Daniel Wolf: (
Yeah.
Jon Prendergast: (
The federal reserve and what's happening in commerce. Not that, that's the first time.
Ginger Schmeltzer: (
I think it's a good point. I think at the end of the day though, a business, a merchant has the option to choose to accept whichever payment option they want to, if they choose not to accept cash, they are gonna exclude some folks and they're gonna lose some sales, right? And they may be making that choice because it's more convenient. It's less expensive to manage. There's less shrinkage, whatever the case may be but they are gonna lose your gin and tonic sale. Sorry about that.
Daniel Wolf: (
They made it just for you.
Ginger Schmeltzer: (
Maybe they'll just give it to you. You got to wait for that but at the end of the day, I think that the merchants it's a risk, they take, right? Lots of merchants don't take AMX for instance, cause it's too expensive or whatever their rationale is, or they don't accept Venmo or whatever. They may lose some sales but they may balance out for them on the back end and that's a risk they have to take.
Brian Tate: (
I would agree. I mean, I think cash is still king in my mind. And especially for mom and pop merchants, right? For purchases under $5, if you look at all the statistics, people are still using cash and there's obviously a income threshold that gets cut off there of how much cash they're carrying in their wallet. I do agree that we're all up here, we all support electronic payments but to the extent that you decide to exclude one segment or another, that's a business decision you'll have to make. But I do think cash is very important. I think it's not going anywhere even with crypto and everything else on the marketplace. I do think if you're not accepting it, you're excluding a population that you want to do commerce with. You want in the system. If you cut them off, because there are a lot of different ways to cut people off. But if you exclude say, Hey, you can't use cash, again you're taking something off the table that might encourage me to get into the banking system and I think that's to the benefit of all of us.
Daniel Wolf: (
Okay. So I did promise to open up it up to the floor early and that was 10 minutes ago. So, I better make good on that promise. Is there anybody who wanted to weigh in, not even with a question with a comment, here we go.
Audience 1: (
So, John, you mentioned about all of these different topics that we have discussed this week, right? There's crypto there's digital wallets. There's BNPL buy now pay later. How are you and all of you making investments around, how are you making prioritization decisions at the bank at MasterCard? Where do you want to invest in terms of there is a fixed part of money, the regulators are not going away. So you still have to put an investment towards that. How do you focus on what's the next thing that you should go after?
Jon Prendergast: (
It's an incredibly important question. It's a great question. I would say the first and first and foremost, does it solve a customer problem? So is there a beneficial customer impact? Are we putting resource sources towards things that are more platform that can have impacts in multiple lines of businesses and things like that? That's the decision waterfall that I look at, what I'm trying not to do is to chase shiny objects with very narrow bands of impact. Because ultimately even if it comes to fruition, I'm having less impact. And ultimately I can't iterate that to the benefit somewhere else.
Ginger Schmeltzer: (
I can't speak directly from MasterCard but I will say that generally speaking, I think the responsibility of any payments provider is to try to provide as much payment capability as consumers and businesses want and need. So if there's a demand for crypto or buy now pay later or QR codes or a new kind of card, I think it's the responsibility of a payment provider to investigate how, and if they should provide that and support it. It may mean that you have a broad range of payment capabilities that you support. But I think that, at the end of the day, our job is to make sure that consumers can spend their money when and where and how they want to. That means that there's a lot of different capabilities we need to add on to our portfolio.
Daniel Wolf: (
Do you wanna answer this one?
Brian Tate: (
Sure. So I'm in a unique position where we do provide conversations or recommendations in consulting to some of our clients and members. The most successful ones are the ones with the plan and stick to it. What are the set priorities? And if buy now pay later or EWA or some other product comes up, if it's not core to what you're doing. You can think about it but I wouldn't put a lot of investment in there too many times, as Jon said, people follow the shiny object because buy now pay later is everywhere or it's the cool thing to do. They shift their emphasis and I think from my point of view, when we talk to companies, we asked them what their priorities are and encourage them to, again, what, where are you gonna be next year and five years from now, instead of just chasing kind of the easy revenue that's on the table right now.
Jon Prendergast: (
I agree with Brian's point that said, you need to be ready to pivot when you're, if you're wrong and we're all gonna be wrong.
Brian Tate: (
Yes.
Jon Prendergast: (
Right. You need to be able to say, I don't believe that I'm sticking with my plan but you need to be honest with yourself when the plan's not working and say, Hey, something else is really where I need to move and be agile and ready to pivot to that.
Brian Tate: (
But I also think, plan B should be just as important as plan A
Jon Prendergast: (
And have that plan B ready?
Brian Tate: (
Yeah. I always tell my kids everyone's got a plan until they get punched in the mouth. That was Mike Tyson.
Jon Prendergast: (
That's Mike Tyson.
Daniel Wolf: (
I was gonna say this conference went very differently for you than for me. That's your takeaway. Do we have another question or comment or oh John behind you.
Audience 2: (
I had the privilege of going to the IPA conference last month. The notable difference, in a lot of very similar topics but there was no discussion I heard here around cannabis and there was a lot of discussion around cannabis at IPA was just curious if you have thoughts about that and the future impact to the payment system.
Daniel Wolf: (
So, unless anybody wants to,
Brian Tate: (
I could weigh in just as an independent observer. I think cannabis is, I think we're at the edge, we're at the precipice there. I'm not sure if Congress is ready to take that leap. I do, there's been a lot of discussion about legislation being passed this year before the end of the session. It's always tough for a election year, politics plays into what issues can come up and get passed. And for many politicians on both sides of the aisle, do you really want to pass a cannabis bill right before an election. Whether a primary or final and have your opponent used that against you. That being said, there's 30 plus states that have passed cannabis and they're collecting tax revenue right now. It needs to come off the class one narcotics list before it can really be implemented by the networks and the large financial institutions who worry about the feds knocking on their door but we're inching our way there. I would guess if I were to just pull the tea leaves together, I'd say in the next five years,
Daniel Wolf: (
Tea leaves as suppose to? Sorry, go ahead.
Brian Tate: (
Tea leaves together. I would say within the next five years you'll probably see some movement but it's a very difficult decision for a politician. Who's constantly have to run for reelection to pull that trigger.
Daniel Wolf: (
And I would add that, in Canada, when cannabis became legal nationwide, visa, MasterCard, American express were there on day one and in the US where it is not consistent nationwide, you have all these different companies coming in. It just became legal in New Jersey where I live, a couple weeks ago and the businesses, I think 13 are actually open for recreational cannabis. Medical, I believe was already legal and the 13 that sell recreational, accept cash or they accept a digital wallet thing that you have to pre enroll with. Over the years we've been covering like, what are the alternatives? How can you actually like simulate the experience of paying with a card? So there's the concept of the cashless ATM that looks like a point of sale device where you're actually making a cash withdrawal. You just don't get the cash, you get the cannabis and some change. We spoke to some folks and of course having an ATM on site, solves all problems. But we spoke to some of the shops that were trying some of these more experimental things and people still just understand cash and if you are putting a device on your counter, you have to justify that real estate, however, small it may be. So we're still, I guess, in that holding pattern. But I do take that feedback that this is something we could talk endlessly about and then all of a sudden, one day it will be legal nationwide. The discussion will end because everybody will be fearless about swooping it. Any other thoughts on before?
Jon Prendergast: (
I just think it's gonna be legal in the next few years. So we're past that. Culturally, we seem to have hit the tipping point 30 states. So this is really, to me, a non-issue that's gonna take care itself. And spending a lot of time at a conference talking about it honestly seems like we're looking at yesterday's problems and not tomorrows.
Daniel Wolf: (
Like mobile payments.
Jon Prendergast: (
Yeah.
Daniel Wolf: (
One thing I wanted to make sure that people were aware of, is before the main keynotes begin, we do have a half day women in payments, symposium, I think we call it. Which features as many of the honorees of that year's women in payments feature that are able to attend. I really wanna make sure that people are aware of it because even though it's a smaller half day sort of thing, I take away so much from it, in conversations that are unlike many of the conversations that we'll have here in the main room. That are just like unlike conversations that I have day to day in the office. Ginger here is a pass honoree. She is absolutely sick of me telling this story by the now, but there was something where I was just in the audience and she had said something about management, about how to encourage an employee who wants to move on to, a different job and may ask you to be a reference, currently works for you and want you to be the reference. I was still new as a manager and I thought that is my nightmare scenario. I don't wanna lose somebody that I would actually think so highly of that I would recommend that's just like paradox. And you said something to the effect of, well, you would absolutely, promote them and encourage them to pursue that new job because someday they may wind up hiring you. So, it changed my perspective and made me think as a manager that I should be encouraging people no matter what they want. I've held that with me. There have been a number of conversations happening just at this event about people here who are big names on the slides that you see who had very, very different career paths and were able to talk about the mentors that made a difference along the way, how they pay it forward, especially with the challenges of just doing any kind of mentorship in this, semi virtual world, that we've all landed in how to handle the question of how to promote people and make them visible in this hybrid environment. I was just wondering on that note, we're all still feeling out what the new norm, I hate saying the new normal nothing's ever normal but what the new environment is and I don't know if there were any discussions that anyone here was a part of about just, are you back to the office? Are you still virtual? Are you based in New York and half your staff is now in Maine and what do you do about that? Any thoughts on that particular topic?
Jon Prendergast: (
Yeah. I'll start. So, a lot of discussion, ironically, our first day at TD in New Jersey was Monday. And so I wasn't able to be there cause I was here. Which stuck because everybody's finally getting back together. But we are gonna be hybrid for a couple of reasons. People have grown to expect the flexibility but I think there's a more practical reason. One of my teammates came to me and said, Hey, listen, Jon, I wanna spend more time at home because I'm just more efficient, more productive. I'm gonna get more done. I'm gonna be able, I'm gonna be better for the team. And, I said to him, he's a fairly young guy. And I said, I think that's fine. You do what you do, but understand there are moments that matter whether it's a brainstorming session, where being in person is important, whether it's presenting to the head of product about something where some strategy we're bringing forward or other things, where being in person has this definitive advantage and maybe it's just once or twice a week being with your teammates. So they really get to know you, they can communicate, you really can tell what's going on in your life. You can listen to them. And I said, so just balance that and there are other people on my team who want to get back into the office a lot. That's their motion. So we'll be hybrid but we'll be flexible with people in that hybrid. It won't be, Hey, Tuesday, Wednesday, Thursday, you got to be in the office Monday, Fridays, you can be at home because I don't think that's gonna fit people's lives. So what we've found, what I've experienced so far is, it depends on the person. It depends on their role and that in a way you have to trust, you better have people on your team that you trust to do the right thing, because you're gonna have to give them that autonomy.
Daniel Wolf: (
Oh yeah. If I didn't trust somebody in the office, I wouldn't trust them out of it but if I trust them in the office, why shouldn't I trust them out of it?
Jon Prendergast: (
That's exactly right.
Daniel Wolf: (
I kind of like skip past the whole concept of leadership when I went to that question, Ginger, since I'm setting you up as the example to follow, I was wondering if you had any thoughts on leadership and mentorship, that you wanted to share.
Ginger Schmeltzer: (
Yeah. And I would encourage anybody who comes to this conference next year to go to the women in payments session. I missed the first half of it this year. I'm sorry that I did it. I look around me and there's all men up here except for me. That's been kind of my experience in my 22 years in banking and payments is that there's been a lot of men in the room and not very many women. I love looking in the audience and seeing that there's more women out there right now than men, fantastic.
Daniel Wolf: (
Get up here,
Ginger Schmeltzer: (
Right. So I think that the women in payment sessions are really great because it's our job as women in this industry to promote and encourage other women to take on careers here and to grow in them. And Daniel, I love your story, cause, my job at MasterCard, now I'm actually working for someone who used to work for me. And, I think, it comes back around. It's important. I've always believed that very strongly that, in my job, as a manager is to encourage people that work for me to grow and to expand and to move on. And if that hurts my team in the near term, it helps everyone in the long term. That's the right way to be. People on my team when I was at SunTrust too, I encourage to take on other roles, looked at me like I was crazy when I said, you should apply for this job. And they were like, what, do you not want me to work for you anymore? No, no, no. I want you to stay on my team but if this is a better fit for you, you should go. So, I think one of the things I've been realizing as we've gone through this pandemic and my last job was with IT group. I joined in August of 2020, middle of the pandemic. I left to join MasterCard a month ago and I never met anybody. We were remote the whole time. We never had any in-person sessions. I never actually physically met anyone that I worked with. They were a great team and we worked really well together. But, your point is exactly right. There has to be some amount of interaction and this is my first in-person conference in two and a half years. It's been amazing to actually talk to people face to face and see how that dynamic is different. And, I do think there's a lot of value in actually we're social creatures, right? There is some, a lot of value in getting together periodically. One of the things you had talked about in our prep call was around mentorship, right? And, that historically we've all looked for mentors where we work right in the office where we work. So we can have lunches or whatever it is to drive that mentoring being mentored or mentoring someone. What I've realized over the last few years is you don't have to be in person to do that but it does add a lot of benefit that you lose remotely. I'm mentoring someone who lives in Virginia right now and it's great and we have a really good dynamic, that it opened up possibilities but it's also made it a little bit more challenging to get through that.
Daniel Wolf: (
Brian, did you wanna weigh in on mentorship or hybrid work or any other topic?
Brian Tate: (
I do. I wanna say I agree with Ginger. I think being in person, especially in this conference has been extraordinarily beneficial to me. One of the things I'm sure we've all learned is that there was an abundance of content and online in terms of webinars or informational presentations. After a while you start multitasking and taking it for granted because there's so much content and so much information where coming here, you slow down, you pause and yet we still follow what we got to do for our day jobs. But being here has been an extraordinary experience, experience just because you get to connect with people. Even if you're listening online, hearing an inflection of voice or body language goes along with the messaging that you're presenting and in terms of mentorship, I would say, the first one to say I'm extraordinarily lucky to be here and some of the people I've run into along the way. As ginger said, she looks around, there's nothing but men in a lot of cases I look around and there's not a lot of people who look like me sometimes. It is on all of us to help, bring up the next level or next group or next generation of people. I don't feel like anything I do is extraordinary and if I can do it, some other people can do it. So at the same time I've helped others, connect them to jobs or just people ask me, younger attorneys or whoever asked me how I got here. I'm happy to share that story because people from all walks of life have helped me. So I'm happy to turn around and share that with others.
Daniel Wolf: (
All right. We're running down to our last five minutes. Anybody else wanted to weigh in with a question? Comment? Philosophical statement? Oh, welcome back.
Audience 1: (
Thank you. I know we talked a lot about people and especially right now where the job market is so crazy. How are you finding good people? How are you training them? How are you getting them up to speed, to understand payments, broader business implications and all that?
Jon Prendergast: (
I'm going back to people I used to work with a lot of them. And, Ginger's point is spot on, if you have built a stable of relationships because you really cared about somebody and that may be mean putting them forward and letting them go out and do what they can do better. If you really care about other people's career, when times like this happen, it's a really tight market, you have such an advantage because people know you're not just going to them because you have a problem and you can't fill it. They know, you have to fill a role. You got a problem but that they trust you because you did that in the past. So Ginger's comments were some of the best comments I've heard at the conference and they will pay. But, if you're trying to do that now, it's a little bit trouble. So take care of the people in long term and it will really help you in long term.
Daniel Wolf: (
I would add also that, even prior to the pandemic, my entire team, other than me was remote from our New York office. I was the only one in that time zone, the Eastern time zone, the folks you've met, John Adams, K Fitzgerald, they were always, well, not always remote but always remote in the time that I had worked with them. And I was always trying to promote their achievements in the office, make sure they were visible. It got to the point where I was so used to hiring remote folks that if I had to actually sit next to somebody that I worked with, I wouldn't know what to do with them. It would've been so awkward. And that pivot during the pandemic, it was just business as usual for us but at the same time, I saw our company hiring more outside of the physical, commutable, New York area. I wasn't joking about, earlier, I mentioned something about, being based in New York and working in Maine, I was on a call recently with two coworkers in Maine, like side by side. We don't have an office in Maine. We've never had an office in Maine. They like one went over to the other person's dining room, so they could be on the same camera. I don't know that we would've, filled both of those positions with somebody who wasn't able to be present in person beforehand. It's great that we've been able to just, expand the pool of candidates and who we can work with because those are both great people. And we were saying like, talking about being able to meet face to face at an event like this, this is the first time that the entire payments team, for American Banker has been in the same room at the same time previously, there was like a Bruce Wayne, Batman sort of thing going on. You weren't sure we were all really who we said we were. Any thoughts on that or anything else?
Ginger Schmeltzer: (
Yeah, I was gonna add onto that. For all the challenges the pandemic created, the opportunity it created is that a lot of people that are hiring are no longer requiring you to move to where their offices are. It is assumed that you you'll remote, when I was interviewing before I just joined MasterCard, when I was interviewing not one company I talked to said, I would need to move. It was all we'll assume you'll be remote, which is, of course, many of us have, my family's in Atlanta, my husband's there. My life is there. I don't intend to move. I don't know how I ended up in Atlanta but I'm staying. The fact that, that hurdle of needing to relocate is no longer part of the discussion opens up a lot of possibilities for hiring. And it means that we can attract talent to our team. I'm hiring on my team now and I'm looking nationwide and I'm not concerned about where they're based as long as they can have meetings with our clients in the time zones that are relevant for them. That I don't care. I worked with someone in Europe for the last year and a half and it was fantastic. I learned a ton and it was not an issue that he was based in Amsterdam. That really is an opportunity that the pandemic has created and that working remotely is no longer a hurdle. It means that, we can all bring our talents to the companies that they're best suited to, without worrying about where we're located.
Daniel Wolf: (
Okay. So we are out of time. But, if anybody had like a quick, final thought that something we didn't get to, that you'd like to weigh in on and it's okay if you have a flight and you don't have that final thought.
Jon Prendergast: (
I'll just say, hire people that really like change, right? Because in this industry, especially right now, if you hire people who don't like change, it's gonna hamper your teams.
Brian Tate: (
Absolutely. That's hundred percent right.
Ginger Schmeltzer: (
Yeah. I will just say, this is a great industry to be in. I fell into it when I finished grad school and I'm so thrilled to have been in payments. It's such a fun and wild ride and it's never boring. There's always something new coming along and happening. It definitely keeps it fresh and real for all of us that are in it.
Daniel Wolf: (
The payments industry was a happy accident for me too, as far as my career. I'm glad to be here as well and I am so amazed with all of you. You made it to the end. I am happy with the engagement. I am happy to see you all. I can't wait to see you all for the next one. So, give the panelists, a round of applause, give yourselves a round of applause.