Is Covid-19 Payments’ 9/11 Moment?

Like 9/11, the coronavirus can spur needed payment automation, I wrote in a recent Pay Think column published in PaymentsSource. You may remember that it took the 9/11 crisis to get U.S. federal legislation moving to put scanned check images on the same legal footing as the paper originals.

2020 should be that moment for the U.S. payments infrastructure. Not simply for the most obvious benefits – faster clearing times are always helpful in disaster relief efforts, of course – but to improve the critical defects that this situation has exposed in the aging financial infrastructure.

Read the article in American Banker:

The U.S. banking system is not alone. As Christian Trumm, a FinTech advisor based in Berlin, reported on my LinkedIn page:

“In Germany, we are hoping for a push in FinTech and digitisation as well since this crisis exposes how far we are lagging behind some major spots in Asia. When you just look at how Hong Kong and Singapore are deploying FinTech and neo banks to get money to businesses and consumers efficiently.”

Bill Genovese, who manage financial services strategy for Huawei, made similar points in an interview with FinTech Magazine, “Next-generation financial services: technology and disruption.” The solutions that he sees lies in open APIs and secure data exchange or interchange between different platforms. “None of this will happen without cloud; cloud technology is the prerequisite for all of these next-generation financial services.”

I agree. The most innovative payments and wealth-management services I work with are all cloud-based, whether they are built by startups or incumbent financial institutions.

Lastly, I received a number of comments focused on the impact on digital identity, a discussion that goes well beyond payments and banking. Covid-19 has disrupted the U.S. election cycle with no digital alternatives in sight for November.