PayPal CA’s mobile expert gives us the lay of the fintech land, highlighting new mobile payment verticals and user experiences to explore.
PayPal’s solutions always seem to meet customers at the exact places they want to transact. That’s not just a coincidence—for more than 18 years, PayPal has been setting the pace for mobile payments thanks to precise product development and a genuine understanding of consumer needs. We talked to Alexander Peh, PayPal CA’s resident mobile whiz to get a better sense of what the “hot” fintech trends are and how other innovators can get there.
Carta Worldwide: Why are consumers (both customers and businesses) in Canada reluctant to move away from traditional banking products?
Alexander Peh: If we’re talking about Canada, the strength and the breadth of the traditional financial services institution means that it’s just much harder for a smaller fintech company to make it into a trusted, perceived as safer, household name. Fintech is on the rise, but it’s going to take huge amounts of customer awareness of products and solutions to really get consumers adopting fintech products.
Carta: How can fintech innovators be more competitive in a market dominated by the big banks?
Alexander Peh: Fintech was a hot trend in 2015 and we saw it intensify in 2016. Competition is definitely going to be fierce, and we think that fintech startup founders and employees need to wear many hats to build a successful business.
I firmly believe that the focus should not be on disrupting or challenging traditional financial systems, but focusing on solving a specific friction or pain point faced by customers. For example, many small businesses were not able to get starting loans from banks without a lot of documentation. That led to a breed of fintech companies that lend money to small businesses and startups.
I would also stress that it is hugely important to have a solid marketing strategy. It aids discovery, it can help lower the costs of acquiring new customers and increase the lifetime value of a customer.
It’s vital to think global—think of other markets beyond Canada.
Lastly, it’s really about regulations and knowing your regulators. PayPal has an 18-year history of being a successful fintech company and we have invested heavily in following laws and regulations in the 200 markets in which we operate all over the world.
Carta: Do you think the mobile payments ecosystem lacks diversity? What are the areas for growth?
Alexander Peh: I think the mobile payment ecosystem in Canada is vibrant and diverse. In the last two years we have seen a large number of retailers and startups spring up in shopping, food ordering, transportation, accommodation and services verticals. In food alone you have 50-plus startups and well-established companies like Just Eat that have launched or ramped up their mobile payment offerings in the last year.
The mobile payments sector is booming as retailers, small businesses, startups, payment providers like us (PayPal) and even the banks have realized that mobile is the future of payments. If businesses don’t offer mobile payment options to their customers, they’ll miss out on a big chunk of customers who prefer and choose to transact on mobile devices.
One area for growth of mobile payments across Canada is public transit. In Toronto, people have a TTC pass, a Presto card and a UP Express ticket. Ideally, there should be one single transit system that is mobile-enabled. These institutions should collaborate amongst themselves and come up with one unified mobile-friendly transit solution to drive greater customer convenience and adoption.
Carta: How has your team at PayPal evolved your technology’s user experience to cater to the pervasive use of mobile devices?
Alexander Peh: We processed the first mobile payment in Canada way back in 2006. We really focus on trying to predict or very quickly follow where our customers (consumers and businesses) want and need to transact.
I think everyone can agree that the Uber app has an incredibly strong user experience. We worked with Uber to help deliver that user experience.
Today, we want that Uber payment experience and convenience across all your daily life moments when you need to transact. We have made it easy for you to pay for coffee with the Starbucks app, order your groceries with the Urbery app on your phone, and order takeout from Just Eat, Foodora and UberEATS. We want you to be able to do just about everything, including paying for your parking, which we just did in Vancouver with EasyPark. So it’s really about trying to find people’s desired user experiences and then bringing that onto mobile.
Carta: How does PayPal strike the balance of designing for user needs/demand but also shaping future consumer behaviours?
Alexander Peh: We see online consumer buying and merchant selling behaviour probably more closely than any other company in our space, and we see how technology is radically transforming the shopping and selling experience.
We’ve been building for a mobile commerce future for years. Just to give you an idea, in 2015, PayPal processed 1.4 billion mobile payment transactions—up 71% from the previous year. The data shows you just how much mobile payments are accelerating. Today, one in every four transactions that PayPal processes originates from a mobile device.
So when we talk about striking the balance of designing for user demands but also shaping the future, for example, we just launched an integration where you can tell Siri on your iPhone to send money with a voice-activated command. With something like that, we’re always looking at how users are using technology and we’re trying to work on the right products and solutions that are useful and contextual for customers.