In case you hadn’t noticed amid all of the news going on, Consumer Electronics Show 2021 started this week.
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The well-known consumer electronics show, which was virtual this year, features company showcases, keynote speakers from top global consumer companies and a plethora of webinars on topics including the latest products to make your home smarter and what’s happening in the fintech, e-commerce and digital health industries.
One of the webinars I tuned into Tuesday was a pre-taped session called “The Rise of FinTechs – Has Consumer Financial Behavior Changed Forever?” which included conversations with Ginger Baker, head of financial access at Plaid, and Erika Wool, head of payments partnership at Stripe.
Andrew Morris, founder and CEO of The Fintech Agenda, fielded questions. While introducing Baker, he alluded to the Plaid and Visa proposed merger agreement, and this session ironically aired minutes after the two companies announced the termination of their agreement amid antitrust scrutiny by the U.S. federal government.
The global pandemic has been at the forefront of most people’s news cycles for the past year, and Baker and Wool discussed how it shaped the digital banking and e-commerce landscapes.
“It’s had a massive impact, almost as if the future you envisioned would take years, you pressed a fast-forward button and it arrived,” Baker said about digital banking.
She cited research Plaid conducted that showed 60 percent of people are using more fintech now than before COVID-19, and that 80 percent said they could now manage their financial life without going into a bank branch, a statistic she found particularly interesting.
Meanwhile, there were so many people using computers or smartphones for everything from visiting the doctor to buying groceries, mainly doing it out of necessity, Wool said. The scope of e-commerce has grown tremendously, which she said was evident in payments: Stripe processed $10 billion in payments in a six-month period of time between March and August 2020.
An example Wool provided of the change in behavior was about a farming family in France that went from a cash-only and in-person business to fully online selling weekly food boxes.
“There are a lot more stories just like that showing how Stripe helped companies and retailers pivot to online,” she added.
Baker and Wool also discussed how much of today’s consumer behavior will stick around after it is safe to mingle with others again.
Baker expects services that became more meaningful during the pandemic will stay. Those include payment products aimed at decreasing stress and enabling a more fluid payments experience.
Similarly, Wool agreed that much of the behavior “is here to stay.”
“A lot of the behavior was out of necessity, but has resulted in better experiences,” Wool said. “We have seen the demand spikes and they are expected to continue.”
Indeed, e-commerce experts forecast that 2021 will be the year for companies working on their customer service. And despite all of that necessity and what seemed like a flurry of investment activity, deals and dollars were down for e-commerce technology startups—those with a focus on “e-commerce platforms” and “retail technology”—both globally and in the U.S. in 2020, according to Crunchbase data.
Investors infused $2.4 billion into 128 e-commerce startups in the U.S. in 2020, compared with $2.5 billion in 195 deals in 2019. Globally, that was $4 billion in 363 deals in 2020, compared with $5.1 billion in 534 deals the year prior. Overall, investors have sunk $21.1 billion into global e-commerce companies since 2016 and $9.4 billion into U.S. companies during the same period of time.
Screenshots of the session were taken at the time of the airing.
Blogroll illustration: Li-Anne Dias
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