Role of Banks in the World of P2P and Digital Wallet Payments: A PayCLT Event

On Friday June 17, 2016, PayCLT reconvened in The Garage at Packard Place in Charlotte, NC for their bi-weekly meeting where local industry experts gather to discuss the latest trends in FinTech, payments, and the future of banking. Normally a host to industry experts who give a presentation on a specific segment of the FinTech world, the pace was changed this week as PayCLT switched to a debate-style format in which the room was divided into two teams to discuss a hot topic in the FinTech world. The topic at hand was the role of banks in the P2P payment marketplace and digital wallet marketplace with the teams being pro-bank and pro-third party, meaning one team supported an active involvement of banks in the P2P payment and digital wallet marketplace, and one team supported third-party (nonbank) companies handling these transactions.

The discussion was broken into two sections: one on the topic of P2P payments, and one on digital wallets, with P2P payments being taken on first. This proved to be a hot discussion as both teams went back and forth continuously, trading blows in an active debate on the presence of banks in the P2P marketplace, and the reliability of the third-party vendors who have staked their claim on the segment. The first argument brought to the discussion was in favor of bank involvement and stated that the third-party providers of P2P payments can lack the service capabilities required by a company that is responsible for moving money from one party to another. This prompted a discussion on whether financial institutions should cede to the third-party payment companies, or if they should directly compete in an effort to provide a superior product to their customers that they can profit from. This segment of the discussion was fueled by a number of debaters who had vast knowledge and experience with companies like PayPal and Venmo, had very strong feelings about them, and did not mince words as they went back and forth for the first 20 minutes of the debate on the topic of P2P.

On Friday June 17, 2016, Pay CLT participated in a debate on the role of banks in a world or P2P and digital wallet payments.

To conclude the discussion, each debate team presented their key points in support of their arguments. The pro-bank team mentioned banks’ access to their customers’ financial data, enhanced security measures and trustworthiness with consumers as the advantages of banks operating within the P2P payment marketplace instead of third parties. The pro-third party team mentioned the ease of use for making simple payments and avoiding the complicated world of bank requirements as the advantages to supporting third-party companies in the P2P marketplace.

As mentioned, the next debate topic was digital wallets, which are electronic devices that allow individuals to make e-commerce transactions through NFC, and are beginning to grow in popularity in the US Financial market. Many of the largest banks in the United States are attempting to enter the digital wallet market that has, up until now, been dominated by nonbank suppliers in the same way as the P2P payment segment. This debate followed much of the same points as the previous debate, with those in favor of bank involvement citing the massive data capabilities of banks along with more established customer relations and security measures, while those in favor of third parties referencing their streamlined process and ease of use, creating a more convenient experience for customers.

Attending this PayCLT event was a fascinating experience as it gave me a chance to observe a lively debate on a number of hot topics in the FinTech world and I only wish I could have participated. Throughout the discussions, many of the industry experts in the debate referenced their real-life experiences in the P2P payment and digital wallet marketplace, both good and bad, in an effort to swing the momentum of the debate. This added depth to the topic that would be difficult to find anywhere else and it was a pleasure to be able to witness the liveliness of it all first-hand. Despite being randomly assigned, both teams embraced their positions and showed their vast knowledge on the subject as they debated for a full hour until the moderator had to cut them off. If you didn’t make it to this PayCLT event, then you should certainly make it to the next one on August 5 after the group takes the month of July off. The topic has not yet been announced but information leading up to the event can be found at