It has been another exciting week in payments, particularly for those following the bouncing crypto ball this week, as the price of the world’s best known cryptocurrency plunged following the latest crypto crackdown in China. And pullbacks were something of a theme of the week, as AT&T became the latest telco to move off its content ambitions.
But the week also had growth stories to offer up as well. While telcos like AT&T are stepping back from the content business, Amazon is reportedly looking forward, contemplating a $9 billion MGM acquisition. And data out of Walmart and Target this week indicates that rising foot traffic shows consumers are increasingly ready to get back out there again.
Dropping in to discuss the latest and greatest in payments and commerce for the latest edition of The Week in Payments was Paytronix CEO Andrew Robbins, who observed that we’re watching the world come back to normal, and learning in real time that normal is not going to be quite how we remember it.
Following The Bouncing Bitcoin
It seems a week does not pass without bitcoin and crypto finding a place in the conversation. This time the main topic was a price bust brought on by China formally banning payments players from offering cryptocurrency services. According to JPMC, institutional investors are dropping crypto for good old-fashioned gold.
Crypto, Robbins observed, never fails to bring drama to the table, and this week has been no exception to that rule. But that drama distracts from what Robbins sees as the bigger truth here.
“We’re going to have a digital currency for sure. We’re going to get rid of paper and coins and the question is how do we get there?” Robbins said.
For his part, he said, he tends to side with Elon Musk that bitcoin will not be the main crypto driver, since bitcoin mining is so environmentally costly. His teenage daughters, he said, have both been given bitcoin as a gift and are trying to find a way to unload it because of the environmental disaster bitcoin mining happens to be sucking up approximately 1 percent of the world’s energy.
China’s ban, he said, is interesting in that they aren’t anti-digital currency, they’re in the process of building one of their own. They don’t want the competition, something they’ve long signaled, nor do they want Chinese nationals to have an easy means to send their currency abroad.
“I think China wants to control the digital currency and at the same time they like to gather information on their citizens and they can’t do that with bitcoin,” Robbins said.
The Shifting Sands In Content Creation
Once upon a not so long time ago, it seems everyone wanted to rule the content world. But as of this week, it seems, telcos have gotten a lot less interested, as AT&T’s coming deal with Discover follows a similar recent decision by Verizon to sell off its media business.
The explanation here, Robbins told Webster, is likely 5G and the growing race to control it.
“They know you’re going to stream and that means you’re going to need 5G,” he said. “They’re making a bet that it doesn’t matter where you go to get your content, they’ll make their money by offering the 5G that powers it and they need to finance that. So they’re selling the content.”
Meanwhile, he said, players like Amazon who can actually use the content already have well-established distribution channels. Hence Amazon’s perhaps forthcoming acquisition of MGM studios as a way to add more content to its streaming ambitions and monetize the content. The more interesting development, Robbins said, is news out of Spotify this week that it is expanding into the realm of virtual concerts, as it represents what could perhaps be the next evolution forward the music scene needs. The record labels, Robbins said, are dead for all intents and purposes slayed by the web for being archaic.
“The trouble is people really haven’t found the best new way for talent to get discovered,” Robbins said, noting that Spotfiy’s announcement this week indicates it might just be on path to building that better new way.
And speaking of change on the way …
The Changing Shape Of Retail
Consumers are coming back to stores. That’s what the data out of Walmart and Target told us this week in their earnings reports. And yet, Robbins said, what we are seeing in retail is very much like the restaurant scene. Consumers are getting back out there now that mask mandates have been lifted and vaccines are in wide circulation. But getting back out there hasn’t meant they’ve abandoned their new collection of digital habits. Consumers are coming back, but they’re coming back differently than they were before.
And retailers, he noted, are thus being forced to think differently about stores than they ever have. And they need to be more creative not just as places consumers go to shop, but as fulfillment centers where they can easily pick up what they have ordered online. And retailers, he said, as evidenced by Walmart’s acquisition of a virtual fitting room firm, are recreating their retail experience toward the omnichannel to meet customers wherever they are.
“We are really going to start seeing the art of the possible because you have the need and then you need to figure out how to approach it differently,” Robbins said. “Consumers are asking ‘what could be different? Maybe I really can try that thing at home.’”
Consumers, he said, are more aware of what’s possible than ever. Which means the bar has been raised, and permanently so.