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The Week In Payments: Robinhood Debuts, Walmart To Sell Tech And Super Apps Have An Ecosystem

As consumers nationwide struggle to stay cool, payments and commerce were on fire again this week as earnings results flowed in while an uncertain world readies itself for an increasingly uncertain second half of a year.

There’s a lot to watch in world that is undergoing a great digitalization, USEND COO and CTO Ran Grushkowsky told Karen Webster when he dropped in for the latest installment of The Week in Payments, noting that merchants and regulators are working simultaneously to keep on top of what’s coming next in payments and commerce.

“I think the crypto space every week catches our attention as there are a lot of interesting developments, a lot of big announcements by major financial institutions that would like to get into the space,” Grushkowsky said. “It’s still to be determined why — is it just to ride the hype? What is true innovation there?”

Looking at the week’s headlines as PayPal and Facebook pushed their very different super-app ambitions, Robinhood made its official debut on the public markets and Walmart decided to open up its digital toolbox to other merchants, Grushkowsky noted there’s a lot of impressive inventions out there, and real potential for all kinds of players.

Robinhood’s Rocky Public Debut 

The public markets have a new FinTech entrant in Robinhood, the digital stock and cryptocurrency trading platform behind the meme stock rally this spring. The company began trading on the Nasdaq on Thursday (July 29) with an estimated valuation of $32 billion, after pricing its initial public offering (IPO) at the low end of it expected range only to fall further in the market. Robinhood’s IPO was one of the more highly valued firms to debut on the U.S. markets so far in 2021, as well as the worst opening day performer.

And while Robinhood has proven itself fast moving and innovative, it still has a massive PR problem to clean up with its users arising from the meme stock explosion earlier this year which pushed the platform to limit traders’ activity on the platform without their consent.

“Would you trust them with your money after they limited your capabilities to trade? I think that if they can address those concerns, Robinhood’s future is very promising because obviously they know very well how to make financial services accessible to the new generation of consumers,” Grushkowsky said.

But even beyond its PR issues, Robinhood has a bigger issue with regulators — and their mounting concern about the gamification of investment that lies at the heart of what distinguishes the platform from other online trading platforms. Ultimately, Grushkowsky said, it might require the firm to go back and retool its model and “turn their capabilities and expertise at gamifying the experience and turn into education” that empowers consumers to become better investors.

Walmart Opens Up Its Tech Tools 

Walmart this week announced plans to extend access to some of the same technologies it uses for itself to merchants and brands selling on its eCommerce marketplace.

It’s a clever move, Grushkowsky said, and in line with recent moves by Amazon to extend more commerce capabilities to its marketplace merchants — though not at the Amazon price point. It’s a smart opportunity for Walmart, he said, and an opportunity to “take the niche” in a place where Amazon is still not so far ahead that they can take a decent stab of stealing back some market share.

Because, Grushkowsky noted, Walmart is often a bit undersold when considered for its technical capabilities.

“They are one of those brands that in the tech world, most people don’t know, that have made significant investments and are actually quite active in both acquisitions and investments. And Walmart’s true opportunity is to tap its brand power and make their services available. It remains to be determined how well they can emerge among all of those technologies,” he said.

But the competition between Walmart and Amazon — and across the eCommerce landscape — will have a net positive impact for the economy as a whole, he noted, because small and medium-sized businesses (SMBs) will be the net winners of a competition among giants to help them reach consumers.

PayPal, Facebook And The Super-Sized Efforts At Super-Apps 

PayPal has made its super-app ambitions clear for the better part of a year, and in its earnings call this week started to offer some color about what its more enriched financial services offering will be for consumers looking to control their financial lives from within the advanced PayPal ecosystem.

The challenge for PayPal, Grushkowsky told Webster, will be in innovating quickly given its massive size. With newcomers to digital financial services popping up nearly by the day, being a super-app that is totally caught up to the cutting edge is a tall order. There’s room for more players like PayPal to try and position themselves as super-apps — but that, he noted, means a lot of investment in innovation and a lot of acquisitions to stay ahead of a very dynamic market.

PayPal, he said, needs to start thinking truly globally now, and how it can offer level services across its market it really wants to attain the super app position it is gunning for in financial services.

Facebook, Webster and Grushkowsky agreed, was the other super-app play of the week, albeit a quieter one based more in the metaverse than FinTech.

“Facebook essentially has a track record of investing big before the market sees it. So I think that they are definitely innovators and visionaries and it paid off until now,” he said.

Its big investment in Oculus and the development of the metaverse, he said, is planting a flag early in ground that the general public hasn’t embraced yet — but that increasingly looks like it is going to present a slew of connected opportunities.

“Because essentially, it’s the new ecosystem, it’s version 5.0 the internet. And I think people need to start paying more attention to those developments specifically when you have a player like Facebook making those big announcements and betting heavily on it,” Grushkowsky said. “I think we have to pay attention.”

But then, there are a lot of plays to pay attention to in a week in payments. Because the big moves don’t stop, or slow down at all, even in the dog days of summer.

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