Every time you see a successful business, someone made a courageous decision.
This quote from management consultant Peter F. Drucker rings truer than ever – especially given the changing dynamics and challenges of the contemporary macroeconomic operating environment, where courageous and agile decisions are the lifeblood of business success. ‘business.
“The FinTech space is in choppy waters, at least compared to a few years ago, where there was nothing but the wind at our backs,” Jim McCarthyCEO of Threddtold PYMNTS for the “What’s Next in Payments: Quarterly Scorecard” series.
And that only makes courageous decisions even more important.
That’s why, as McCarthy explains, Thredd made headlines in the first quarter with its strategic entry into the US market.
“You can’t credibly call yourself a large-scale enterprise or FinTech if you’re not in the U.S. It’s still the largest total addressable market in the FinTech landscape, it’s a important market,” McCarthy said.
In the United States in particular, businesses face several high-profile trends shaping the economic landscape, including inflation, interest rates and regulatory oversight.
Looking back on the first quarter, McCarthy highlighted the importance of risk management and compliance in an environment marked by increased regulatory oversight, particularly in areas such as anti-money laundering and protocols. “Know your customer/Know your business” (KYC/KYB).
“There’s a real focus on risk and compliance, and it’s necessary. It’s hygiene. But there has been rapid growth in banking and FinTech without much focus on that,” he said.
Navigating macroeconomic trends and market dynamics
The continued contraction of the banking-as-a-service (BaaS) sector presents challenges for FinTech clients who need to find willing and capable partners.
Despite the industry’s regulatory complexities and shifting sands, McCarthy noted that Thredd’s early successes in the U.S. market reflect its commitment to growth and innovation.
The rise of integrated finance and the resurgence of cross-border transactions, particularly in the travel sector, he added, present both challenges and opportunities for companies navigating the global market.
“We have a number of large enterprise customers who are looking to integrate payments and be more fully functional in terms of a complete payments stack,” McCarthy said.
And with the return of online business travel, virtual cards have become a key tool for managing risk and controlling payments in the B2B travel sector.
“Virtual cards are at the heart of much of the growth in travel. … They can be used effectively to manage risk and manage card controls around spending,” McCarthy said, pointing to virtual cards as a significant area of opportunity.
When asked about Thredd’s approach to customer acquisition and retention, McCarthy said reliability and performance are fundamental.
“Being reliable is not something you get a lot of kudos for, but it is crucial and expected,” he said.
Beyond reliability, it’s essential to stay abreast of market changes and innovations from network partners like Visa and MasterCard. Thredd’s ability to quickly integrate and deliver innovations to its customers is a key differentiator in a competitive market.
McCarthy also spoke about the global mentality of Internet-age companies, emphasizing the importance of supporting their customers’ international ambitions.
“Internet companies don’t think, you know, oh, I’m an American company or a British company; they want to move around the world,” he explained. “We spend a lot of time helping our customers enter these markets in a compliant manner. »
This perspective is integral to Thredd’s approach to customer growth and retention.
Fighting fraud in commercial payments
As consumer fraud increasingly grabs the headlines, fraud remains a persistent threat in B2B payments and commercial environments – a reality that increasingly requires robust fraud prevention measures.
“Commercial cards have often led the way in an innovation agenda,” McCarthy said, highlighting the commercial card networks’ proactive approach to innovative fraud detection and prevention technologies, and emphasizing the importance continued vigilance in the protection of financial transactions.
Elsewhere, McCarthy noted the growing acceptance of electronic payments across all sectors, particularly in business-to-business (B2B) transactions, which are driven by the efficiency and cost-effectiveness of digital payment solutions.
The widespread adoption of electronic payments has transformed the financial landscape, with cash gradually becoming obsolete in many sectors.
“Where big pockets still exist, it’s generally in the B2B space. … But I don’t think it’s difficult to make the case to anyone about the benefits of going electronic,” McCarthy said.
Looking ahead, McCarthy highlighted the importance of monitoring economic trends, innovation in payments, and the growing importance of embedded finance. He urged financial leaders to view payments as a core part of their business strategy, emphasizing the need to adapt to changing consumer preferences and market dynamics.
“People are restructuring their businesses around payments. The winners of the future will truly understand that payments are at the heart of everything they do,” McCarthy said.
