When you’re in Las Vegas, you can’t help but wonder how long the party will last.
That seems an apt consideration for the payments and fintech players gathering here this week for the Money 20/20 conference, which is maybe the biggest financial services confab that happens anywhere off of Wall Street.
Thousands of financial services professionals have descended on The Venetian hotel, masks be damned, ready to do business and scope out the next generation of unicorns like cheap capital for startups and high-growth businesses will keep flowing.
Ever since the COVID-19 pandemic began fueling e-commerce in early 2020, the payments and fintech arenas have been on fire, with venture capitalists throwing dollars at what they believe might be the next breakout billion-dollar business. Last year, the sector attracted a record $32 billion.
But now the threat of a global recession has appeared like a shadow over all the entrepreneurial activity focused on building the next-generation of digital money services, threatening to break up the celebration.
Indeed, Lead Bank CEO Jackie Reses gave voice to that risk on Monday when she told Checkout.com CEO Guillaume Pousaz during an on-stage conversation at the conference that she believed interest rates could keep moving higher and become the “new normal” at an elevated level for the next decade.
It could become tougher for fintechs to find funding, she suggested. She cast that as a possible “opportunity” for companies to keep disrupting their industries, but that didn’t seem to inspire the entrepreneur next to her.
Pousaz, the Swiss billionaire founder of London-based Checkout.com, said he was more optimistic, and essentially hoped she was wrong about a 10-year drought of funding.
Looking out over the sea of booths for startups and young businesses in the Money 20/20 trade show floor this year, an observer can’t help but wonder which companies will make it and which ones won’t.
Marqeta, Zeta, Airwallex and others are displaying their big, brightly-colored geometric shrines at the conference, as are incumbents like Mastercard, JPMorgan Chase and Amazon as they seek to compete and cooperate.
Many of the companies sponsoring the big money conference took to the stages all day Monday to tout their business strategies and practically beg for the party to rage on. They showcased their outlooks for more good times ahead and paid little mind to the risks triggered by the Federal Reserve’s campaign to tame inflation by raising interest rates.
Pousaz said he can’t predict whether a recession might bear down on the industry, but he believes that even if it does, e-commerce will keep expanding.
That may be, but it doesn’t mean a capital drought combined with other challenges, such as rising consumer fraud in fintech businesses and increased regulation from agencies like the Consumer Financial Protection Bureau, won’t lead to a period of weaker growth, or stagnation.
On one panel at the conference, executives from the fintechs Stripe, Brex and Wise discussed at length the regulatory challenges that remain ahead.
Conspicuously absent from the conference was the name of card behemoth Visa. The card network company that dominates the payments industry wasn’t even a one-star sponsor of the festivities this year.
Visa, a company that traces its history back 64 years, has weathered many recessions. Perhaps it didn’t feel the need to invest money in a publicity campaign at the conference this year because it knows what happens when money dries up and the disruptors are suddenly parched. Competition ebbs.
People come to Vegas thinking the party will never end, but it always does.