ARYZE interviewed Délber Lage, the CEO of SalaryFits where he is leading the international expansion of the company, with exciting opportunities on all continents. We asked him about his visions of the future of payment traffic and money and gained some interesting insights.
Délber Lage is a curious and enthusiastic person that believes that businesses must have a social purpose and that billion dollar opportunities are where the billion dollar issues are. He comes from a background in Law and did his PhD in International Law, and dealt with various M&A processes of high growth companies. This gave him the chance to advise many tech companies in the Finance sector, specifically focused on scaling those companies across borders and helping them to capture global opportunities.
How will we pay in five years?
“One could claim that the overall trend is towards contactless and mobile payments. Contactless is experiencing significantly faster adoption with over 130 million equipped cards in circulation and over 10 billion payments processed in the UK in 2019. Whereas mobile payment adoption is lacking behind at only 17% with half of signed up users making regular purchases. The extra effort for registration and the need for banks to actively support Apple Pay, Google Pay, and others are slowing adoption. In the long run, however, mobile payments have an advantage in security through biometric verification and higher convenience. This could get to a tipping point in five years, where mobile and contactless will become equally dominant.
My personal take, however, is that payments will become more and more personal. Either being embedded on the platforms that we use or actually somewhere under our skin, there is no doubt that it needs to be fast, frictionless and definitely there when we need it.”
How long will there be paper money?
“Paper money is becoming less relevant in practically all areas around the globe. This doesn’t mean that we are going to see it disappear anytime soon.
The difference lies in the pace at which it is getting closer to obsolescence depending on the area we are looking at. Some of the factors playing a role here are the level of technological acceptance, the advantages from mobile/card payments for the specific user group as well as economic development and infrastructure available across different dragoons.
In the UK, where 2007 over 60% of all transactions were still paid in cash, today it’s roughly 30% and expected to half again until 2027. And I believe this trend will only accelerate with the advancements in technology.
However, cash won’t leave us anytime soon. The decline will go through an exponential decrease in usage and acceptance at retailers, but a small percentage will hold on the same and still use it where needed or more convenient (either through lack of resources or local practices).”
How can the financial sector gain more transparency and trust? Can Fintechs help?
“Today, Fintechs are already doing a great job bringing more transparency into finance and especially giving users back control. Applications that let you instantly check credit scores, challenger banks that have a very clear fee structure and many others are helping to drive the traditional players to keep up.
Yes, Fintechs are helping to increase transparency while also driving the big banks to step up their game. In terms of the trust, most traditional financial institutions might still be ahead of the challenger banks, not at least, because many people still feel more secure when dealing with a physical entity/branch. In the long-run, the most successful players will be those that stand up to the high social values they are praising in their advertisements, regardless of them being traditional incumbents or challenger Fintechs.
Users are increasingly becoming aware of the unethical practices in the financial sector and demanding fair products. They need a financial partner who is helping them understand, control and access finance. Those companies that are driven by sales rather than serving their customers’ needs and assisting them to do better will lose out in the long run.”
What will be the advantages of digital cash?
“At the point where payment devices (phones, tablets, smartwatches, etc.) can function as receivers of payments, the credit card reader will go through a similar development as the camera did after 2000 and turn from a device into a feature. This will be a tipping point for the adoption of digital cash and make anyone, anywhere able to pay, receive and exchange funds. Instantly, at almost no cost. Most developing countries can leapfrog card payments and go straight to mobile payments using digital cash. If we take M-pesa as an example, which had huge success in Kenya and now multiple other countries. With smartphones getting cheaper and cheaper and spreading across the African continent, digital cash will enable the unbanked to not only transfer money between each other but start accessing a whole range of financial products and services.
Our company SalaryFits, for example, will be able to give these individuals an option to use their salary account more flexibly. We have developed a solution called SalaryPay, which enables employees to pay merchants via a QR code deducting payments directly from their next salary. This way of payment is 100% digital and allows employees to take advantage of their salary in advance of the payday. This type of solution will be as relevant in developing countries as it is in the UK, where 49% of consumers borrow money regularly to pay for basic needs.”
How do we build a bridge between traditional cash and the electronic solutions of the future?
“The most challenging aspect of a cash-less future is to create a transition that is no disadvantaging the already underbanked individuals. A cashless society has the potential to be more inclusive but it has to be designed to work just as well in underdeveloped areas or it might turn advantages into disadvantages for others.
If cashless infrastructure can keep up to those needs, it will definitely be more cost-effective and will serve people better than cash.
Lower-income families already pay a poverty premium on most transactions of their life, if it is not possible for Fintech’s and banks to create systems that are inclusive and available to all, it might further worsen their situation. Digital cash might bring a range of benefits by itself, but most financial products today also require reliable information that is incredibly difficult to access for individuals in developing countries as well as the more than 45% underserved population in Europe.
That’s where we as SalaryFits come in to minimize the information asymmetry by connecting a companies payroll directly to the financial players. This way we enable consumers to have immediate access to their salaries, as financial providers have real-time access to personal, employment and salary data of the employee – upon his request – making digital money truly more inclusive.”
SalaryFits is a platform that empowers the individual on its financial life through enhanced use of his salary. In order to do so, we integrate Financial Institutions to Individuals through their payroll, improving the conditions of the marketplace and creating a win-win scenario for all those involved. For more interesting insights stay tuned on our ARYZE blog and website.