Retailing Finance & Healthcare [Jan'21 edition]

Cancel culture & Universal identities

A few high profile events took place this month -

• Biden took presidency amid prior day riots in the capitol

• a host of other events in the world of international relations & business .. & then

• Gamestop stock became a topic of conversation across dinner tables

We love the power of communities, however do you think we need to put a halt to this trading frenzy? Or that regulations & limits put in place by trading platforms are necessary course-corrections?

For this issue, I thought of turning things around a bit and delving deeper into three-four trends that we’ve seen over the last month or so :

Walmart’s venture into Fintech (Retail + Finance)

Walmart is on the verge of creating a fintech startup in collaboration with Ribbit Capital, one of the venture capital firms backing Robinhood.

Starting with its current target market - mass retail, many of whom might or might not have access to capital, customers who prefer to pay with cash, and belong to the mid-to-lower economic strata of society - it seems a few challenges that Walmart can immediately solve for their customers are -

• immediate access to capital (in store or online) - this can take the shape and form of BNPL (buy now pay later) or even small unsecured loans based on the customer’s shopping, behavior and credit history.

• High interest savings accounts - with a particular focus on kids and youth

• P2P payment solutions - creating family groups, splitting expenses for purchases

• financial literacy - enhancing the collective knowledge of its customers around handling of their day to day finances, investing and more.

• digital money management & financial planning - providing better means of planning for short and long term goals, expense management and more

• personalized rewards & offers (possibly real time) - store-specific, online as well as as partner offers

All this could eventually lead to -

• cashier-less checkout technology (if 90% of the customers have the walmart fintech app with an associated credit/debit account, it becomes easier to roll out facial recognition and palm scanning to pay for your purchases). Or we might be looking at some tech partnerships in this case (Amazon and Apple come to mind).

• product bundling - last but not the least, the 2020 trend of bundling products and services in a neat package at an optimal price would be the way to go for Walmart. Think express online shipping + walmart credit card + chequing/savings account + financial planning / money management service with rewards/offers - opportunities are endless for this tier.

The entire goal of this fintech venture might be to attain the much sought after holy grail - cross-dimensional customer data. Imagine merging customers shopping data beyond Walmart, learning about customer spending habits elsewhere, while democratizing financial literacy and independence for its users at one single point - why not do your banking while you shop?

Ride Hailing + Distribution of Healthcare

Uber, in another attempt to expand its business beyond ride sharing (after dabbling its feet in autonomous vehicles) has partnered with the pharma company Moderna to help relieve some of the challenges around distribution of the COVID-19 vaccine this year.

This could take the shape of notifying the customer when the vaccine is available in their neighborhood, showing a list of places where the vaccination program is taking place in their city (or based on the user’s location), providing accurate information about the vaccine - best practices & reporting and such, providing discounted rides to the inoculation center, and triggering follow-up reminders for when the next dose of vaccination is up for the customer. Basically Uber has the ability to leverage the ubiquity of its app to provide a digital healthcare solution to its customers.

What else could Uber distribute? It already distributes human movement (via ride hailing), food (via uber eats), grocery (via partnerships with various superstores/grocery shops), packages (via Uber Connect), freight (via Uber Freight) & micro-mobility (via partnership with Lime - electric bikes & scooters) and now pharma (via Moderna). Could it distribute finance next?

Bets off between Visa & Plaid

The fintech data aggregator startup Plaid allows users to connect their financial data (transaction history , accounts, identity, balances, assets and more) to different apps and services through APIs (and screen scrapping). Visa’s acquisition of Plaid would have provided all the leverage there is to the financial services behemoth, and maybe that’s the very reason the DoJ (US Department of Justice) decided to put a full stop to this deal on the basis of antitrust claims.

Plaid seems to be okay at the moment - last I heard their CEO touting that ‘an independent path is best for our customers, team, and for the financial services ecosystem.’

The potential ubiquity of Open Banking in North America would pave the road for Plaid’s long term success, as it has done in the UK, with fintech startups enjoying the fruits of seamless financial data connectivity to bring various out-of-the-box experiences for their customers.

Vaccine passports & Universal identities

Identification and recognition of your vaccine immunization across different countries would be the next step after COVID19 mass inoculation. Just as citizenship, residency and even movement of currencies require a standardized framework to operate seamlessly between different country jurisdictions, so as “global vaccination identity” would require homogenization across geographical borders.

Hence the European Union is working on creating a common framework for vaccine passports that would allow vaccine certificates to be identified for authenticity and accepted across various European countries (member states). This can take the form of

“encrypted digital copy of [a person’s] immunization credentials to store in a digital wallet of their choice,”

“privacy-preserving health status verification” solution that is at least in part “blockchain-enabled.”

Since health records (vaccinations, medical history et all) are part of one’s identity, could we think of something akin to a “financial passport”? A financial identity that lets me spend, invest, move, store money across country lines without incurring the current costs, latency & hassle of switching between different bank accounts and services across borders.

This leads to the ultimate paradigm of the equation - universal identities. If my citizenship and residency is easily identified across the world through passports, why can’t I’ve other parts of my identity merged into one? Be it financial, health, familial, social and others. This might seem like a concept directly out of Black Mirror, but the future isn’t that far.

Connected Cars

Internet of cars is already a possibility, but to what degree can we allow ourselves to let go of that data?

Would DLT (distributed ledger technology), wherein data is distributed across a decentralized network of servers and computers, would do a better job of data protection and security?

And what about latency and cost? Connected cars and smart cities create a potential of creating billions and trillions of small “transactions” - car movement, accidents, vehicle breakdowns, gas usage, maintenance data and so much more. All that data over DLT would require super fast processing and minimal/no transaction cost to provide any tangible value to us.

DLT that expects a little money every time a car’s air conditioning reports its output is simply unusable for that application. Any DLT that’s going to give us a high level of security and real-time connectivity will also have to be feeless.

Another market to keep track of -

Amazon is not giving up the Indian market. With Reliance and Future Group on the verge of a merge last month, Amazon finally pushed Indian regulators to block the $3.3B retail deal.

India’s retail market is estimated to balloon to $1.3 trillion by 2025, up from $700 billion in 2019, according to consultancy firm BCG and local trade group Retailers’ Association India. Online shopping accounts for about 3% of all retail in India

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And onto more philosophical & random tones…

Cancel culture

In short, cancel culture is nothing but a way to -

diminish the words of your detractors

I keep coming back to 1984 by George Orwell, because a lot of what I read today and what is happening around us is directly reminiscent of the diabolical dystopian world that 1984 dwells in. Cancel culture is just another step in that direction.

The power of negating or devaluing your ideas & opinions through mob mentality, social ostracization or just moral policing is gaining momentum both among the right and left wing citizenry.

*EDIT : for now, I’m neither zealously for nor against cancel culture. As we’ve seen time and again, both liberals and conservatives feel usurped respectively whenever the other party demonstrates their unwillingness to listen, understand or accept our opinions (and ideologies). But with all urban abstractions (woke & bougie cultures come to mind), cancel culture will evolve. Regulation is a given though, mostly for our benefit.*

Do our social platforms have a metric they track to measure their success in controlling this ominous or retributive (relative to whose context you see it from) culture?

Books in my read list -

I had the pleasure of spending the last few weeks of 2020 and a major portion of my winter vacation reading some interesting books -

• No Rules Rules : Netflix & the Culture of Reinvention | Reed Hastings

• That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea | Marc Randolph

• The Ride of a Lifetime | Robert Iger

• The Hard Things about Hard things | Ben Horowitz

• What You Do is Who You Are | Ben Horowitz

• Atomic Habits | James Clear

• Think Like a Monk | Jay Shetty

What’s on your list?

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Did you like this snapshot of the underlying shifts & currents brewing in the Payment, Cards & Innovation space? If you found this useful, feel free to comment, share and subscribe.