Financial services company Marqeta released its fourth annual state of payments report which reveals how widely Americans have adopted new technology like mobile banking and wallets. Marqeta CEO Simon Khalaf joined Cheddar News to discuss how common digital payments have become.

<div class="block">Financial services company Marqeta released its fourth annual state of payments report which reveals how widely Americans have adopted new technology like mobile banking and wallets. Marqeta CEO Simon Khalaf joined Cheddar News to discuss how common digital payments have become.</div>

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Financial Services Company Marqeta CEO Discusses How Digital Wallets Are Becoming Common

In the past several decades, the way that we pay for products and services has advanced in unexpected ways from cash to checks cards. And now mobile Payments Financial Services company Marchetta this week released its fourth annual state of payments report which reveals how widely Americans have adopted new technology like mobile banking and wallets. So joining me now is the CEO of Marta Simon. Simon. Thanks so much for joining the show. According to your report, how common are digital payments these days? First, the first, thanks for having us uh for having me and Marque on, on, on your show. So well, indeed, we did release our state of payment uh reports. And I mean, there's, there's a lot of taste in the report for everyone, but I'd say the highlights that uh banking has become predominantly a digital experience. Uh 71% of consumers uh say that uh they actually do um most of their banking services, not just payments uh digitally, that's four times more what they do with the physical bank. The second thing is the mobile wallet has become the predominant wallet. Uh You have 72% of Americans saying they're comfortable, uh leaving their wallets at home, something that is up 10% over last year. And the last thing I'd say, it's, it's Beng has becoming an embedded experience. It's embedded inside the, the consumer experience, which is, um, we have 56 percent of consumers saying they're willing to get all their financial services from a non bank. And 86% of the mobile consumers actually have done a purchase inside an ETA app. So I think this is a big shift. So Simon, as these habits become more common place, what do consumers need to know about how to safely and effectively use mobile wallets? The the the beautiful things about is that uh it is a safe payment mechanism. And the other thing I'd say is there ha there used to be a fight among banks to become top of wallet uh as in like every bank wants your card to or wants their card to be used by the consumer. What is happening here is because of embedded finance and and and also the mobile wallet. The the wallet itself is choosing the best card for the best retailer. So you're seeing the loyalty shift from uh from the banks into, into the brands themselves. And that's something that is exciting uh to, to retailers. So on one end, you've got the safety of the mobile wallet because you're not going to lose your card. And then if you lose your phone, you can automatically shut it down. You don't even need to make a phone call. And at the same time, the loyalty is moving from the financial institutions into the brand that can reward you immediately with goods and services. So Simon to that end, what do you think this means for traditional financial institutions? Some of the biggest money center banks out there? Uh I mean, uh there, it means a lot of things, I mean, the most interesting thing is, I mean, uh you, you can look at the report and say, well, banks are gonna go away like the trip to the bank is gonna disappear. That's actually not the case. It means that banks are gonna be everywhere. There's simply gonna be embedded inside inside applications. They're gonna be embedded inside digital marketplaces, they're gonna be embedded in creator marketplaces, they're gonna be embedded in retailer applications. It's kind of like the banking industry is gonna become invisible but it's gonna be pervasive. It's gonna become everywhere for your customers. Simon and our viewers watching have the recent mid size bank failures. Silicon Valley Bank signature Bank First Republic has that had any impact on business. Of course, of course, it has uh there is definitely uh the the the US consumer uh is facing uh a bit of a uh of a credit squeeze. I mean, if you, if you, if you look at the, the vast majority of us consumers, uh the vast majority of Americans, let's say 60% live paycheck to paycheck. And when they get in debt, they're dealing with 20% APR s and 7% inflation, that's 27% of every dollar is actually lost. So they're actually feeling it in terms of the banking industry itself. I think we have proven that we are resilient in terms of a broader financial system, but there's clearly a flight to quality, whether consumers looking at more stable banks or businesses looking at at at more stable banks. And that's something that is happening across our industry. So how does your company come in then Simon, in the wake of an industry that is seeing tighter credit? Of course. Yes, I mean, there's, there's many ways uh with, with, with helping, with helping retailers uh by offering point of sale financing, this is actually less of an increase in that burden than a credit card because a credit card actually gives you effectively working capital for consumers. You can go spend it anywhere you want while upon a sale lending, like buy now, pay later or any expansion upon a sale lending. You're simply extending debt for that specific transaction. So you're not increasing the debt stack on the consumer, you're just focused on that transaction and then you're just extending credit to that for that specific purchase. That is something that's done with, with, with, with, with Marta. And we've seen a lot of application of point of sale lending by now, pay later being one of them. So that's something we, we were, we're helping with. All right, Simon, Cola Ceo of Marque, a publicly traded card issuer and payments provider. Simon. Thank you.