Scott Purcell, CEO and Chief Trust Officer of Prime Trust shares his thoughts on the core challenges still affecting businesses when it comes to digital payments and processes in this chat while talking about his views on the evolving global fintech space:
Welcome to Global Fintech Series Scott, tell us about yourself…
I’m a serial entrepreneur who’s had both wonderful successes and heartbreaking failures. I have a lot of history and experience in the securities and internet industries, having started numerous broker-dealers, a trust company that serviced broker-dealers and their institutional fixed income clients, one of the world’s first commercial internet service providers, and a music encoding and streaming businesses. These all led to my current FinTech endeavors of Prime Trust, which provides financial infrastructure to fintech innovators, and Banq, which is a next-generation mobile banking app built specifically for business payments. Work is my passion, but I also strive (not always successfully) for work-life balance with my family, which includes frequent long weekend skiing and hiking in Park City.
What are some of the biggest payment trends in business to business that you’ve been following the last few months?
Naturally the world has turned to contactless payments in a huge way. That has accelerated the adoption of mobile payments. It’s also opened the door for alternative payment methods, including cryptocurrency. This will continue to grow fast in 2021 and opens the door for continued innovation in payments.
How do you feel payment platforms are set to evolve with the impact of new digital coins, currencies and changing user needs?
We are seeing more and more payment platforms tie into Prime Trust infrastructure, especially for acquiring cryptocurrency (converting fiat into crypto, and crypto into fiat) and using it to settle transactions. Banks and payment systems that don’t adopt crypto as a payment method (in addition to their existing offerings) will fall behind and lose customers at an accelerating rate to innovative platforms who are happy to eat their lunch. The old guard, as is normally the case in transformative times, will either be too slow to embrace the new technologies and quickly cede marketshare or will acquire fast moving start-ups and thrive. 2021 is going to be an interesting year with a lot of M&A activity and shifting leadership positions in the payments space.
What are some of the challenges you still see in direct digital payments today in business to business?
There are numerous challenges. The biggest are…
- Legacy core accounting systems don’t support the level of precision needed to avoid “drift”, which is 18 decimal places; you simply cannot enter the crypto world without this as your accounts will never reconcile and you’ll never be able to report truly accurate positions.
- Blockchain settlement times make it impossible to accept direct-from-wallet transactions. Fortunately several custodians, including Prime Trust, have created technology that enables merchants to settle transactions instantly with no risk of market volatility affecting the price/value of the transaction.
- Liquidity is a challenge, especially for merchants who don’t want to hold crypto directly given the volatility. Coinbase, Prime Trust, and others have technology now to instantly convert Bitcoin (and other crypto currencies) into dollars, Euro’s, Pound Sterling and other currencies as needed by merchants, and this will help drive forward the adoption of crypto as a valid, usable payment method.
Can you share a few thoughts on some of the most innovative payment platforms from around the globe that are making a mark?
We are seeing new generations of payment platforms arising to service many industries and pain points. These include industries that are neglected or disrespected by traditional banking such as Cannabis, adult, firearms, and gaming, as well as the unbanked population around the world. Many of these have already started to get some traction in 2020 and will accelerate in 2021.
We’d love to hear your thoughts on the global fintech startup marketplace- can you talk about some interesting global startups making waves?
Let me just say that over the past decade we’ve seen innovative fintech firms such as Robinhood, Betterment, CashApp, Stripe, Acorns, and many others who significantly disrupted the status quo…we are now seeing a new generation of fintechs who are doing the same thing in payments and financial infrastructure.
As global fintech trends change and the market shifts due to business environments (and also Covid-19), what are your comments on the state of fintech in 2021 and beyond?
This is a historically opportunistic time for fintech in general, payments and infrastructure specifically. There will be a traumatic change in 2021 for old-guard businesses who won’t or can’t adapt, and tremendous opportunity as a next generation of fintech success stories emerge. Our capital markets will be fundamentally changed by crowdfunding and Alternative Trading Systems (ATS) for private securities (and real estate), our payment systems will be transformed by digital currencies, and banks will be displaced by mobile and API-driven technologies (often called “neo-banks”).
We’d love to hear about some of Prime Trust’s upcoming plans and innovations?
Prime Trust is one of the only financial institutions that can provide the full range of infrastructure needed by these next-generation fintech innovators, and we intend to continue to press our advantages. Our core accounting system, capable of holding assets to 18 decimal places, has a never-ending roadmap of new features in the queue, we’ll be rolling out a debit card program so our API-integrated customers can offer branded cards to their customers using both cash and cryptocurrency, including both conversions and lending, we have new plug and play widgets such as CoinRamp and Banq that help accelerate our customers launch times, and we have a number of regulatory endeavors planned for the US, Europe, Asia and Canada.
Before we wrap up, a few biggest learnings that you’d like to share with fintech innovators and leaders?
Read “Start With Why” by Simon Sinek. I’m seeing quite a few “me too” start-up’s, including ventures of huge businesses, that are likely destined for failure because they don’t understand why they are in business. Success depends upon an entrepreneur’s ability to fully think through their value proposition and understand exactly why customers will embrace them.
And don’t be afraid to partner with firms who you may view as competitors. “Coopetition” is the future of business, especially fintech. Nobody can do it all, markets move too quickly and software takes too much time to write. The old adage of “a rising tide floats all boats” applies to every industry, and it will lead to some awkward relationships that ultimately lead to mutual success…embrace it.
Prime Trust provides financial infrastructure to fintech innovators with API-driven services including financial accounts, trust, custody, escrow, AML, KYC, payment processing, counterparty settlement systems, cash management, and compliance for apps, payment gateways, exchanges, OTC desks, issuance platforms, broker-dealers, investment advisers, portals and others who are building businesses that are changing the world.
Scott Purcell is the Founder & CEO of Prime Trust, the technology-driven trust company and of Banq.com, the mobile payments app.