The Evolution of Digital Payments: Insights from Mohit Kansal

These days, using Venmo to split a dinner bill or Apple Pay to buy a coffee has become second nature. However, just a decade ago, most of us were reaching for cash or credit cards, not our smartphones. The rise of digital payment methods has transformed how we conduct transactions, and industry experts like Mohit Kansal are at the forefront of this evolution.

The Slow Rise of Digital Payments

“When Google Pay and Apple Pay were just starting, it took a really long time for them to take off,” says Kansal, senior vice president of global payments and payer services at Flywire, a Boston-based global payments enablement and software company. He emphasizes that the financial technology sector has matured significantly, moving from skepticism to widespread adoption.

The Current Landscape of Fintech

At the recent 2024 MIT Sloan Fintech Conference, where Kansal was the keynote speaker, he highlighted the dual nature of the fintech landscape: it’s both challenging due to heightened regulatory scrutiny and exciting because of endless innovation. As digital payment methods become more mainstream, the industry faces pressure to innovate further.

Regulatory Scrutiny: A Double-Edged Sword

Fintech companies, much like traditional financial institutions, must navigate a complex web of regulations. Kansal points out that for fintechs operating across multiple jurisdictions, compliance becomes even more complicated. “Fintechs will not be successful if they don’t pay attention to regulation and figure out how to make it work in their favor,” he asserts. This creates a demand for professionals who can balance compliance with business success, making job prospects bright for those with expertise in both areas.

Security and Compliance Challenges

Ensuring secure and compliant transactions is paramount for companies like Flywire, which handle large and complex payment transactions in sectors such as global education and healthcare. Kansal stresses the importance of safeguarding customers’ personal details, especially as fintechs often store sensitive financial information. The stakes are high, particularly in a landscape where data breaches have surged due to various cyber threats.

The Focus on Cross-Border Payments

Kansal notes that payment digitization is gaining traction globally. Countries like India and Singapore are innovating in the payments sector, with regulators actively participating in this transformation. Flywire’s partnership with the State Bank of India aims to digitize cross-border payments for students, providing a fully digital checkout experience. This trend reflects a broader movement where innovation is no longer limited to small tech companies; even larger financial institutions are now stepping up.

Expanding Beyond Consumer Payments

While much of the current digitization focuses on consumer and e-commerce payments, Kansal highlights that invoice-based payments still lag behind. Many contractors continue to rely on paper checks due to security concerns and the complexities of cross-border transactions. The right invoicing software can streamline these processes, making it easier to manage payments across different currencies and regulations.

The Role of Artificial Intelligence

Artificial intelligence (AI) is poised to revolutionize the fintech landscape, driving efficiencies and enhancing customer experiences. Kansal mentions that Flywire is already leveraging AI for various applications, including personalizing payment options and enhancing fraud detection. While fintech is still in its infancy, the potential for AI to create significant impacts is immense.

The Future of Fintech

Despite the progress made, Kansal believes that fintech has yet to experience a revolutionary change that significantly alters the industry. However, he remains optimistic about the promise of technology and its potential to improve financial services for everyone. As the landscape continues to evolve, the integration of innovative solutions will undoubtedly shape the future of payments.

For those interested in the dynamic world of fintech, the insights shared by Mohit Kansal provide a glimpse into the challenges and opportunities that lie ahead. The journey of digital payments is far from over, and as technology advances, so too will the ways in which we conduct financial transactions.