Interview | Matt Sloan | Head of Business Development at Discover Global Network

1. Please give us a little introduction on your current role and what you do.

Discover is a major Fortune 500 financial services company with essentially two parts. In the US, we run a full-service consumer bank offering a variety of products including deposit products, bank accounts, home loans and personal loans but our core business is cards and payments.

Our payments scheme, Discover Global Network, processes millions of cardholder transactions each day and is led by three Discover businesses: Discover Network, with millions of retail and cash access locations across North America; PULSE, one of the leading ATM/debit networks in the U.S. with 1.8M ATMs in 140 countries; and Diners Club International, a global payments network with issuance in more than 55 countries and acceptance in over 200 countries and territories. In addition, Discover Global Network has 25+ alliance partners worldwide that provide additional acceptance and issue their cards on the network. We have also recently expanded our partnerships in the alternative payments space and are working closely with many e-money issuers and processors in the EU.

My role is the Head of Business Development in Europe, the Middle East and Africa and I’m focused on expanding our network by collaborating with our major acquirers to expand acceptance and partnering with a wide variety of issuers.

2. What do you consider your biggest professional achievement to date?

The growth of the Europe, Middle East, and Africa region for Discover in the last 10 years.

3. There has clearly been a digital transformation in payments over the past 2-3 years; what are the key trends you are seeing?

We've all seen the effects of COVID at the point-of-sale (POS) firsthand. A recent fintech study* we commissioned, in partnership with 451 Research, uncovered digital payment adoption is widespread and it’s no surprise this was accelerated by the pandemic. We found that 78% consumers have used a digital payment service within the last 90 days. Further, nearly nine in ten (89%) consumers now have at least one fintech app on their smartphone and more than one in four (28%) have 3 or more.

With this digital acceleration, consumers become more willing to adopt new technologies. Both consumers and fintechs have a strong appetite faster, open, and embedded payment experiences. We found consumers are most interested in emerging technologies like real-time/instant payments (over 70%) and open banking (over 60%). Similarly, fintechs are indicating that instant funds (87%), open banking (77%), and embedded finance (75%) experiences are most relevant to their business.

However, security will be a key component to ensure adoption of digital and emerging payments continues at this pace. In our study, consumers ranked security as the #1 factor in deciding to use a digital payment service. To that end, nine in ten fintechs (91%) said payment data security is relevant to their business and are interested in partnering with a payments network to jointly develop solutions (65%).

These are just a few key trends but if you want to learn more, visit our Insights Hub where you can find several assets that highlight learnings from the study.

*Source: 451 Research, part of S&P Global Market Intelligence Global Fintech survey commissioned by Discover Global Network, 2022. All data mentioned in response refers to study.

4. Where are you seeing innovations coming from? The merchants? Fintechs? The banks or the PSPs?

While the perception may be fintechs are looking to disintermediate, we find there is a heavy reliance on the card payments ecosystem to evolve and innovate. With the pace of change, it’s impossible for a merchant, bank, or PSP to build everything internally and partnerships will be critical to deliver on consumer demands for digital and emerging payments.

One theme that arose in the study previously mentioned was the appetite of fintechs to partner – nearly nine in ten (89%)* fintechs say they are reliant on payments networks as part of their strategy and operations. As a network, our role is that of a connector and facilitator. With so much data flowing through the network, we can view with a macro lens and see trends as they start to arise. Many fintechs are looking to address a specific and precise consumer issue and to improve a particular experience or point of friction. The coupling of a fintech’s deep understanding of a particular consumer opportunity with the data and infrastructure a network can offer, end users (consumers) stand to benefit.

*Source: 451 Research, part of S&P Global Market Intelligence Global Fintech survey commissioned by Discover Global Network, 2022.

5. How is Discover Global Network looking to work in partnership with fintechs? Have you got any successful examples of this you would like to highlight?

Discover Global Network has long been known as a flexible and able partner in payments, willing to leverage our assets to assist partners in solving commerce challenges. If a partner has an opportunity where they feel a network, issuer, and bank can help, we are more than open to co-creation. In fact, much of the innovation with our fintech partners is “behind the scenes.”

At Discover Global Network, we are on a path to continuously improve the distribution of products, services, and capabilities to partners on their journey as they explore, engage, test, and ultimately scale with us. While you can expect Discover Global Network to be the same great and flexible partner, we continue our efforts to make it easier integrate with us – sparking even more innovation partners.

We partner with fintechs by providing expertise and capabilities in diverse areas of payments, opening opportunities for growth, and making connections with other businesses. One example in action includes our partnership with Mystifly to develop a payment and settlement solution to replace cash and bank transfers with card payments, specifically for air travel B2B payments.

6. The payments industry has come a long way in the last 3 years – how have you adapted your business to keep up with the demands and new challenges of your clients?

Discover offers a full-service international payments network and as such our partners get access to all the assets you would expect – tokenisation capabilities, EMV contact, contactless, mobile solutions, loyalty products, mass acceptance, etc. With the current pace of change in the industry, we are investing heavily to stay up to date with emerging technologies including transit, secure remote commerce, tap on mobile acceptance, and open banking. On top of that, we have reengineered our capabilities across a number of areas specifically to suit the needs of the fintech community with faster onboarding, tailored pricing, and different risk approaches.

7. What is the biggest challenge to finetchs in 2022 and how can they prepare for 2023?

The economic outlook means that investment is becoming tighter and expectations around getting to profitability are getting shorter. It also means that the pace of fintech acquisition is slowing and all together this might reduce the number of start-ups and level of innovation in the short term. Partnerships with payment networks, such as Discover Global Network, can help you scale, reduce costs, and outsource payment solutions while still growing your brand. You can learn more about how we support fintech partners here.

Emerging regulation across the globe in the fintech space may also represent a challenge. However, in the current cost of living crisis, the role of fintechs has never been more important. Increased competition that fintechs offer helps to reduce cost and provides alternatives for consumers and businesses. Many fintech sectors, such as gig economy and earned wage access solutions, are specifically focused on helping consumers manage their finances and will play an increasingly important role in helping manage the cost-of-living crisis in the future.