The world of payments has undergone a seismic shift in recent decades, trading cash, coins, cheques, and money orders for an increasingly digitized financial landscape. Many countries, like Sweden, are on the verge of becoming cashless, with cash representing only 2% of transaction value in 2022. The US has been relatively behind other countries, but fintech and payments practitioner Rishi Munjal is determined to play his part in bringing the US to the forefront of payments innovation. Munjal's unique point of view on the payment and fintech ecosystem is shaped by his hands-on experience.
A Practitioner at the Intersection of fintech, Payments, and Strategy
Munjal's academic and professional trajectory provides a clear roadmap to his current expertise. His foundational education in engineering at Banaras Hindu University and subsequently his higher education at the University of Texas at Austin prepared him for solving problems in the fintech and payments sectors that are often complex and ambiguous, and in need of creative solutions.
He spent the early part of his career building technology solutions when the fintech ecosystem was in the early stages of its evolution during the dot-com era. He dove full-time into the financial services sector amidst the recovery from the subprime mortgage crisis, where he aided banks in grappling with the fallout. He subsequently enabled some of the largest mergers and acquisitions, the launch of new products, and new market entries for banks, financial services, and fintech companies.
Later, his focus shifted to developing and executing payment strategies for corporations, giving him hands-on experience across all parts of the payment value chain and experiences that shaped his pragmatic point of view for the future of payments. He has represented his organization at the US Faster Payments Council and is part of a Federal Reserve working group (FedNow Request for Payments Workgroup) shaping the launch and adoption of faster payments in the US. His contributions towards reimagining bank bill pay in collaboration with The Clearing House have triggered investments by the largest banks in the US to modernize their payment systems.
The Future of Payments from the Eyes of a Practitioner
The consumerization of financial services and payments has been unfolding for decades as customers seek speed, convenience, and transparency in commerce. The changes and expectations have become part of customer behavior. Munjal shares that "The future of payments as an experience is going to be increasingly frictionless, seamless, and invisible." This is apparent as people increasingly see examples where customers consume a service (e.g., Uber) without having to think about payments. The trend in the long term is likely going to trickle down to business-to-business payments that typically lag consumer payments.
Alternative Payment Options
Contrary to many others in the industry, Munjal doesn't think there is gloom and doom for traditional forms of payments in the US. "An estimated 4.5% of US households are unbanked, the majority are likely unbanked by choice." This means that a complex market like the US will need to support cash as a payment instrument for the foreseeable future. Having said that, Munjal strongly believes in a future where consumer choice will continue to drive merchants and corporations to offer alternative payment options. Other developments towards a cashless society, like Central Bank Digital Currencies (CBDC) in the US, are in their infancy and haven't received unequivocal support from the Federal Reserve.
In a published thought-leadership article, Munjal takes an optimistic view of the future as he discusses the impending launch of a new instant payment system called FedNowSM by the Federal Reserve. This system is designed to handle real-time money movement and includes tools to prevent fraud and address payment issues. It also has a function called "Request for Payment (RFP)," which allows users to request money from others. According to Munjal, this is one of the many foundational innovations that will shape payment systems and customer choice.
Seamless Mobile Payments
Munjal believes mobile devices will continue to play an increasingly dominant role in the future of payments. With the proliferation of smart devices and the continuous improvement of mobile payment technologies, the days of physical wallets could be numbered. "The pandemic significantly accelerated this trend globally, including in the US. As of 2022, over 95% of new payment terminals in the US are enabled to receive contactless payments, and 20% of all credit and debit card payments at the point of sale are contactless."
This, according to Munjal, amounts to a behavioral change in consumers that would have otherwise taken five or more years. Munjal predicts a future where mobile payments will become the default transaction method for the vast majority of consumers. This shift will be facilitated by innovations in near-field communication (NFC), secure mobile wallets, and enhanced user experiences through intuitive and user-friendly payment applications.
Cryptocurrencies and Blockchain
Unlike others in the crypto industry, Munjal does not believe crypto can function as "currencies" and are unlikely to become a part of day-to-day transactions. "I can see how cryptocurrency may be acceptable as a form of payment in countries where citizens have a high degree of distrust in the local financial system. While there are headwinds, the stability of the dollar, its position as the reserve currency, and trust in the US banking system are unlikely to change in the near future." Munjal, however, sees potential in specific applications of cryptocurrencies, such as "Stablecoins", and their potential to be a solution to issues with cross-border payments.
To make this happen, Munjal shares how major regulators continue to take advanced actions to bring needed regulatory clarity to the Stablecoin space. He shares, "It is becoming increasingly clear that the evolving regulatory stance on Stablecoins aims not to stifle innovation but to create a safe and transparent environment for their application in payments."
Shaping the Future of Payments
In the last several years, Munjal has been on a quest to enable some of the most fundamental payment modernizations happening in the US. By influencing the evolution and adoption of faster payment options and improving cost and revenue metrics for corporations, he plays an important role in shaping the future of US payments.
Munjal's in-depth understanding of payment trends allows him to guide C-suite executives in data-driven decision-making, impacting their organizations' strategy and execution. As new payment options emerge, business owners can certainly benefit from his guidance in integrating these innovations into their operations.
In an increasingly dynamic payments environment, Munjal's expertise becomes more crucial. Whether aiding clients in entering new markets, launching new products, developing payment strategies, or executing large transformational payment programs, Munjal's insights are instrumental in driving success.
