How Payments Powered the Connected Economy in 2021

Were we living in a connected economy before the pandemic rearranged everything? Yes and no. Smartphones and apps were solid, and online banking via desktop and laptops was common. We had smart speakers and smart homes, and there was no shortage of ways to connect.

With many requisite pieces in place, we weren’t yet living in a connected economy in 2019, but it was in the air. That year, PYMNTS first debuted the connected economy framework to describe the forces coalescing into a new ecosystem for living, working, playing and paying.

Timing is everything. Just as PYMNTS was introducing our audience to the connected economy concept, a global health crisis struck with an oddly specific set of concerns around touching things like ATM keypads, leaving dwellings or even being near other people. When in-person connections were abruptly severed, we innovated, rendering the great digital shift of 2020.

By mid-2021, the digital shift was quietly morphing into the connected economy. What’s the difference? It’s a great question, and PYMNTS posed it to some of the smartest people we know to produce The PYMNTSTV ConnectedEconomy Series, Creating And Connecting A New World.

As we look those responses, we’re struck by the consistency of vision and execution over time despite COVID-19 chaos. From A&O Hotels and Hostels to Vroom, 46 business leaders shared insights into the connected economy. What follows are highlights from a report that’s part playbook and part time capsule, as 2022 opens on a very different business landscape.

See also: The Connected Consumer In The Digital Economy

Travel and Hospitality

Airlines, hotels and businesses in their sphere continue to fight pandemic disruptions like almost no other sector of the economy. To get people on the move again, trust is a key ingredient.

Airbnb’s Global Head of Payments Sam Shrauger told Karen Webster that “the foundation for everything we do is trust — it’s trust that we’re going to meet their needs today, and be ready to meet the ones they — or we — haven’t even thought of yet that will arise tomorrow.”

Technology

Building trust with consumers and collaborators in a remote connected economy is a frequent theme. Though it’s fundamental to the connected economy, artificial intelligence (AI) is still new to many — and while its future is assured, AI will need to really show its stuff in 2022.

Sudhir Jha, senior vice president and head of Brighterion, noted that, “There is always some mistrust in new technology, and so the more [AI] can provide value, the more we can provide seamless experiences. Consequently, the more we can make the business commerce as good, if not much better than, physical experiences, we will have more and more adoption.”

Verizon Chief Revenue Officer Sampath Sowmyanarayan said 5G data throughput is critical to the connected economy, adding, “Typically, what happens, especially in mobile technologies, is that consumers get the technology first, and business drags along. This time, it’s fundamentally different. 5G is built for business, and the consumer is going to get pulled along.”

Healthcare

A savior of pandemic lockdowns was telehealth, the long-languishing video chat technology for physicians that struggled to catch on until a virus made in-person doctor visits all but impossible.

Of the many connected possibilities for his sector, Hill Ferguson, CEO at integrated virtual care provider Doctor On Demand said, “The biggest opportunity for our healthcare system is to try to figure out ways to reform the payment models, such that providers are incentivized to keep patients out of the hospital, off medications and away from chronic diseases.”

Healthcare payments challenges came with the pandemic, and Forward co-founder Rob Sebastian said misaligned incentives and payments flows were exposed by the pandemic.

Sebastian noted that healthcare firms should “build a database as though you’re trying to teach computers medicine, not how to bill insurance. Then you have a chance to actually be with someone in the key moments in their life and develop deep insight into what they care about.”

In the thick of pandemic action as one of the main vaccine suppliers, Johnson & Johnson’s Sarfraz Nawaz told Karen Webster, “Having deep expertise and a focus on execution from a technology standpoint is important, but then comes the culture side — being able to nurture talent internally while attracting new points of view. So, we are really focused on these foundational aspects that helped us progress faster through the last year.”

Payments

Digital payments benefited from pandemic disruptions by keeping money moving, virus or not.

Max Neukirchen, CEO of merchant services at J.P. Morgan Chase, told Karen Webster, “The important question that many merchants are grappling now with is how to design the digital engagement with their customers, because it is very important from a loyalty standpoint, but also … because payments actually plays a critical role in all of this.”

Taking it from another angle, Jim McCarthy, president of digital payment infrastructure provider i2c, said, “Whether you’re the marketplace or the super app, you’re going to build payments into the heart of what you’re doing … You can’t have a connected economy without payments at the heart of it.”

As PayPal CEO Dan Schulman sees it, connected economy payments flip the script and put consumers in charge.

“I don’t think we’re going to see people going to 20 or 30 different retailers to get all these different things,” Schulman said. “Retailers need to come to them. They need to address their individual demand curve, and their need for customized, personalized offers.”

It’s hard to imagine a connected economy without payments innovations like buy now, pay later (BNPL) — another pandemic era success story with a bright future.

Paidy founder and Executive Chairman Russell Cummer said, “We see that there’s a role for us to play, which is making people more and more comfortable with digital commerce activity by bringing things like subscriptions for digital goods and instant purchasing in terms of eCommerce and mobile commerce without having to jump into using a payment method that is kind of a bridge too far for some people.”

Retailing

Aside from grocery stores, the pandemic swamped many physical retailers, but even those that had issues before COVID-19 — malls and department stores, for example — see a connected life.

Mall of America Executive Vice President Jill Renslow told PYMNTS that for physical retail, the connected economy is a chance to “Take risks, try new things, don’t be afraid to fail.”

“When you fail, you’re pushing yourself, your team, your company, to try new things,” Renslow said. “And no matter what happens, you’re going to learn from it. And it just makes you stronger. Consumers are looking for that — they’re expecting change, they’re expecting new things.”

Few storylines were more closely followed over the past two years than the digital transformation of restaurants into hubs of connected economy activity.

Chipotle Chief Restaurant Officer Scott Boatwright told Karen Webster that “we’re working to take it beyond a commerce platform, to an engagement platform, where when you come into our program, we can tokenize your experience and then tailor the experience specifically for [you] ... You feel like the brand is talking to you personally and meeting your needs in a really unique way … [which] I think is a core competency of our organization.”

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