Kelley Knutson first took a job overseas as part of a "temporary" six-month assignment back in 1989. He ended up remaining based outside the United States for almost 29 years.
When he made the decision to return stateside to lead the consumer solutions segment of Global Payments, aside from believing wholeheartedly in its mission, he knew he could bring back greater insight, objectivity and diversity from his career abroad.
"You learn a lot through travel and by being in situations that, quite honestly, make you uncomfortable, or that you have a hard time understanding. That gave me a lot of empathy and openness to see how different people view similar situations," he says. "Still to this day, it's been one of the most satisfying things I've ever done in my life — putting down flags in new countries for the company, fostering new relationships and creating value in payments."
A 30+ year payments industry vet with past leadership roles at Clear Money Ltd., GE Capital and Visa International, Knutson now serves as senior executive vice president and president of Netspend a Global Payments company. He has been charged with leading Netspend through the vast (and yes, complex) changes in the prepaid sector.
Recently, Knutson sat down to discuss a range of topics on his radar, including segmented spending, financial health, the new 'top of wallet' status, and what the payments industry owes consumers.
Here are five highlights from the conversation.
01 on why 'default payment' status is the new 'top of wallet'
Issuers spent decades vying for 'top of wallet' status. These days, the ultimate achievement is 'default payment' status. Think of logging into an app like Seamless or Uber and needing to select a payment method. If you're an infrequent user, maybe you chose your debit card. If one of your cards had a promotion or double points offer, you probably selected that card. These are becoming classic examples of instinctive 'next-level value creation,' says Knutson.
"Clearly a lot of what motivates consumers is accruing points or other benefits from using a certain payment card or getting rewarded for repeat loyalty spending at a merchant," he says. "And that's what can take a card from the back of the mobile wallet to the front, driving repetitive transactions and greater value for consumers. You'll see a lot more next-level value creation in the future."
02 on the limits of research
Knutson feels strongly that consumers are often not given enough credit for how they view and plan for their financial lives. Primary user research, whether conducted by Netspend or by groups like CFSI in its Financial Diaries project, give a close-up glimpse of the actual trade-offs people are making in their financial world.
"A lot of times, especially in today's global political climate, people are listening to high-level metrics or putting things in simple buckets and generalizing," he says. "It's not until you sit down and hear an individual or family story that you realize what kind of choices people are really making to survive and move up the social and financial ladder."
03 on segmenting our spending
More and more people, says Knutson, are choosing to compartmentalize their day-to-day payments activities. In the past, there was a push toward simplification and funneling funds in one place. Now, the trend is toward specialization, bucketing and segmentation.
"I have 11 apps on my phone that have some form of value in an e-wallet — Starbucks, public transit, pharmacy," he says. "With the explosion of apps, consumers are segmenting spending and moving smaller portions into multiple places more than ever before. This is great news for the prepaid industry because that's where we can thrive. We have the platform, risk tools, distribution and customer insight to enable this level of segmentation and compartmentalization."
"Those of us in fintech have an obligation to address the harmful spending patterns that could derail consumers' long-term financial health."
04 on what companies owe consumers
Payment apps have been powerful tools for people who want to make purchases quickly and frequently. But Knutson notes that these spending patterns might come at a cost — namely to the very consumers that fuel them.
"Those of us in fintech have an obligation to address the harmful spending patterns that could derail consumers' long-term financial health," he says. "Yes, we need to offer streamlined ways to pay. But we can't forget tools like budgeting and savings tools, as well as educational resources such as blogs and videos." That greater transparency will ultimately mean more confidence and financial savviness for consumers, Knutson says.
05 on favors from fintech
Sure, artificial intelligence, APIs and other new capabilities will be game-changers for payments. But Knutson believes the disruptive fintech companies are shining a spotlight on the front-end customer experience.
"Many legacy payments players have been focused on the back end, the infrastructure, scaling efficiently and making things secure. New entrants are putting their energies into the front-end and the customer interaction," he says. "Legacy players know regulation, risk, security and scale. New players know customer journeys, frictionless interactions and how to leverage data. The real value is in blending these two mindsets to build on each other for a complete end-to-end customer experience."