What’s Happening in Payments Ep. 6: Quontic’s payment ring, Visa’s move into NFTs, and the new Square Stand POS system
- This week, we discuss why Quontic Bank decided to launch a contactless payment ring.
- We also talk about Visa's recent crypto and NFT-related activities, as well as Block's upgraded Square Stand POS system.
Welcome back to What’s Happening in Payments. I’m your host Ismail Umar, and in today’s episode, we discuss why Quontic Bank decided to launch a contactless payment ring, what Visa’s Creator Program tells us about its interest in NFTs, and what Block offers merchants with its upgraded Square Stand point of sale system.
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Listen to the full episode
Quontic Bank’s contactless payment ring
Quontic Bank is a small community bank based in New York with around $1 billion in assets, but it looks like the bank isn’t afraid to try new things or experiment with new products.
Around the end of 2020, it became the first bank in the US to launch a checking account that pays rewards in bitcoin. And just a few weeks back, it launched a tap-to-pay mobile payment ring, which customers can link to their checking account and use to make purchases at any point of sale terminal that accepts contactless payments.
Payment rings are not a completely new concept – they’ve been around for a few years in countries like Australia and the UK, but Quontic claims its product is the first-ever contactless payment ring on the US market.
The Quontic Pay Ring – as it’s being called – is only available for customers who have a Quontic checking account. The bank is offering the ring for free for a limited time, after which it will cost $29.
Quontic says the ring is water and scratch-resistant, and durable enough to get through daily use. Similar to a contactless card, the ring draws power from the NFC reader itself to make transactions. That means it runs without a battery and doesn’t need to charge.
The bank says you can make payments with the ring by curling your finger and holding it over a payment terminal, just like you would if you were going to knock on someone’s door.
I’ve seen some photos of the ring, and I’ve read up on some of its features – it definitely looks and sounds interesting. But the question is, how practical is it? And more importantly, does it offer enough to convince people to switch to a payment ring when they already have contactless payment options like cards, smartphones, and smartwatches?
I spoke with Steve Schnall, the founder and CEO of Quontic Bank, who says that Quontic is the first financial firm in the US to launch a payment ring. I wanted to hear why he chose to take on this ambitious project, what his thought process was, and what he believes a ring could offer that the existing payment options don’t.
Here’s what he had to say.
“Innovation starts with a spark — and that’s exactly what happened when we came across a wearable payment ring while at Money20/20 in Europe back in 2019. Two years later, that spark has led us to the release of the Quontic Pay Ring. There were a bunch of challenges along the way, given that Quontic is a regulated financial institution with traditional core backend systems. But, we pulled it off. I’m super proud of the team.
We haven’t seen any data that directly demonstrates the demand for a wearable payment device. We’re first to market, and we believe we can create the demand. Our ambitions are not to replace America’s wallet or smartphone. And while most banks seek to be “front of wallet”, Quontic’s ring will be the first “out of wallet” wearable payment device.
The Quontic Pay Ring is functional and fun, and can be used to make purchases ten times faster than via swipe or chip reader. It’s a new way to pay, and there are plenty of use cases where it can play a primary role. Some of the core demos range from avid runners and outdoorsy people to folks who are into fashion.
Since this is an initiative born from our spirit of innovation, revenue is not the primary objective for us. In fact, in the short term, it may even lead to a loss. But we’re okay with that, as long as we become the digital bank that got people into wearables.”
What Visa’s Creator Program says about its interest in NFTs
Visa has been pretty active in blockchain and crypto-related initiatives over the past year, and is now going deeper into the world of NFTs. The firm recently launched the Visa Creator Program, a one-year program that brings together a global cohort of creators and entrepreneurs involved in digital art, music, fashion, and film, who are interested in engaging with NFTs and blockchain technology.
Visa has developed the program in collaboration with former Major League Baseball player-turned NFT artist, Micah Johnson. It’s geared towards entrepreneurs who want to incorporate NFTs into their business model, whether they’ve just minted their first NFT, or have several drops under their belt.
The creator economy is one of the fastest-growing categories of small business, with an estimated global market size of over $100 billion. Visa says that around 50 million artists, musicians, and creators currently publish content as either a full-time or part-time source of income.
Visa’s program is focused on supporting these creators across five areas:
- Technical mentorship with Visa’s crypto product and strategy team on blockchain networks, smart contracts, and NFT marketplaces
- Exchanging ideas with a network of creators in different stages of their NFT journey
- Hearing from researchers and professionals working across digital commerce, Web3, crypto, and payments
- Engaging with companies across Visa’s network of clients and partners
- A one-time stipend to help creators fund their initial growth
Visa says the Creator Program is part of its ongoing efforts to digitally enable small and micro businesses to gain greater access to funding, resources, and expertise. But what’s in it for Visa? How does the firm itself hope to benefit from the program?
Cuy Sheffield, head of crypto at Visa, says that although the firm doesn’t have a direct financial incentive, it can use this program to learn how it can develop NFT commerce products, and position itself to support creators using NFTs to reach new audiences, products, and services.
The Creator Program is the latest in a series of initiatives that Visa has launched over the past year as part of its crypto strategy. The firm first revealed its interest in NFTs when it bought a CryptoPunk last August for $150,000. Sheffield said at the time that Visa purchased it to get a first-hand understanding of the infrastructure requirements for a global brand to buy, store, and leverage an NFT.
I spoke with Sheffield to get his perspective on the role that NFTs will play in the future of commerce, retail, and finance, and also the role that Visa sees itself playing in the future of NFTs.
Here’s what he had to say.
“NFTs sit at the intersection of commerce and culture, and to that end, we think they could play a critical role in the future of retail, social media, finance, entertainment, and more.
The rise of ecommerce has made it possible for SMBs to sell online and reach customers around the globe, but production and shipping of physical goods can bring high costs. NFTs provide merchants with the opportunity to harness public blockchains for producing digital goods, which can then be delivered instantly to a crypto wallet – providing a seamless commerce opportunity.
NFTs have the potential to become a powerful accelerator for the creator economy and lower the barrier to entry for individual creatives to earn a living through digital commerce.
Through our Creator Program, we hope to gain a better understanding of the opportunities and pain points facing creators, and explore the role that NFTs could play in accelerating their ability to monetize their work and build a business.
We’ve been exploring ways in which we can support the growing creator economy and are seeing a lot of interest from merchants and content platforms who are looking to participate in the NFT commerce ecosystem. We have some of the largest brands from around the world asking us about NFTs, and how they can participate and get involved in the space.
That’s why the goal of this program and other efforts at Visa is to support a new breed of entrepreneurs. There’s a benefit for both Visa and NFT creators to partner together, and we look forward to expanding into new opportunities as this industry continues to grow.”
Behind Square’s upgraded Square Stand POS system
First introduced back in 2013, the Square Stand is an iPad point of sale system that gives merchants a way to accept payments and access business insights and analytics on a single device.
Why did Square upgrade its hardware, and what exactly does the new device offer?
According to Alyssa Henry, head of Square’s Seller business unit, the upgrade addresses the evolution in shopping behaviors since the Square Stand first arrived back in 2013. She says the new Stand has been built with the future of commerce in mind. It provides sellers of all sizes with a versatile command center for their business, and it offers them an integrated way to meet the purchasing preferences of today’s consumers.
The two biggest new features in the Stand are built-in contactless and chip card payments, and a customer-focused checkout process that’s designed to be simpler and more streamlined than the previous version. The system accepts payments from all major cards, as well as Apple Pay and Google Pay.
In addition to supporting Square’s vertical point of sale offerings, which include Square for Restaurants and Square for Retail, the Square Stand can be used by sellers for their employee management needs, such as time tracking, shift scheduling, and tip management.
The new Stand is actually cheaper than its predecessor — users previously had to pay $169 for a Square Stand package that included a contactless card reader, but they can get the new Stand with built-in contactless payments for $149.
There are no account creation, installation, or contract fees, but vendors using the technology are charged a 1.75% fee per transaction by Square.