1003. News: SWIFT embraces blockchain, JP Morgan ditches Nutmeg and what do digital IDs mean for fintech?

28:54benefit from in the UK is a very open and discussive relationship between the private sector and our regulators and policymakers. Now, announcements come and go, you know, there's the drum roll and then there's the next day. And when we start to get into the weeds of this, when some of the practicalities surface, a lot of those unintended consequences and implications may become apparent. And I think if we take the same approach to what we have been doing with the likes of open banking, with the likes of the National Payment Vision, and actually really ensure we've got that public-private partnership, I think we can nudge this in the right direction.

29:42And Stephen talked about sort of criticality of access. We've got things to kind of look left and right on for that that mean we don't have to build from scratch if you think about sort of payment systems access and what we have around sort of pond and making sure that people aren't unintentionally locked out of their abilities as an organization to access the system those are things that could be replicated in a slightly different model for digital identity than what the government has set out so far. Thank you. And Sam, just quickly, you made the very good point when we were talking about Swift's blockchain plans, that it was creating potentially some quite big surfaces for fraud.

30:31In principle, do you think a sort of single government controlled system is more secure? Or do you think actually it's better to have a bit of redundancy of having sort of lots of private wallets and private ID systems drawing on central system. Is there, do you see a security angle on this? Yeah, it's definitely a good question. I think centralization is always going to bring a security risk. It always happens and decentralization kind of spreads the risk across multiple parties. I do think that it's inevitable that certain parts of the data identity will be centralized in a government scheme.

31:14I just think that that's what different countries are tending to. And in one way or another, it would probably happen here in the UK. The question is, how can user-centric permission and security be implemented in a way where the user is always in control of what information gets shared with whom, both when, especially when private entities are requesting access for that information, how transparent is that process and that permission structure, and how is that communicated in the user experience. I think it's not devoid of risks, and that's something that needs to be taken into consideration.

31:56But I think it's just something that will happen and that we'll have to deal with. There's a lot of work then for the UK's regulators to do to really think through exactly how this is going to work. Okay, well, on that note, we're going to take a quick pause here and we will be back very shortly.

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33:472025 in Großbritannien und der EU.

34:16charge. We partnered with Enfuse, the next generation issuer processor powering card programs and payments for both banks and fintechs, to dig into what it really takes to win. Catch the episode now, it's on the same feed as this one. And now back to the news. Our next story is that Paygentic has unveiled AI-first payment infrastructure for next generation applications. Paygentic positions itself as the payments and billing infrastructure tailored to modern AI-driven apps, addressing challenges that traditional billing systems can't handle. It offers a single platform that combines flexible pricing models, such as usage-based, outcome-based, and hybrid, real-time balance enforcement through wallets, and integrated payment processing.

35:02The system enables instant checks on usage, prevents overspending, enforces limits, and delivers live analytics and dashboards for both the provider and end users. By providing one API and consolidating billing and payments, Paygentic aims to reduce engineering complexity and allow builders to focus on core product features. So Sam, it's really great to have you here to tell us more about this launch. Can you tell us a little bit more about some of the problems that Paygentic aims to solve, that established infrastructure is struggling with? Definitely. Thank you very much for mentioning this on the show.

35:39Yes, so we started Pagentec with the aim of helping new companies meet the challenges both around billing and payments that new agentic applications are bringing to the table. So what we see in the industry is that there's basically a new category of software, which we call agentic applications, agentic software, that is paid for and consumed in ways that I haven't seen before. whereas SaaS models introduce monthly subscriptions. Some usage-based billing would generally reconcile at the end of the month or at the end of an annual contract and with not that much variability. What we are seeing now is software consuming other software, making decisions on the fly and needing much more data on the cost of those actions.

36:30For example, we have customers that are selling financial data to agents, things like life prices, historical prices on stocks. But they don't know in advance which data sets are going to be accessed, how they're going to be accessed, and what agents are going to do with that. So they need to, in real time, give these agents accessing the platform a budget, have the agent be aware of the budget that they have while they're doing actions on the platform. Each event has to be priced in real time. You cannot wait until an hour or until the end of the month to decide how much that was worth because the agent or the company driving that agent needs to know at that moment if they're within budget or not.

37:15And the margins, whereas before the SaaS margins were traditionally very big, now with the introduction of LLMs, those margins are being reduced drastically. The LLMs are a big part of the cost of these new software products and therefore spends needs to also be controlled much more. So what Pejentic aims to do is to create these payment experiences for this new era of software and to help both merchants and consumers monetize their applications and pay for these applications. There's another example. There's a lot of pain points around managing the expense when it's variable. So CFOs that are consuming these products have no visibility into what's going to be the end of month cost.

38:05Sometimes they have to wait until the end of the month to realize. Engineers also don't have the tools needed to predict spend. So what we're doing with Pagentic is bridging that gap between the merchants and the consumers, providing both the billing and the payment tools in an integrated platform. There's lots of billing, usage-based billing, outcome-based billing software out there. A lot of it coming from the UK, by the way. There's been lots of innovation here, but many times they lack the payments aspect. Merchants have to then integrate with a payments provider and kind of stitch both of them together.

38:38What we aim to do with our platform is add, let's say, a payment wallet functionality on top of the billing so that merchants get a complete solution with our platform. So, yeah, it's been an amazing journey. We are just launching out of Stealth this week and we've been working with a number of design partners and now we are onboarding the next phase. So, yeah, super excited to be here. I've been meeting customers before coming here. and we are ready for the next phase of the business. Well, congratulations. It's a pretty complex problem that didn't even exist five to ten years ago. Stephen, I'd love to bring you in and Samantha too.

39:20But Stephen, I imagine this is sort of somewhat up your street, you know, this sort of whole topic of sort of programmable payments and the sort of concept of sort of AI agents and so on starting to act autonomously. What do you think of this? Yeah, look, I think if you look at kind of, I'm going to draw a parallel to what we're seeing in like the crypto native space, you actually have like AI based orchestration around things like stable coins today, right? The idea that you would tie an AI agent to a wallet, and that that wallet would then be able to allocate capital based off of different trading strategies, etc.

39:56within the space. You're seeing that on the basis of like AI-based fund management, right? So AI agent then being able to allocate capital for effective trading to execute fund strategies, right? I think it's only fair that you then start to see that in the basis of how people interact on a commerce level. And so, you know, this idea that, you know, basically as you're bringing money on chain, right, the ability then to take advantage of tools on chain becomes a much easier basis to solve right and it's one where you can tie in the orchestration and the programmability in a way that really provides utility to the user and I think that's really interesting and one can only think about the different kind of user experiences that then start to get created the transparency around information but also the ability to really scale right I think We always hear about these companies nowadays that are using AI with two folks to be able to then develop businesses with a few million dollars worth of ARR all at once.

40:58And so you can think about for anyone that has a really interesting idea, access to money on chain and ability to really leverage AI, they might be able to build competing businesses in a space to really solve problems and scale them at a level we haven't seen previously. And I think that's really what's exciting from an innovation perspective. and that's what the technology will allow people to do. Now, obviously, things like regulation will come into play and what that means, but at the moment, it's a bit of a white space to really be able to explore. Really interesting. Samantha, what's your take on this?

41:32Yeah, so I've been talking increasingly around possibilities in the landscape of agentic commerce and payments. And I think this is quite interesting because you are looking at one of the solutions where you are not just leveraging AI to tinker around the fringes of existing workflow. You're doing pure play reimagination. And that's where you do really get the sort of value add and the competitive advantage that I think is going to make a difference in the future. And I think to echo what Stephen's talked to, a lot of this agentic technology has the opportunity to democratize a lot of financial intelligence and guidance that for a long time has been the purview of those that can afford the advisors, the consultants and you get that in your pocket as an SME going forward in a way that's really powerful, understanding how to optimize your working capital, how to best manage your cash flow.

42:41That wouldn't have been possible 10, 15 years ago. So it's not just a game changer in terms of how it could alter the value chain in the ecosystem itself for payments. It's those end customers and consumers and businesses and what it can do for them in terms of upping their financial literacy, financial management and business management. And that's really exciting because, again, you know, the story from the government is gross competitiveness. So we really want to push ahead with solutions like this. Thank you. Sam, what's next for pageanting? Coming out of stealth is fantastic. What are your plans?

43:25Where are you hoping to sort of grow? Where are you hoping to go next? Yeah, definitely. Right now, our plan is to grow in terms of customers acquisition. We want this solution to reach everywhere. Right now, our main markets are Europe and the US. We've partnered with a number of regulated payment providers, but we are in the process of seeking our own internal regulation to basically be able to expand our operations. And, you know, our dream, not our dream, our objective, our mission is for PageAntic to be the default platform for software monetization in the agent's agentic space within the next years.

44:06So that's what we're driving for. That's our plan. And so if you know of anyone trying to monetize an agent and a agentic software, bring them our way. I think there's probably quite a few listeners who are doing exactly that kind of thing. So So fantastic. Thank you. Congratulations. Well, let's move on to our next story, which actually stays in the same area of AI and payments. So our next story is that OpenAI and Stripe have partnered for ChatGPT payments. So they are partnering to enable American ChatGPT users to make purchases directly within the chat interface, initially offering single item purchases from Etsy merchants.

44:48The integration uses the Agentic Commerce Protocol, ACP, an open standard developed by Stripe and OpenAI, designed to facilitate seamless and secure transactions between AI agents like ChatGPT and merchants. Stripe has introduced shared payment tokens, which allow ChatGPT to initiate payments without exposing customers' full payment details, so increasing security. And the Agentic Commerce Protocol, ACP framework, provides a standardized way to engage in agentic commerce while retaining control over payment systems, customer relationships, and existing infrastructure, enabling a smooth transition to AI commerce.

45:35Sam, it does seem kind of logical to start with you first, particularly your field. Is this a big deal? is the ability to buy products directly through ChatGPT. Is that the future of e-commerce? Is this the start of the future? I think this is a massive shift in the industry in ways that we're only going to see in the coming year as this gets adopted. We've seen how, let's say, for example, search. Before, people used to go to Google for searching and you used to click on the link, read a website. Now, a lot of people that I know, myself included, don't use Google for most of their searches anymore.

46:17They use Perplexity, they use ChatGPT, they use Cloud, and everything gets filtered through this new interface. So that has happened with search, with information. Now we're seeing a similar thing happening, a similar shift with where do you buy things. So I think it's very probable that things like Shopify or Amazon might become backend services that take care of fulfillment. They take care of actually having the stuff that you buy in their storage, in their warehouses. But you might never go to Amazon again, or you might never go to a Shopify storefront again. You might just go to ChatGPT, type in what you're looking for, and then buy it directly through ChatGPT.

47:01It's very interesting. It's also kind of scary. The power that a platform like ChatGPT, like OpenAI will have if this happens is it's just unimaginable. There's a lot of questions around how will they rank results? How will they decide what recommendations are going to be shown to you and what recommendations will not be shown to you? There's a lot of... That's a lot. There's a lot to unpack here, isn't it? Samantha, help us unpack it. Is this an incredibly smart move by Stripe? Is this incredibly scary, as Sam says? What do you think? I mean at this stage of kind of diffusion of innovation I think everything is equal parts exciting and scary depending on which way you look at it but it was broadly par for the course obviously we've had announcements out of Google over the past year most recently and their protocol but before that their view that they were going to become an engine of intent rather than search And we know, obviously, the difference between agents and bots is that agents are there to focus on outcomes.

48:07So intent is super important. I think for me, what I'd like to start see surfacing, if I were to consider this in the landscape of, you know, regulated financial services, is all of the things around consumer duty, financial literacy, the things that we need to be thinking about to make sure that we take this journey whereby we're leveraging the technology in the ways that consumers want to interact, but we're supporting them to do so safely. So looking at things like programmable spend behavior, how does the individual retain agency even when the agent is doing certain actions for them? And that is actually really, really critical.

48:53and I don't know how you would meet sort of certain requirements without it. So those things still need to kind of surface a little bit more for me. And you might say, okay, Sam, these things mature over time, but actually the consumer behavior and expectations gets locked in surprisingly quickly. And then it's really, really hard to shift. You think about things like APP fraud, despite the millions of individuals, and the millions of pounds that have been lost to that, the challenge that organizations have to get their customers to accept degrees of friction and then still act in a psychological moment because everyone worked in a space where we were just used to clicking to get a thing done and not stopping to think.

49:43So I think we just need to step into this, acting as if we are already at scale when we're thinking about what we're launching. Thank you. Stephen, last word to you on this story. What do you think? OpenAI and Stripe, scary, brilliant, bit of both? I think for Stripe, it's brilliant, right? Their payments orchestration, right? And, you know, if you're thinking about what you want to do here, you want to enable ease of use, right, across the board. I think for OpenAI, it's creating a new mechanism by which people start to interact with shopping and shopping experiences, right? I mean, if you think about it today, what makes, you know, some of the top-end stores unique, right?

50:31You can think about Chanel and Hermes and all that is that you have someone that creates a unique experience for you about what you want to do and how you want to shop. I think if you think about what you're doing in this open-air concept, people already use the idea of asking ChatGPT for suggestions around the board, I think to Sam's earlier point. And now you're able to start to create unique experiences like what should I buy for X amount for my five-year-old niece? That was something I didn't think about before, but imagine the basis that you could ask that into ChatGPT and based off of a unique set of stores, it could suggest a set of things and then automatically pay.

51:07I think that changes the expectations to Sam's point of what experiences look like and how easy it is to change consumer behavior. I think what's concerning a little bit is kind of the speed at which this is happening in some ways, right? Because, I mean, you really think about how much, you know, Payment services and banks have to think about things like fraud and all those different components. There's no KYC on ChatGPT, right? And so think about the basis today, which is I'm enrolled in ChatGPT Premium. My credit card is already there. There's no verification basis to say that when someone types into my phone or into ChatGPT, we can manage that.

51:47Now, there's a security basis to make sure it's actually for my account and secure payment, but not the experience behind it, right? So I think there's a lot to think about, right? I mean, I do think, you know, you're probably going to see tie-ins eventually to like, again, what I'd say is like digital money on chain and I'll bring that back, which is eventually you're going to have a wallet. That wallet is going to have a unique digital ID, right? That digital ID is accessed only through some like cryptographic or biometric basis. And then that's tied to then an interface or interaction that you'd have with a platform like ChatGPT, right?

52:18And then you create more of an end-to-end secure border, but still have like the same output in terms of experience. So I think, you know, technology is evolving in such a way that we can start to, you know, still have, you know, innovation but, you know, increase some of the friction in a purposeful way, right? Hopefully over time that safeguards consumers because I think that's going to be a big thing over time that regulators will have to consider and have to, you know, solve for. Indeed, I feel like that's the theme of this show is there's a lot of work that the regulators need to do. So on that note, let's take a quick pause here and we'll be back very shortly.

53:04Okay, now for a quick look at one more newsworthy story this week that we don't have time to cover in full, but we think you'll find just as interesting. Which is that JP Morgan is ditching its nutmeg brand in a digital wealth revamp. So JP Morgan is going to phase out the nutmeg brand in the UK, replacing it with a unified offering called JPMorgan Personal Investing. The new platform will include a do-it-yourself investment service, shares, bonds and funds, and digital tools, as well as relationship managers for clients with over£250 ,000. Nutmeg, which was acquired by JPMorgan in 2021, has struggled to turn a profit, incurring tens of millions of losses in recent years, despite growth in assets under management.

53:45The move reflects JPMorgan's ambition to become a major player in UK retail investment and take advantage of regulatory changes allowing broader access to investment guidance. So this news is sad in some ways because Nutmeg was one of the sort of early original cohort of British fintechs and in many ways very successful in trying to create a wider market for investments, trying to make it easier for people to feel confident about building and managing their own investments. But at the end of the day, despite all the fabulous work that all the people who built Nutmeg have done, it does make sense for JP Morgan with its much, much bigger brand to brand those services under the JP Morgan brand, rather than maintaining a relatively less well-known UK-only branding.

54:41So it's a little bit of a rite of passage for UK fintech, but the right decision for JP Morgan in the long term, I think. And finally, now for something a little bit different from the world of business to finish this week's news show, which is that concert tickets aren't expensive enough, actually, says Live Nation's chief executive. So Live Nation chief executive Michael Rapinoe has argued that concert tickets have long been underpriced and should cost more. He compared concerts to sports events, suggesting fans should accept or even embrace higher pricing as a sign of value. Rapinoe cited rising production costs, such as touring logistics, and the scale of modern shows, such as Beyonce's large-scale tours, to justify ticket price hikes.

55:29That feels like something that's fine for a rich person to say. I mean, a concert's really underpriced or is this just quite self-serving? I'm not quite sure who to start with on this one. I was at the Oasis concert on Saturday if that helps and I feel like they are not underpriced. Don't get me wrong, I know that the value chain around the music industry has shifted drastically and the income streams around sort of royalties versus merchandise versus touring in and of itself sort of concert tickets has shifted drastically over the decades that they are more reliant on the income from these concerts.

56:16But there's also a point around accessibility. Let's not forget music is one of the arts. Arts need to be open and accessible for all. And I think that needs to sit at the core whilst recognizing the fact that there are economics around this that need to be serviced. Well said. I find it hard to disagree with you on that. Stephen, Sam, do you have a different perspective? I'd say I have a pretty similar perspective in terms of they're pretty expensive. So I think there's probably a basis in which, you know, folks need to think about, you know, obviously value and values derived by like, you know, the perspective that people put on it.

56:54So, you know, I think right now, I think in the economy as we see it today, right, and what's happening, I think they're priced at a level in which people, you know, view them as pretty luxury items. I don't think people go to concerts every day, especially those big ones, right? So, you know, you know, the experience is one of those things and it costs money, but I do think it'd be difficult to say that, you know, without some monumental shift in production and the way things work that the things on the back end people easily be able to justify that yeah yes completely agree i mean as a startup founder i admit i haven't been to a concert in quite some time um but i have seen what my siblings and one of my friends uh pay to go every so often and i don't think it's underpriced at all and i do agree with samantha that in the end, music must be available to as many people as possible.

57:49I think prices will just obey market dynamics. If people are willing to pay, they will pay. If not, they will not be able to. But my hope, especially for the artists and whoever decides these prices, is that they do take into consideration that they should enable as many people as possible to enjoy their art and their music because it's good for the culture, for the country, for everyone involved. I think that's very well said. I think we'll see artists that try to make their art accessible to as many people as possible, even while trying to generate a good income from that. Okay, well, that wraps up today's FinTech Insider News.

58:29It's been a fascinating and very complex set of topics we've gone through today. So thank you so much to all three of my guests today. You've been brilliant. unpacking some really complex stuff. Where can people find out a little bit more about each of you and your companies? Samantha, where can people find out a little bit more about you? So the easiest place is on LinkedIn. Connect with me there and we can have a conversation. Sam, where can people find out more about you and Pageantic? Yes, similar to Samantha on LinkedIn is the fastest way to contact me. I'm always reading my DMs. Also, we just launched the new website for Pageantic, pageantic.io.

59:09so please check it out and I hope to see you there. And Stephen, where can people find out more about you and about Fireblocks? Yeah, I'd say about Fireblocks it's at www.fireblocks.com and then in terms of reaching out to me obviously it'd be on LinkedIn and happy to chat with folks there. And as for me, Benjamin Ensor you can find me on LinkedIn as well. So thank you all so much for listening to today's Fintech Insider. If you like what you've heard please do follow us on your favorite podcast platform of choice and do share it with a colleague or a friend. If you want to join the conversation, seek us out on social media or just search for 11FS or FinTech Insider, or you can email us at podcasts at 11FS.com.

59:53So thank you all again for listening. And thank you so much to my three guests for joining me. And bye bye.