Forget Afterpay: Here’s what consumers want from financial offerings of the future

What is an expert? Is it someone who understands the state of play sufficient to recall facts about it, or is it someone who takes what others see and uses it to teach them about what could be?

Experts everywhere are speaking of ‘the revolution facing banks’ that fintechs like BeforePay, Afterpay and YouPay are a part. There’s a glut of articles by economists, VCs, finance journalists and Tom from next door hitting the digital press with but a handful of the same views.

No different than the “photographers” that digital cameras created in millions of people almost overnight, the fact that anyone can now publish an article about a subject for free has meant that almost everyone has. But few of them look for their own truth.

Take buy-now-pay-later companies for example, which grew in value almost solely based on the growing number of experts calling them “revolutionary”. Soon, more piled on until almost everyone said they were ‘the next big thing’, all of them buying shares and pushing the price higher and higher. That doesn’t change the fundamentals of a business.

There are dozens of companies that will help me spend my pay before I have it, when I may never have it, when I shouldn’t spend it and when I couldn’t spend it before. The experts speak of them as if Payday Lenders, Lay-Buy, Credit Cards and Consumer Finance are new topics — they’re not. Afterpay’s own goal as outlined in their June 2015 pitch was to charge consumers up to 20% interest and 𝙩𝙤 𝙥𝙧𝙤𝙛𝙞𝙩𝙖𝙗𝙡𝙮 𝙖𝙣𝙙 𝙥𝙧𝙤𝙜𝙧𝙚𝙨𝙨𝙞𝙫𝙚𝙡𝙮 𝙜𝙧𝙤𝙬 𝙩𝙝𝙚 𝙖𝙢𝙤𝙪𝙣𝙩 𝙤𝙛 𝙘𝙧𝙚𝙙𝙞𝙩 𝙚𝙭𝙩𝙚𝙣𝙙𝙚𝙙 𝙩𝙤 𝙘𝙤𝙣𝙨𝙪𝙢𝙚𝙧𝙨; and the experts still speak of it as a revolution.

Why aren’t the experts talking about companies that care about my pay?

Where are the thousands of experts writing about ordinary people holding on to their pay, or making their pay go further, or growing their pay, or learning about how to use their pay to benefit them and others in new and empowering ways? That would be a revolution.

What about the companies teaching me that paying to access my pay, because I have spent it too soon, will mean I have less of it each time I do?

What about the companies telling me the things I don’t want to hear, in a way I’m open to hearing, so that tomorrow I am the only expert I need to help my pay go further?

Change is coming

There is a small but growing number of companies with a goal to change this industry for the better. They’re coming from dark corners all over the world, lead by people not from finance, but from everyday life who are sick of an industry, and a world reliant on it, that celebrates the dumbest of ideas.

These are people speaking about ‘businesses with purpose’; businesses that make money by helping people, not praying on them. The media isn’t raising up their voices just yet but their voices are resonating with consumers — the customers — the everyday people who bear the cost of this industry, and who will force it to change.

It’s a movement that’s growing in pace and size. Google searches for ‘Inclusive Capitalism’ have risen 3,900% in the past 5 years alone. Look to other terms encapsulating why capitalism is broken and why wealth inequality is growing and you’ll get a sense of the swelling feeling among millions of people that has all the makings of a generational movement in its infancy.

These companies will introduce a new way to make money in finance that is so ethical, so aligned with ordinary people, that it’s almost inevitable that their ideas will thrive. They are building businesses that aren’t just products for consumers, but platforms for a movement that’s growing in a generation fed up with a system that takes more from them than it gives.

Coming soon is the biggest transfer of wealth the world has ever seen, to a generation so punished by the system right now, that they’ll use their wealth to demand a new one.

Young people hate capitalism; it’s not their system. It’s a system that belonged to the generations before them and for which they have paid a heavy price.

In 2007 young people saw a “once-in-a-lifetime recession”, just as they were forming their views on the world. Between 2011 and 2019, when those views were being solidified, their pay stayed the same but their costs grew around them. As a result they built 34% less wealth than the generation before them did at the same age.

In 2020 they saw another “once-in-a-lifetime recession” and were locked inside for a year, isolated from the experiences they’ve come to value in the place of wealth that’s out of reach.

At the start of the pandemic there was 1 person worth $100 billion. Now there are 9.

Young people see this, they live this, they feel it every day as they pay a higher tax rate on their small wages than billionaires pay on their entire fortunes.

Millennials currently hold 4.8% of wealth. There are now 40-year-old millennials. At the same age, Baby Boomers held 21% of wealth. No matter your opinion on the generation above or below you, this is undeniably significant.

In 2018, 51% of people aged 18–29 viewed socialism as favourable while only 30% felt good about capitalism (2018 US YouGov Poll). But what’s most telling is that the definition of socialism is changing in that age group. Only 22% think socialism involves government control; most just think it means greater equality.

What those 51% of people are actually saying is that they view ethics and fairness as being far more important than profit. And, all of this before we locked them in their rooms for a year, at great cost, to protect the generations before them from a virus. Imagine the figures now…

A 2016 Gallup survey found that 90% of 18–29 year olds view entrepreneurs favourably. 98% of them viewed small businesses favourably because of a perceived lack of greed.

The support for a business model by 98% of a market is a metric that would blow the socks of any an expert, and yet ‘Afterpay’ is still their headline. They’re too busy talking about the returns they can realise, by using that 98%, to see the upside potential of a company that makes money by raising those same people up in a way that they can champion and own as a movement, not just use as a business to buy products they can’t afford.

A majority of young people support ethical and responsible business, an overwhelming majority support entrepreneurs and almost all of them support businesses with a perceived lack of greed.

Why aren’t the experts talking about companies lead by entrepreneurs building platforms with reasonable profits? Or platforms offering ethical solutions to a generation with unprecedented social values? Where are the experts talking about the companies offering that generation a pathway towards building a system that breaks down wealth inequality instead of increasing it?

Why aren’t the experts looking at how the company that best does that could likely be the next Google?

They are stuck talking about Afterpay while the generation about to take the wheel is supportive of systemic change so far beyond paying for a T-shirt over 8 weeks that it’s like arguing about which coal is best as we all drive past a wind farm.

The “real experts”

Right now there are a few people building solutions in the shadows that will soon take this world by storm. VCs aren’t yet investing in them, newspapers aren’t yet covering them. They have nothing to do with crypto or blockchain, they aren’t against capitalism or anti-government — these people don’t even own a single tin-foil hat. They are people who think that one small change to how an industry makes money could change the entire world.

They are people just like you and me, sick and tired of living in a world that celebrates success gained on the exploitation of others. They aren’t idealists; they know what human nature is and they believe it can be harnessed to help raise people up, not just targeted to make money by keeping them down.

These people are working on businesses that will not just improve on products or services, but will show the world how a finance system can be built to benefit more people than less — businesses that don’t just tell people how poorly they’re being treated, but offer products that unequivocally prove it.

Apple may make customers realise they don’t need banks, but the next super-company will make the world see just how powerful groups of people can be when the financial system they’re a part of is built for them, not built on them.

The experts are all out there looking for the next Google — looking to invest in it, to say they saw it coming. I often wonder how they plan on finding it when they can’t even talk about where to look.

This article was first published on LinkedIn.