The Rise of Alternative Payments by Tracy Prandi-Yuen with Boku

Episode Overview

Our Guest: Tracy Prandi-Yuen- Innovating Global Commerce with Real-time Payments Support

Tracy Prandi-Yuen is an influential figure in the global fintech industry with a career that has been marked by leadership in innovative payment solutions. Her tenure as the Global Vice President of Boku is characterized by her commitment to expanding the company’s reach through diverse payment methods tailored to regional needs. Tracy’s insights into the fintech landscape are enriched by her extensive experience with major industry players like Visa and Meta, where she developed strategies that significantly influenced global payment systems. Her expertise extends beyond just managing transactions; it involves understanding the nuanced challenges and opportunities in deploying financial technology across different markets.

Tracy’s role in advancing real-time payment support at Boku underscores her forward-thinking approach to financial technology. She has been pivotal in integrating real-time transaction capabilities that cater to a global audience, focusing on improving transaction speed and reliability, which are critical in today’s digital economy. Her efforts have helped position Boku as a leader in non-card payment technologies, demonstrating her ability to navigate complex regulatory environments and foster technological adoption. Tracy’s work in promoting secure, efficient, and accessible payment systems reflects her deep commitment to enhancing the user experience and expanding financial inclusion.

Beyond her professional achievements, Tracy Prandi-Yuen is also a passionate advocate for workplace diversity and women’s empowerment in the tech industry. This passion is evident in her active participation in various diversity initiatives and leadership forums where she speaks on the importance of inclusive practices. Her advocacy extends to mentoring young professionals, particularly women, encouraging them to pursue careers in technology and finance. Tracy’s personal experiences and the challenges she has overcome fuel her dedication to creating supportive environments that enable individuals from diverse backgrounds to thrive. Her influence is a testament to her belief that diverse teams lead to more innovative and effective solutions, particularly in dynamic sectors like fintech.

Episode Transcript

Tracy Prandi-Yuen: What I’ve seen that helps move the needle is when top management believes in the cause, when they themselves believe in it and exemplify it and advocate for it, people naturally would follow and then the culture will start forming. But some leaders may see supporting diverse inclusion as a tick of a box because the investor says so, or because competitors are doing that in the world is asking for it. When that’s the case, then usually the company’s effort can’t take off. People don’t participate for their own good because they see that their management is not spending time on it.

Kevin Rosenquist: Hey, welcome to PayPad, where we bring you conversations with the trailblazers shaping the future of payments and fintech. My name is Kevin Rosenquist. Thanks for listening. Today I chatted with Tracy Prandi-Yuen, the global VP of Boku. Boku is revolutionizing the way you pay, offering over 300 local payment methods worldwide and facilitating commerce in more than 90 countries. It’s doing this by building a global network of localized payment solutions, which means non-card based payment methods such as digital wallets, direct carrier billing and directly from one account to another. She also spent time with Visa and Meta and has incredible insight into where fintech and payments are heading. We discussed that, as well as her passion for promoting diversity in the workplace and helping to empower women in the business world. Now chatting with me from Milan, Italy, Tracy Prandi-Yuen. I’m a child of the 80s/90s. Growing up, payment options were Visa and Mastercard, often American Express, sometimes Discover, and on rare occasions, Diners Club. Shout out to those who remember that. Talk about why local payment methods that go beyond traditional card systems, like the ones I mentioned, are so important to offer as payment options.

Tracy Prandi-Yuen: I would say, once you leave the Western world, you will find that cards are not always prevalent and there are many different reasons for that depending on the market. Sometimes, the banking system makes it very difficult for people to get cards, to be banked. People end up stashing cash under their mattresses. In recent times, you must have heard of Alipay. That’s probably one of the most famous E-wallets in the world. There are so many wallets everywhere. I think there’s also a population of people that just feel uncomfortable using credit or giving out their card details and a wallet gives them that comfort because it’s locked in your phone, you open that with biometrics or with a PIN and it’s prepaid. So you don’t have to worry about fraudsters coming and steal all your money. You just move money as you go. I spent 11 years of my adult years living in Singapore, working in payments and so I saw a lot of that across Southeast Asia and learned a little bit here and there about Latin America and Africa.

Kevin Rosenquist: Okay. So it’s something that you’re seeing more outside of the US, for example, where I am in, like another Western world. Why do you think that is? Why is it so much more prevalent outside of the Western world?

Tracy Prandi-Yuen: I would say, there’s also a bit of nationalism sometimes for countries. A very recent example is when the Russian-Ukraine war broke out and sanctions is happening, people couldn’t transact with Russia anymore and it was impacting the Russian economy. The countries around the world are watching, the governments around the world watching that are thinking that could happen to my country. So having their own national system, having their own local payments have become more and more important in, I would say, I don’t want to say recent time, it’s always been important. But I think coupling that with the development of digital payments and smartphones, which help consumers to adopt, makes the government drive the agenda much faster, it enables that. So what we’re seeing is, private banks, in the private sector, there are a lot of companies that are trying to capture this growth, but also you’re seeing the public sector. The governments are also thinking how do I create real-time payments? How do I ensure that everyone in my country can participate in a digital economy? Part of that is, also, how do I ID them, make sure they pay taxes?

Kevin Rosenquist: There’s that too. I recently started using Google Wallet. Of course, I’m just attaching my visa to it. It’s not like I’m not using local payment options. But I love it, the convenience of it. It seems so silly. It’s like, oh, do I reach into one pocket for my wallet or one pocket for my phone? But there is something easy about just using the fingerprint and then zapping it on the app, tap to pay. It’s pretty cool.

Tracy Prandi-Yuen: Yes. A year ago I moved from Singapore to Italy and I don’t speak Italian yet. So you can imagine the move was a big shock. I also switched jobs at the same time, so my world was turned upside down.

Kevin Rosenquist: Just pile on, Tracy. Pile on.

Tracy Prandi-Yuen: Then I was told to, for my new job, immediately get on a business trip, two weeks after I moved here. So I went to London for getting to bring my wallet and I survived with just my phone.

Kevin Rosenquist: You’re right. You couldn’t have done that, not that long ago. You would have been in trouble.

Tracy Prandi-Yuen: So the world’s changing for sure.

Kevin Rosenquist: Well, that’s a good segue into my next question. How do you see local payment methods evolving with that increase in the digitalization of economies?

Tracy Prandi-Yuen: There is a big trend right now in the payment industry where both consumers and merchants are moving towards what we call A2A, or account-to-account, real-time payments. That’s essentially saying, moving money from one bank account to another without middle layers. So taking out E-wallet, taking out middlemen completely. A lot of the governments are building the infrastructure for that and putting policies around how much merchants would have to pay or consumer has to pay for this transaction. So that’s bringing down the cost of payments. You’re in the US, so you know ACH. ACH is not the fastest thing if you ever tried to know. If you ever try to move money outside of US through wire transfer, you would also know that it’s not a fastest thing. So real-time payments are literally, moving money in real-time. So that is a big plus for merchants, for people that are running businesses, want a cash flow, and want a guarantee of payments. So we’re seeing that taking off. In the industry, a lot of people are saying that this is, probably, the first time a non-card payment can pose a real threat to the future of cards.

Kevin Rosenquist: That makes sense. Would that basically be instant, pretty much that?

Tracy Prandi-Yuen: Yes. I don’t know if you heard of Pix in Brazil or UPI in India.

Kevin Rosenquist: Pix sounds familiar.

Tracy Prandi-Yuen: These two are real-time payments. These two are probably the most famous, two of the most famous ones around the world. They’re both government-backed and when they first rolled out, people had a lot of doubts about that. But just within months, it’s like a hockey stick. People realized how easy it is, how much cheaper it is, and how convenient it is and with smartphones being so prevalent now, the adoption of these type of payments is a no brainer. If we look at five or ten years ago, that wouldn’t have been easy in emerging markets or just non-Western markets, because most of the people were non-smartphone.

Kevin Rosenquist: I like that you used the hockey analogy. I’m a hockey fan so I can wrap my head around that. That’s good. So you’re saying, the one in Brazil is government-run. It runs through the government. As far as the Western world is concerned, like in the US, will that have to be government-run when it comes to areas like us, do you think?

Tracy Prandi-Yuen: I think for the US, there are more challenges around building something like this. There is a government initiative for building a real-time payment transfer infrastructure or they already built it. It’s called FedNow. That was just rolled out in July, last year. It has not taken off yet. The banks in the United States, besides ACH, have another infrastructure they built that is also real-time payments, but it’s privately owned by the banks. That costs more than what FedNow charges.

Kevin Rosenquist: I see that as an option a lot of times where it’s like, if you want it right now, then pay an extra 2%/3% or something. I’m always like, I don’t need it that fast.

Tracy Prandi-Yuen: With FedNow, it is something that would work if the banks adopt them and support it. For the banks, they look at their bottom line, “I’m making this much money with my current infrastructure and it can support real-time payments. Do I want to support FedNow?” Because the government, in the US, is much nicer in that they’re not enforcing you and not forcing the banks to adopt FedNow. This is going to be around for a while and people are just watching to see whether there is going to be a use case, a compelling use case that would force consumers, merchants, or banks to move towards FedNow. As of right now, I think the banks feel lukewarm about it. So, it exists, but it’s not taking off. On top of that, I would say, in the US, there are a lot of people that are card users. The US is highly banked and people love their rewards.

Kevin Rosenquist: I was going to say that.

Tracy Prandi-Yuen: It’s hard to walk away from that.

Kevin Rosenquist: Rewards, For sure.

Tracy Prandi-Yuen: I think an interesting thing on rewards is, in Asia, E-wallets are popular. When you look at a country like Singapore, where it’s very Westernized, a lot of people do use cards and they love their rewards as well. Why are they willing to move to E-wallets? It is because E-wallets have figured out how to build their own loyalty system, and they give rewards in a different way. But you can also get points and maybe vouchers, different things. They do make sure they can compete with the cards, but for real-time payments, because the idea is to bring the cost down for everybody, so there’s not that extra funding to pay for these things.

Kevin Rosenquist: To do the rewards, that makes sense. Often I feel like businesses are hesitant to adopt new fintech solutions. It feels like the emergence of AI is sort of helping push people into updating their systems or improving their processes. Do you agree with that? Are traditional businesses more open to change today versus a few years back before AI took over?

Tracy Prandi-Yuen: For sure. I think there have been many innovations and new technologies that are surfacing in recent years, and in the way that people are more used to being disrupted now.

Kevin Rosenquist: That’s a good way to put it.

Tracy Prandi-Yuen: Before AI before the latest AI chatbot or whatever, there was crypto and there was blockchain. Those were new concepts for most people. These things stuck around for a very long time before they finally became somewhat mainstream in certain markets in the last few years.

Kevin Rosenquist: There’s still a lot of mistrust around that technology, too, I feel like, from people.

Tracy Prandi-Yuen: Because they’re not regulated in most places. Back to AI, in the payments world, AI is something that’s being leveraged to help detect fraud. So in a lot of payment transaction monitoring, they use AI to look at the history of certain users or just a combination of how a transaction happened, the attributes meaning, what time of the day, where is that transaction coming from, where the merchant sitting, what are they buying, what is the ticket size? There’s always AI, looking at all these attributes that come together for transaction approval. Then they make decision around whether they should approve, a company that makes decisions about whether they should approve that transaction or not, should they flag it as a potential fraud, etc. So I would say, AI is not a new concept for payments. But generative AI, how do you adopt that and invest in that? That’s one thing. Also, payment data is considered something that needs to be secured in a very extreme way. So putting that on the cloud then we think about AWS, for example. A lot of companies leverage AWS or Azure from Microsoft to do cloud service and how do you keep these things there and keep them secure? How do you make sure that you don’t have system downtime? How do you do, they call it active? So if one system is down immediately, a different part of the system can pick up and ensure that business continues. So AI, I think, is going to transform that part of the business as well, which is tied very closely to payments, because we have to sort data in a very specific way because payment is regulated.

Kevin Rosenquist: I’ve talked to a few people who are AI companies that deal with fraud and are using AI to help with fraud in new ways and stuff, and it, definitely, helps. It certainly takes time because it analyzes so much data, a heck of a lot faster than an analyst can. So It’s great and without it, it feels like cloud computing or cloud, as far as the cloud-based payments industry, would be difficult. Because to your point, you’re more vulnerable in that scenario than you are in a hard drive or something like that. So where does cash fit in all this? You made you made the joke before about people keeping cash under their mattresses or perhaps it wasn’t a joke. But do you see a future where cash is a memory?

Tracy Prandi-Yuen: What’s cash again?

Kevin Rosenquist: It’s already there. We’re already there.

Tracy Prandi-Yuen: Cash is still very relevant in different parts of the world. If we look at global numbers, what you’ll see is cash usage is coming down. We, Boku, recently, launched our global report, global E-commerce report. The report reveals that by 2028, four years from now, cash would only be Cash on Delivery. Now, I will explain that one. Cash on Delivery is only going to be about 3.4% of the e-commerce payment transactions and Cash on Delivery means you buy something online and you say, I will pay you Cash on Delivery, and then a person’s going to come to your house and deliver your goods and then you examine that good. If you decide you want to keep it and you’re not going to return, then you would pay cash to the person who delivered the money to you. It’s a interesting economy.

Kevin Rosenquist: COD, I remember that one.

Tracy Prandi-Yuen: And the person that delivers your goods will take that cash and that’s a risk. Because that’s not the seller. They have to take that money back and make sure that money eventually gets to the seller. So cash delivery still works very much in some parts of the world, emerging markets, because people have not caught on using digital payments.

Kevin Rosenquist: You said not caught on. Is it a financial thing? Is it hard for them to implement? How come people are having trouble keeping up in that respect?

Tracy Prandi-Yuen: It could be a lot of things. I’ll give you an example. So I had said that alternative payments, like digital wallets, they could hit a segment of users who are unbanked or I had said, not having access to cards, but also maybe they don’t have a relationship with a bank. But when you look at, say a country like Vietnam as an example, E-wallet in Vietnam needs to somehow be tied to a bank account. So in that sense, the E-wallets in Vietnam solve a different problem. It is not solving the unbanked or underbanked problem because you don’t work with a bank. You can’t use that. At least you can’t use the wallet fully. So I digress. What was my original question?

Kevin Rosenquist: Well, I was asking about how come it’s difficult for some countries or businesses around the world to adopt digital technologies?

Tracy Prandi-Yuen: I would say, Vietnam is a great example. Those who are not using a bank or don’t have access to a bank, may not be able to use an E-wallet for their purpose because then they can probably take money in, can probably payout, but they can’t get paid. There are tons of limitations. So in that sense, people still rely on cash. Sometimes, it’s just “All habits die hard.” Any payment innovation takes a while to take off because it changes people’s behavior. If you look at the US, years ago, it used to be signature only when you used cards. There’s no chip where you just dip in. That took a while for people to switch.

Kevin Rosenquist: It did. The Europe was way ahead of the US in that respect, I remember.

Tracy Prandi-Yuen: Now, Apple Pay, Google Pay, again, that did take a while before people started using it.

Kevin Rosenquist: Well, I’m a pretty techie guy. I just started last week, I think and you’re right about old habits, too. Because the look on my dad’s face when I zapped my phone on that, he was like, what the hell are you doing?

Tracy Prandi-Yuen: I have a question for you. Because you have been living in the US for so long, do people still use checks in us?

Kevin Rosenquist: Maybe, to some degree, I think. There are some people and they’re, generally, more old school. I don’t know what would happen if I went to the grocery store and started writing a check. I don’t even know what to do with it. But I have certain situations, like, I think some people might still pay rent and things like that with a check. But we have a checkbook in our junk drawer in our kitchen. That thing comes out maybe once a year. So that’s a long answer. The short answer is rarely, I would say.

Tracy Prandi-Yuen: See, to me, that’s another old habit that should die. From a security perspective, someone can take your checkbook, sign it, and then give it to someone.

Kevin Rosenquist: Well, there’s a whole movie based on that with Leonardo DiCaprio from back in the day with check fraud. Well, speaking of checks, I guess, as the world moves to more or tries to move to more sustainability in every way, is this a step towards sustainability in the financial world, getting rid of cash, ditching cheques for good, that stuff?

Tracy Prandi-Yuen: I think Covid gave the world a big push towards moving away from cash and check a lot of markets or sectors where we saw a lot of stubbornness in people sticking to their habits, or merchants not wanting to invest in being able to accept digital payments. A lot of them switched over during Covid because they want their customers to feel safe to continue coming to their store and make purchase. I think Covid stuck around for a couple of years, or was it three years? And that’s enough time to change some sticky habits that people had with cash.

Kevin Rosenquist: I, recently, interviewed the CEO of a company called Zest AI. We talked a little bit about unbanked and underbanked. How can the payments industry contribute to more financial inclusion, particularly, when it comes to underbanked and unbanked populations? What needs to happen?

Tracy Prandi-Yuen: I think, in parts of the world where more work is needed for financial inclusion, people there, the communities locally have figured out ways to get around it. For example, you may have heard of Grab, which is like the Uber of Southeast Asia. That’s a famous one. Another one is Gojek, during Covid time, built up their restaurant delivery business, but they also have this side of the business where they do like a mobile ATM. So if I’m living in a remote area, there are no banks around me and no ATM, but I need cash. I can then digitally pay through my Grab or Gojek app and order cash to be delivered to me. There are different ways around that. People have used crypto to solve this kind of problem as well. Crypto also solved the problem of remittance. So sometimes it is hard to get money out of the country because of their currency controls. So crypto is being used for that. To answer your question directly about what can we do to support financial inclusion in the payment industry, it would be good to look at ways to put more standards around how to support these use cases, because the examples I gave you, they’re all very different. How can we standardize that a little more, think of better ways, and help them strengthen what’s in place? So these things popped up, obviously,. Because the mainstream infrastructure does not help. So how do we bridge what’s happened organically? How do we bridge that to the mainstream? How do we bring them back to the fold, and how do we ensure interoperability? Any Southeast Asia country you go to, there are multiple e-wallets. So some governments have looked like this and said, hey, you know what QR is something very easy to create and adopt. So they created a standard for that and they put a mandate and said, every wallet needs to support this standard to ensure there’s interoperability, because then now, instead of only being able to transact when your particular wallet is being accepted. It doesn’t matter anymore because everyone uses the same QR code standard.

Kevin Rosenquist: I like to ask this question of people in your world. Are you a crypto fan, personally?

Tracy Prandi-Yuen: I would say, no. I have not invested in crypto myself. The reason is it’s unregulated. There’s a lot of fraud out there and my personal view is it doesn’t necessarily justify the benefits that it brings. Because I live in the first world. I don’t think I need crypto to solve a problem. People in my world, meaning if you’re not in need of financial inclusion, support those that embrace crypto, a lot of them are looking for quick growth in their assets.

Kevin Rosenquist: Quick profits.

Tracy Prandi-Yuen: Profits, that’s the word. I cannot justify the potential of quick profits with the amount of fraud I’ve seen and read. It may never happen to you, but if it does happen to you, it will be completely out of your control. No one can help you because it’s not regulated.

Kevin Rosenquist: Security, privacy, we talked about that a little bit. With the rapid innovation in payment technologies, how can companies balance the need for new features and the need to innovate while ensuring security and privacy for users? That seems to be like one of the biggest hurdles as we go on to this next technological revolution.

Tracy Prandi-Yuen: When you’re in payments, you always have to continue to invest in the fraud risk space. Even without innovation, you can’t not be on your toes because fraudsters will continue to innovate. Whether you’re innovating your own payment business or not. People can get very creative in emerging markets. I think, in the US, people are generally aware of not being scammed to provide banking details like the login details or your ATM PIN, etc. But in other parts of the world, for example, Italy, about a year ago when we first moved here, my husband’s friend who is a lawyer, a well-educated person, got scammed because she responded to an SMS message with her banking details, thinking it’s the bank talking to her. You’d be surprised.

Kevin Rosenquist: That’s not great. That’s usually something that happens around here anyway. It’s, usually, older people who don’t know any better and aren’t sure about the technology, and they sign up for that warranty that they don’t even need and all that. So Oh boy, that’s tough.

Tracy Prandi-Yuen: I think for companies that are in the crypto space, fraud, and risk is a very major areas they should invest in. If you’re a company that specializes in protecting crypto payments, I think you would do well, as long as crypto is relevant in the payment industry. I don’t think there are enough people looking at preventing fraud in crypto.

Kevin Rosenquist: I’m curious about some other aspects of your career. You’ve worked for some big names Visa and Meta, and everywhere you go, you’ve been part of the committees and groups that work toward equality and inclusion, connected women at Meta, Visa diversity and inclusion. Diversity and equality in business are something that you are passionate about. What has your experience been like being a prominent woman in the business community?

Tracy Prandi-Yuen: I’ve had both good and bad experiences as a woman in the payments industry. I would say if you are not in a forward-thinking company like Meta, culturally, the payments world in general is very male-dominant and it is not always easy for women to advance or just be heard. I was lucky that in the early part of my career, in my 20s and early 30s, I moved up fairly quickly. So I didn’t feel that challenge that a lot of women say they face until I was at a certain level. I met this woman while I was at Visa, and she showed me what women go through. She kind of pointed things out for me and enlightened me. I’m a person who likes to help people. I believe in supporting people to move the general societal agenda. So once it was clear to me that there are women out there who struggle, and because I’ve experienced a little bit myself, I became more active. I’ve always been active in any company because you spend so much time at your work, it’s just not worth it if all you do is go there and do your job and leave. You want to make friends, you want to make a difference, you want to touch people’s lives, and that’s just how I feel in general. But I started focusing on supporting women and supporting kind of minorities when I hit my mid-30s and I didn’t realize that I’m a very outspoken person compared to many women I know, and also in Asia. I’m more outspoken than a lot of men that are born and raised in Asia, so I use my voice to help others and try to encourage others to speak up. By being vocal, I showed them that nothing happens to me because people worry about their job, they worry about repercussions. So I like to demonstrate how you can be firm and get your voice heard, but in a respectful way.

Kevin Rosenquist: Have you found the groups that you’ve worked with over the years promoting diversity in the workplace? Have there been successes? Has there been progress because of it?

Tracy Prandi-Yuen: Definitely. I’ve seen efforts that fail as well as those successful ones. I would say, that what I’ve seen that helps move the needle is when top management believes in the cause, when they themselves believe in it and exemplify it and advocate for it, people naturally would follow and then the culture will start forming. But some leaders may see supporting diverse inclusion as a tick of a box because the investor says so, or because competitors are doing that in the world is asking for it. When that’s the case, then usually the company’s effort can’t take off. People don’t participate for their own good because they see that their management is not spending time on it.

Kevin Rosenquist: Fintech is known to be very fast-paced. You touched on it a little bit before about being more than just a job that you go to every day. How do you balance the demands of your role with family, friends, hobbies, and having a life?

Tracy Prandi-Yuen: I think when people say work-life balance, we have to think of it as a verb. So you have to be constantly balancing. There’s no perfect balance that you reach. A lot of people, especially women, love to say you can do everything as a woman, but you can’t have it all. A lot of people say that. So you can’t be a great mother, a great wife, super successful in your own job, and still take care of your own aging parents, you just can’t do everything and have friends. I think it’s true, but I think it’s true for men as well. No one can do everything, so to have a work-life balance that is suitable for you and where you can have some kind of mental health, it takes a lot of self-awareness. You have to know what’s important to you. You have to be able to prioritize and know when to stop in one area and move to another that maybe you ignored for a while. I, currently, have two little kids, so working full time with two little kids in a foreign country where I’m trying to learn the language, they don’t recognize the US driver’s license here, which is the only driver’s license I have, so I can’t even drive right now. I’m trying to study their theory, driving theory in Italian. Reaching a good balance for me is not easy. In a way, I think you have to exercise a similar muscle that you would use if you were to multitask at work. Your brain has to shift, constantly going, okay, now I have to take care of my kids, now I have to do my work. There’s a deadline and you address that. Okay, I ignore my family for too long. Let me take care of that. Oh, I’ve been studying, so let me study tomorrow. Oh, I haven’t slept, so tomorrow, I don’t have meetings, let me sleep two extra hours. This is how I do my balance.

Kevin Rosenquist: Hey, it’s all about what works for you.

Tracy Prandi-Yuen: And ask for help.

Kevin Rosenquist: Yes, that’s true. That’s true. Definitely, ask for help. Tracy, it was great talking to you. I appreciate you being on here and making the time, and I’d love to have you on again sometime.

Tracy Prandi-Yuen: Thank you, Kevin. It was my pleasure.