Compared to their analog counterparts, digital wallets are a relatively nascent development, which have only seen a rise in lockstep with the proliferation of smartphones and online and/or mobile-based payments. But the digital wallet space is a massive market opportunity, especially as consumers report increasing confidence and interest in making payments digitally. 

To make sense of how the promise of digital wallets are shaping fintech operations, The Financial Revolutionist sat down with Anil Goyal, CEO of CorServ, and Dee Choubey, Founder & CEO of MoneyLion.

Anil Goyal, CEO, CorServ

CorServ is a Georgia-based fintech offering turnkey credit card-issuing solutions and APIs for payment issuing and processing services. Founded in 2009, CorServ works with banks, fintechs, and e-commerce solutions to roll out payment, commerce, and finance programs. 

CorServ’s CEO, Anil Goyal, offered the following insights: 

• Remaining top of wallet requires ongoing operations. “A credit card is a very different kind of lending product,” Goyal elaborated. “It’s not a one-and-done product [like] an installment loan or a mortgage.” Since credit cards require ongoing use and payment, card issuers—both physical and digital—have to communicate with customers on an ongoing basis to emphasize the value proposition of what they signed up for. Executing these strategies successfully requires hiring comms and product development talent that can anticipate and respond to changes in consumer tastes and habits.

• Getting new customers is expensive. Many top issuers still conduct direct mail campaigns, which often cost more than $1 per recipient. A .25% response rate is a “great” standard, Goyal said, meaning it can take more than $400 to acquire a customer in this way. Digital ecosystems let card issuers segment potential customers into more personalized tranches, reaching out to them according to specific triggers rather than uniform developments like a New Years’ promotion. Hiring out analytics and marketing teams that can A/B test the success of segmented campaigns is key to this operational shift’s success.

• Letting idle customers stay can be pricey, too. Conducting marketing activities to make inactive users re-engage with cards can be risky. “If somebody’s not using the card, they are probably going to use it at a time when they are the most in need of it and may not be the best from a risk perspective,” Goyal said. As a result, risk operations have to work in tandem with communications teams to ensure that campaigns to be at the top of the wallet do not compromise a card’s risk.

Dee Choubey, Founder & CEO, MoneyLion

MoneyLion is a NYC-based mobile financial app, financial marketplace, and embedded finance ecosystem. Founded in 2013, MoneyLion is publicly traded, and also raised more than $477M in venture funding since its launch. 

Dee Choubey, Founder & CEO of MoneyLion, outlined how the fintech giant is diversifying its operations—moving away from being primarily known as a consumer-focused fintech, including offering digital wallet solutions, toward foregrounding its efforts as an embedded finance solution and partner to other fintechs—and solving for unit economics as it enters its second decade of operations:

• Sustainability requires rightsizing prices. After solving for growth for many years, MoneyLion is exercising discipline and emphasizing profitability. It’s increased the spend of products for enterprises and consumers, committed to be more disciplined on vendor costs, and has become more efficient with marketing. It’s also committed to not spending more than 20% of its revenue on people. “No good business is ever built that doesn’t obsess about its cost structure,” Choubey said.

• New products, new frontiers. In Q2, MoneyLion announced the launch of its genAI-driven financial search engine. It can map out the basket of financial products that a household should optimally have according to its characteristics, Choubey said. Through this new product line, MoneyLion has diversified its operations to help it, and its partners, turn users who use one type of product—like a virtual card—and target them with an appropriate set of complementary products.

• Widening its scope. Choubey said MoneyLion wants to become a “trusted advisor for the entire financial services ecosystem” and a trusted advisor for “acquiring and analyzing customers into their next best product.” Choubey noted that fintechs have to work together to compete against larger incumbents—from helping these players reach the top of the wallet, to offering competitive lending products, and beyond. Functioning as a partner for these fintechs can level the playing field for the sector.