(upbeat music)
Please welcome Stripe's
Chief Business Officer,
Jeanne DeWitt Grosser.
(upbeat music)
Hello everyone.
We opened the day covering Stripe's
advanced payments engine,
and the stream of innovations
we're bringing to market
to increase conversion rates, evolve
your business model,
and put AI to work across your stack.
If you think about what
makes Stripe unique,
it's our ability to bring together
the products we develop with the insights
of our users and the underlying
innovations of our partners.
It's our users, all of you who are going
to turn the innovations
we just heard about
into customer experiences.
Your best practices enable
the Stripe community
to stay at the forefront
of the internet economy.
And it's in working side by side
with our partners,
often years in advance of a public launch,
that we figure out what
the future might look like
for global commerce and money movement.
As Will said, it's a team sport.
So I want to spend the next 30 minutes
learning directly
from payments and industry leaders,
individuals who can share
tangible insights
into how they've turned
Stripe's economic infrastructure
into delightful customer experiences
and new revenue streams,
and who also might just have a bit
of a crystal ball
into the trends we'll all be discussing
here at Sessions 2025.
Before we jump in,
I'd like to take an informal poll.
No apps, no devices, no opportunity
to check email or Slack.
Just hands, how many of you have planned
to adopt a new business model
for the first time
in the next couple of years?
New marketplaces, platforms,
adding subscriptions?
Alright, lots of hands out there.
So it certainly turns out
you're not alone.
Earlier this year we surveyed
thousands of companies
to get a pulse on the kinds
of business models they plan
to launch for the first time.
And they told us
they're building subscriptions,
new SaaS products, platforms,
and marketplaces.
I want to pause for a second here.
Turn to your right, turn to your left.
I realize that's the opposite order.
I realize we also just made you do this
in keynote number one, but this is huge.
One in three
of you are going to change
your business model
in the next couple years.
So the world around you
is certainly changing.
We're seeing rapid business model changes
and customers are also demanding changes
in how businesses do business.
For example, 10 years ago,
ecommerce really just meant credit cards.
Now it means providing access
to a 100+ payment methods
around the world.
And consumer preferences
are changing all the time.
Let's take buy now, pay later.
They've grown to nearly a
hundred-billion-dollar market
in less than half a decade.
And with what we're seeing in Gen AI,
we can only imagine the number
and extent of changes we'll be discussing
at Sessions 2025.
To unpack all of this,
I'd now like to invite two companies
that have successfully launched
new business models
in the midst of changing consumer
expectations to the stage.
Please welcome Anu from Sotheby's
and Aanan from Wayfair.
(upbeat music)
Welcome, incredibly excited
to learn from both of you.
So we opened with the theme
of new business models
and both of your companies
are adding new business lines
with new business models.
So I'd love to start there.
Anu, you're adding a
marketplace at Sotheby's.
Tell me more about
what you guys are doing.
Yeah, so Sotheby's is a 280-year-old
auction house.
We are in the process of evolving
from that into more
of a generalized marketplace.
So big areas of investment for us.
One is what we call the
the fixed price business.
We have now a luxury segment
that we sell at fixed prices,
not auctions, obviously.
And the second thing is we're opening
retail locations,
what we call maisons
or salons in some of our key
locations across the world.
And with that also, we we've added a bunch
of new categories
that appeal to new audiences
like sneakers, NBA jerseys,
so constantly evolving
and adapting to the new world.
Awesome and Aanan,
Wayfair, classically known
for ecommerce for furniture.
Yes. But you guys
are adding brick and mortar,
so tell me more about that change.
Yeah, so at Wayfair we truly strive
to be the destination
for everything home.
And as you mentioned,
we put so much effort
to build our assortment
and selection,
not just for furniture and decor,
but also housewares and home improvement.
And so as I step back
and think about our customers
and how do we meet them
at wherever they are shopping,
physical retail and opening stores
was a natural transition for us.
So, in record speed,
since 2022, now we have
eight stores open for all
of our AllModern, Birch Lane,
and Joss & Main brands.
And I'm super excited, on May 23rd in,
I would say less than a month,
we are opening a 150,000 square feet,
first Wayfair mega store in Chicago.
So, exciting times for us
to go from digitally native ecommerce,
kind of brand
to in store and omnichannel.
Nice, well, that’ll feel even bigger
than the stage does up here.
(group laughing)
So how mission critical is it
for you all to get payments right
for these new ventures
and the customer experiences
you're trying to create?
Yes, for us, you know,
Sotheby's is in the business of trust.
Trust is so important to us
that we could actually
put it on the balance sheet.
Relationships with our clients
go for decades, 40,
50 years of our collective journey.
So, and you're talking about
a very discerning
client base, right?
They choose the finest
objects in the world
and you're talking
really large price points.
Like think $2 million, $3 million.
The larger, the most expensive
painting we sold
last year was about $138 million.
So for us, getting payments right
is kind of the core.
It builds that trust
to bring these clients back to us
and to build kind of
that intergenerational trust
that we're trying to generate.
So for us, it's two main things.
It's around the flexibility
that we offer them,
payment methods,
people can be, you could be bidding
from mainland China in an auction
that's being held in New York City.
And the other thing for us is
it needs to be flawless.
So it's really very core
to our business.
Absolutely and
big differences between brick
and mortar and online.
So what are some of the things
that have been keeping you up
at night in that shift?
Yeah look, I think most
of our customers have immersive
shopping experiences,
so they fall in love with the item,
it's for the home, it's so inspiring,
it's so emotional with that.
So after falling in love with
what you want to buy,
payments just need to work frictionlessly,
right?
And so the way I think about this is
it needs to be simple,
it needs to be helpful,
and it needs to be secure.
So when I think about this
from a unified commerce perspective,
it just needs to blend.
I have my digital wallet;
I should be able to take
that to my store.
I have a project that is big,
I want to apply for,
you mentioned BNPL and financing.
That should work
whether I have a credit line
already available
that I want to use in store
or I want to apply for a new financing.
So from lending to loyalty, it's all
about the payment choices
and frictionless payment inside the store,
card present or not.
Yes absolutely and Anu,
I think the average AOV
in the industry is like 50 bucks.
At Sotheby's, I think it's like hundreds
of thousands if not millions.
So a little bit of a different...
Yes, ball game.
You know, need, as you mentioned
around flawless payment.
So, tell me a little bit more
about how you're achieving that.
So for us it's mainly about
giving our clients a bunch
of flexibility, like I mentioned.
So that's functionality, right?
Yeah.
It's the ability to pay
by whatever mode they choose.
It's whether they want to add on,
whether they want to pay by card
or through their debit,
or if it's a wire transaction,
we have to kind of bring all
that together and
reconcile all of that, right?
So for us it's about driving
that convenience to the client
and it's also about keeping it simple,
you know?
And so the third piece
is reliability for us.
It is super important for us
to get that right.
Yep.
So before Stripe,
what were some of the challenges
that you all were facing in launching
these new business lines?
I'm assuming, Anu, starting
with you specifically
around marketplaces.
Yeah, so for us prior to Sotheby's,
we had many problems,
but one of the problems
that we had was basically
like lack of options for a client,
especially online.
The pandemic changed a bunch
of things for Sotheby's.
One of the things that
it changed was a bulk
of our bids actually come from our online
visitors now.
And so for us, we had to set up a,
we have to kind
of have a payments
and checkout experience that kind
of matches the expectations, right?
So for us,
it was a huge challenge to take anything
that was debit related for us.
We couldn't do that with a prior provider.
And the other thing is reconciling
like I said,
China UnionPay,
I think I mentioned this year
before, for us,
like Chinese clients are significant
bidders across,
and they have different
limitations based on
what the government there
restricts them from doing.
So for us, working
through those challenges
has been a huge pain point
that Stripe is helping us resolve.
Awesome, and you talked about
when you're having the brick-and-mortar
experience you really want it
to be integrated,
but I'm sure there are challenges
along the way in creating
that unified experience.
I think as I mentioned,
we were going on a
very aggressive schedule
to launch these stores
and coming from a digitally native side,
we do have our payment platform.
So the priority there was speed to market
and with Stripe Terminal, it was just kind
of plug and play, almost like that.
I was just talking to
Dave and Rob from URBN backstage that
for us, we have a big store opening,
I'm not kind of going up
and down about that
because of Stripe Terminal,
that takes 100% off our in-store payments,
it unifies the experience.
It's the same architecture
and the platform that's scaling
whether online
as well as in our store,
so that's beautiful.
Yep, so you started talking
specifically about some
of the things you've done with Stripe.
Anu,
in building a marketplace,
you guys could have built out all
that functionality in-house,
but you went with Stripe Connect.
What drove that?
Yeah, so for us mainly the first thing is
it's about expertise.
We are experts at art.
We are experts at auctions,
but we do not know payments
and we don't want to be in the business
of figuring that out.
Second to us,
it's the opportunity cost of that time,
right?
We have certain things
that we need to build.
So we are thinking of more immersive
auction experiences.
We're thinking about
“How do we bring the galleries to life
on the site?”
We would rather let the experts do
what they're good at,
and Stripe is an expert at this,
and we would like to let them
kind of handle this piece
of the puzzle for us.
So it's mainly around that.
And Aanan, Wayfair has long
invested in ML and AI.
And so how are you thinking
about shifting that
as you continue to partner
more deeply with Stripe?
I think what Anu was saying
resonates a lot.
Our entire shopping journey needs
to be hyper-personalized,
that's where I guess
the delight and inspiration
and emotion that I'm talking about
comes truly alive.
So when I have to step back
and think about our payments journey
and our fraud protection,
that's where I always kind of step back
and think from the perspective of,
where is the reach
that gives me the best of the decision
and the quality of the decision
and the signal that we were talking about
this morning
in a keynote and the ROI of resources
and the reach of the data—the scale
with our collective businesses
and customer from the data perspective
that partners like Stripe can have,
we cannot reach that independently.
So that's where it is always going
to be build versus buy consideration
and hybrid portfolio of ML
models that we deploy
and leverage throughout
the customer journey.
Not just to protect ourselves
with the use cases like identity
or account association,
but also improving the
entire shopping journey
experience or a return experience,
what we can offer,
leveraging some of these signals
that are available to us.
So the Radar announcement
this morning is also close
to my heart.
Good yeah, we'll take it.
Awesome well,
thank you both for your time.
I really loved hearing
about the importance
of customer trust.
I think hearing
that trust is something you can
put on your balance sheet is
probably something
most of us should aspire to,
and certainly the fact that the payments
and the customer experience
are inextricably linked.
So thank you again for joining us.
Of course, thank you for having us.
Pleasure.
(audience claps)
(upbeat music)
Now we're not quite done yet.
Our next set of speakers
are industry leaders in particular;
they're ones who I view to be two
of the most innovative partners
and market makers.
I know that hearing from them
will give you a sense
of where the industry is headed so
that you can bring back these insights
and learnings to apply them
to your business.
And with that, I'd like to invite
Vanessa from Visa
and David from Klarna to the stage.
(upbeat music)
First and foremost, thank you so much
for partnership, from both of you.
I'll just dive right in.
David, you and I probably talk
weekly at this point.
Yep. I think the last time
we got together in person was in New York,
and I remember you telling me
about how Sebastian,
your founder and CEO, is now spending
eight hours nonstop
on nothing but AI
every single day of the week.
So I would love it if you
could talk a little bit
about what Klarna is doing with AI
and both the things that
have been exciting about that,
but also some of the challenges
in sort of being at the forefront.
Yeah, sure, look, and it's a huge focus
for us at the moment, there's no question.
Earlier this year we launched our
AI assistant,
and the results are pretty incredible.
In its first month,
it dealt with 2 million
individual customer requests.
It's basically doing the work
of 700 agents.
But I think what's really exciting
is, it's not
just an efficiency play,
the quality is better.
CSAT has improved,
time to resolution
has gone from 11 minutes to 2 minutes.
And so we're seeing a lot of success.
The thing that gets us excited, I think,
is it's not changing our direction.
What it is doing very meaningfully is,
there have always been a lot of things
we've wanted to do,
but there have been technical limitations.
And I think for the first time
it feels possible
to do some of those things.
Having a true financial assistant,
having a true digital shopping assistant,
all of those things feel true
or feel achievable in a way
that they haven't previously.
And not achievable in a year
or two years, like achievable in the very,
very near term.
That's exciting and look,
it's not all easy though, right?
Like the, the challenge you have is
the LLMs we're working
with are very, very good
at getting you an 80% accurate answer
and very, very bad
at getting you 100% accurate answer.
And so we spend a lot of time,
and it's the stuff that
people don't focus on.
We spend a lot of time just
on the underlying data schema
and making sure the data is accurate,
the information is consistent,
that's been a challenge,
but something that I think we've made
a lot of success with.
Yeah, I think we've had a similar learning
as we've been building out
our own foundational models.
Vanessa
a lot of the emphasis on AI
right now is the upside
of these new experiences.
But I think one of the things those
of us in payments
are also paying attention
to is it's definitely going to open up
some new fraud vectors.
And so that's something
we've been collaborating on.
Would love to get a better read on some
of the things Visa has in store for AI
to help us all combat fraud.
Yeah, absolutely.
I mean, I think we all think about fraud,
but at Visa it's something we wake up
in the morning thinking about.
We think about during the day
and when we go to bed,
and we've actually been using AI
and machine learning for more
than 30 years to combat fraud.
In 2022, we stopped $27 billion
of fraud on the system.
But as you said,
you have to constantly evolve.
And with Gen AI,
we're investing for a couple of reasons.
One, we think there's real
opportunity to continue
to make those fraud models more robust,
more resilient,
because bad actors
will use all these same tools.
But second, which I think is really
important is, it's not
just the fraud side
that's going to change, it's also
how people shop and how people transact.
So if you think about the fact
that the models have all been tuned
to a set
of shopping behaviors
that we've all understood over
years and decades,
as those behaviors change,
that will also
necessitate changes in the model.
So I think of this period
that we're going into as kind
of the messy middle.
Like we're going to have
old shopping behaviors
and we're going to have new
shopping behaviors
and commerce behaviors,
and we're going to have to ensure
that models are adept at handling fraud
across both of those.
And that's part of the reason
that at Visa,
we're investing
$100 million dollars in a venture fund,
specifically focused at Gen AI,
so that we are working
with the most cutting-
edge companies out there.
We really think this is a space
where it's not only about
your internal capabilities,
it's also about partnering,
like partnering with Stripe.
So we're excited about
both what we're doing within Visa,
but also how we can bring
advisory services, partnerships,
etc., as we all navigate
this changing landscape,
both on the fraud side and on the commerce
and transaction side as well.
Yep, you're talking about
changing behaviors
and I think everybody in this room
is also trying
to figure out what are other ways
we can drive top-line growth?
And so I thought David,
maybe we start with you here.
One of that is tapping
into new demographics.
I think a lot of folks are still trying
to figure out Gen Z; I know few companies
who have figured it out
better than Klarna.
How do you really think,
what is it that you're doing
that's made you so effective
with that audience?
Yeah, look, thank you.
I think we really think
about it from a brand perspective
and from a product perspective.
On the brand, if you zoom out,
like what is the broader
demographic change that's driving,
that buy now, pay later
growth you were referencing.
I think it is the fact
that younger consumers
in particular feel just differently
about traditional credit.
So we have very consciously tried
to build a brand that looks different,
feels authentic,
feels fun,
we're pink, everybody else is blue,
they're blue because someone
in the ’80s decided blue
was the color of trust.
Got blue behind us. We got blue behind us.
But like we really
think that the authenticity
of the brand is really, really important.
And I describe our industry as one
that has many companies,
but very few brands.
Visa is a great brand,
Stripe is a great brand,
but most consumers don't know
what they're paying with.
We've really tried to build a brand
that can forge an emotional connection
with a consumer
in the same way that American Express did
but just with a different demographic;
we've really targeted a younger audience.
And then on the product side,
just as it's an industry
with many companies, few brands,
it's a very transactional industry.
And no disrespect meant,
but nobody opens up
their Bank of America app
and expects an exciting experience.
It's a very transactional experience
and we just have a different ambition.
We want to save a customer money,
we want to save them time,
all of those transactional things.
We would also like to spark some joy.
And so we've spent a lot
of time just focusing
on building a product
that feels more intuitive
to a younger consumer
that feels more engaging.
So it's the combination
of those two things,
I think, building a brand that
consumers can relate to,
that they can trust,
they can feel good about,
and then making a product that
just feels very, very relevant.
And the combination of those two things
has worked really well for us.
Awesome.
I know a lot of us have been used
to operating in a more stable
macroeconomic environment.
COVID starts and sort of
in subsequent years,
there's just been a lot more dynamism
and Vanessa,
I think Visa's
economic reports that you all put out
have been one of the things
like I look for and always read
through the day you guys publish it.
So, would love to get a read on some
of the bigger trends you guys are seeing
'cause you often are at the forefront
of the customer transaction data
before the rest of us really
see where we're going.
Yeah, it's something that
because we operate so globally,
we are able
to watch those trends.
And I guess just a couple
I would pick out, right now,
we're now seeing
outside of the US about 79%
of face-to-face transactions
are actually Tap to Pay.
And that's really important
I think in particular
in this audience because
what's underneath that number is
that you're seeing more
and more small, what used
to be cash transactions,
moving into other modalities.
And you see that,
you see payment volume in the US is up 6%,
but internationally it's up 11%,
cross border, it's up 16%.
All of that is sort of pulling on
“How do we continue
to make sure that people
have more options in terms
of how they want to pay.”
I was listening to some of
the presenters earlier talk
about embedded finance.
This is something that
we've been talking about for years
and years, but we feel is at
a real inflection point.
That's why you're hearing it
on so many stages right now,
because compared to that
payment volume growth
that I just talked about, we anticipate
that embedded finance
in the next 18 months is
going to be a $7 trillion market.
That market is growing 24% annually.
So when you start to think about
that notion
of bringing more ways to pay,
having more places to pay,
having more options
in terms of how individuals
and businesses want to transact,
that's where a lot
of that growth is coming from.
And to bring it full circle
to those small merchants
I talked about at the beginning,
when you think about embedded finance,
what you're really doing
as you bring those transactions
closer into the companies
is you're increasing liquidity
across the long tail of the system.
And we can talk about that for hours,
but what that's going to do is just improve
the working capital situation,
the ability for small businesses to grow.
So it's something that at Visa,
as we think about sort
of being the best way to pay
and be paid, if we can together
as a community, help get
that liquidity across the long tail
of small businesses
as well as large enterprises,
we think embedded finance
will be a real unlock there.
So something we're looking at closely.
Absolutely, we published our annual letter
about a month ago in March, and Patrick
and John said, “We anticipate the world
of 2034 will be meaningfully different.”
Would love to get each of
your takes on what will be
meaningfully different about it then.
David, why don't you kick us off?
Sure, look, we had this vision
about five years ago
of what we thought the future
of financial services would look like.
And it really is a scenario
where you're sitting at home
and your Alexa goes, “Hey Jeanne,
we found you a cheaper mortgage.
Just say yes, if you would like us to
shift for you.”
And in that world, who do you want to be?
And we decided we wanted to be
the digital assistant.
And so I think where you'll see a lot
of innovation and time spent
from Klarna, it's like,
how do we become that everyday partner
for a consumer
from a shopping perspective,
from a financial services perspective,
whatever it might be.
And the rationale behind that is
if we can create a really differentiated,
personalized experience
for a consumer that's relevant,
timely, interesting,
that will unlock an enormous amount
of value for our retail partners.
We are just a network.
We've got 150 million consumers
on the one hand, 30 million
of them using our app every single month.
We've got a half a million retailers
on the other.
And we spend a lot of time thinking about
how we connect those two audiences;
that's sort of the value
creation piece for us.
So first of all,
I'm terrible at predicting the future.
So I don't exactly know
what things are going to look
like 10 years from now,
but I will tell you that
if we look at just trends
that we're seeing today
and where those might carry over,
one thing I think is really important
in the here and now
that is going to be important 5,
10 years from now,
is how we encode transactions.
So if I just look at
what Stripe and Klarna
and Visa have done together,
Klarna, I think you're one of
the top token requesters
through Stripe, 21 million tokens,
that's something like $1.7 billion
of safer, more secure payments.
And if I look into the future,
I think we're,
as an industry, going to start to think more
and more about how do we safeguard,
how do we ensure
resilience and reliability,
but do that to your point earlier
of what clients want,
what customers want in a way
that doesn't
make sort of baggage on the payment,
but actually makes it so
that you can be sitting there
in your living room accepting
a mortgage or conducting
whatever transaction you want to.
And so we spend quite a lot
of time at Visa on those
infrastructure building blocks
for what we think will pave the way
for the kind of experiences
that you described.
Yep, totally agree.
Hey, and can I just say like a lot of
what we've been able to achieve,
we have only been able
to achieve because of partnerships
like we have with Stripe
and the technical foundations
that support a lot
of the big ideas that we have
are only possible
because of what we're able to do together.
So, thank you very much.
Thanks, really appreciate that, David.
Sounds to me like next year
I get to say, “Hey Klarna,
find me a Stripe Sessions wardrobe.”
Yep.
And maybe we'll be announcing
that we are tokenizing all the things.
So thank you both for joining me on stage.
Thank you, Jeanne. Thanks.
(upbeat music) (Audience claps.)
So to recap what we've learned
in the past 30 minutes,
one, enterprise leaders are looking
at new business models
to help them rapidly
address shifting consumer expectations.
Two, the era of Gen AI is upon us,
but there's no 80/20
when it comes to accuracy
in financial services.
Companies need to invest
in their payments data
in order to get it right.
And then three,
AI will unleash new fraud challenges
we've never seen before,
but partners
with massive networks
will be able to combat that.
We've got a number of breakouts lined up
to dive deeper into these questions.
Highly recommend you guys
check out the payments roadmap
this afternoon
and make sure you stop by the expo hall
to get a glimpse of AI at work.
We've got robot stone carvings,
prompt engineering, dubbing,
and more there.
Thank you very much for joining me
and enjoy the rest of your conference.
(audience cheers)
♪ They say love ain't nothing but a sore ♪
♪ I don't even know what love is ♪
♪ Too many tears have had to fall ♪
♪ But you know I'm tired of it all ♪
♪ I've known terror, dizzy spells ♪
♪ Finding out the secret words won't tell♪