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LAB CONNECT 4

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By-Manam Bharadwaj Access Plus Team

Future of payments

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Future of payments

Agenda Changing world of payments

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Future of payments

Changing world of payments New way to pay!!!!!!Digital technology is opening new ways to pay, many of them are seamless and secure unlike the traditional methods.Foremost amongst these is “Mobile Wallets” using smart phones to make purchases or peer to peer payments but various other ideas are coming to the fruition which includes wearable (tapping a watch, scanning a ring, etc) and biometric technology like pay-by-fingerprint.

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Future of payments

Mobile Wallets

Broadly speaking, mobile wallet users swipe, tap, wave or otherwise prompt a Smartphone to pay after initial setup

(providing credit card or bank account information and potentially linking to various loyalty programs).

Technologies vary but include near field communication (NFC), Bluetooth and bar code systems. For people with little to no

access to commercial banks, the advent of mobile money—texting to send or receive payments using basic phones—has

been a godsend.

203 MILLION+

Active mobile money accounts worldwide

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Future of payments

Mobile Wallets Contd..

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Future of payments

Branded AppsAs banks, tech giants and new entrants vie to dominate in the mobile wallet space, Starbucks and other brands are creating

their own apps, enabling frequent customers to pay seamlessly. In some cases—notably with taxi services like Uber and fast

food brands—the apps let users both order and pay, reducing wait times or hassle. In other cases, as with Starbucks, the

apps draw users by folding in loyalty rewards or coupons. Brands benefit by collecting extensive customer data and drawing

in impatient, cash-averse Millennial.

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Future of payments

Wearable GadgetsInternet-connected devices worn on the body—promise an even more seamless method of payment than mobile phones.

The vision is that consumers will simply hold up a watch, tap a wristband or perhaps issue verbal instruction to Google

Glass.

Glasses: Some mobile-payment players are betting on consumers paying with a gesture, tap or voice command using Glass or

other high-tech specs. Eaze, a startup pushing the idea of “Nod to Pay,” links to two bitcoin payment systems and plans to

add fiat currencies.

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Future of payments

Watches:

Several payment apps work in tandem with early entrants on the smartwatch market. These include PayPal’s app for

Samsung’s Gear 2 and WearBucks for owners of Android Wear watches.Wristbands: For people willing to link up credit or debit card information, smart wristbands may have a long-term role to play as a way to make fast purchases at events like music festivals or destinations like theme parks.

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Future of payments

Biometric payments

To improve security, businesses are starting to adopt systems that identify and authenticate people based on physical or

behavioral characteristics: iris scans, digital fingerprints, voice prints, vein or facial maps and so on. The method is also

more convenient for users than typing passwords, although privacy will be a concern for some. Fingerprint recognition, the

most widely used biometric system thus far, will become increasingly common now that Apple is embracing mobile

payments.

The Samsung Galaxy S5 enables

fingerprint payment via PayPal’s app

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Future of payments

EMAILS, TEXTS AND TWEETSToday more and more companies—from startups to financial institutions and tech giants like Google—are enabling person-

to-person payments, bill payments and product purchases via a simple message. For instance, French bank Group BPCE

will enable people to tweet money to one another via its S-money mobile-wallet subsidiary, thanks to a partnership with

Twitter. 

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Future of payments

New Payment Players:Disruption in the payments and currency sphere is opening the way for new players to act as intermediaries between consumers and their money.New offering in financial services from Google, Amazon, Apple, PayPal.

Mobile operators, tech giants and others are making forays into the financial space, taking on roles traditionally filled

by banks and other financial services companies. By doing so, these companies can track spending patterns and

behavior, as well as reduce interchange and processing fees. The mobile wallet is a key driver. Mobile payment

transactions facilitated by “non-banks” will increase from 1.1 billion in 2012 to 7 billion in 2015, according to a forecast

by The Royal Bank of Scotland.

of North American Millennial would be likely to bank with at least one nonfinancial services company if it

offered banking services*

According to Accenture 72%

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Future of payments

BRANDS AS FINANCIAL INTERMEDIARIES

Tech companies and messaging services are

well positioned to integrate payments

systems. Google now offers free P2P payments

through Gmail or its Wallet app, and South

Korea’s Kakao Talk recently launched the PayPal-like Kakao Pay.

Future of payments

Retailers and Credit card providers may need to compete for customers payment selection for every individual purchase.

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Future of payments

BRANDS AS FINANCIAL INTERMEDIARIESRetailers: Retailers have long provided financial services, but some are expanding more assertively into the space. Both Marks & Spencer and Tesco recently started offering personal checking accounts in the U.K.

Walmart has been targeting the underbanked. This year, the retailer launched a money transfer service—enabling customers to send funds to or from any Walmart in the U.S. and Puerto Rico—and partnered with Green Dot Corp. on GoBank, a mobile checking account with a linked debit card.

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Future of payments

Trend DriversFewer regulatory restrictions, emerging markets serve as fertile testing grounds for new payment methods and new players.

And with many consumers in these markets unbanked—outside the commercial banking system—alternative systems like

mobile money are flourishing. Telecoms have led the way when it comes to sending and receiving payments via basic

cellphones. Safaricom, in partnership with Vodafone, launched the most successful of these services in Kenya in 2007.

Nearly two-thirds of Kenyans now use M-Pesa, and 43% of the nation’s GDP moves through it.

The success of M-Pesa and similar services is prompting new ideas in developed markets. In the U.S., mobile carriers T-Mobile and Sprint have both entered into the mobile money space.

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Future of payments

Fraud PreventionIn recent years, both Visa and MasterCard have developed online fraud prevention tools (Verified by Visa and Mastercard SecureCode). These solutions both require customers to register their card details and set a PIN or password that must be entered to authorize an online transaction. Consumer reception of both tools has been somewhat mixed, primarily because it slows down customers at the checkout and requires them to remember an additional password. While these solutions offer an additional layer of protection (for merchants, consumers and issuers), they can disrupt the customer experience and can result in an adverse reaction from cardholders.

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Future of payments

Fraud Prevention

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Future of payments

Conclusion Industry should start invest in long-term innovation opportunities

by the unpredictable evolution of consumer preferences. The key initiative for a cardless future, including addressing any

security concerns inherent in contactless technology, working with mobile operators and others outside the industry to create a sustainable mobile payment ecosystem, and continuing to develop innovative new payment mechanisms.

Regardless of the scope of the innovation, any successful changes must reconcile ever-changing consumer expectations with deeply entrenched behaviours in order to produce as smooth and as graceful of a transition as possible.

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Future of payments

Conclusion Regardless of the scope of the innovation, any successful

changes must reconcile ever-changing consumer expectations with deeply entrenched behaviours in order to produce as smooth and as graceful of a transition as possible.

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THE END