A brief into the future of payments industry future

1. LAB CONNECT 4
1

2. Future of payments
2

3. Future of payments
3
Agenda
 Changing world of payments

4. Future of payments
4
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.

5. Future of payments
5
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

6. Future of payments
6
Mobile Wallets Contd..

7. Future of payments
7
Branded Apps
As 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.

8. Future of payments
8
Wearable Gadgets
Internet-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.

9. Future of payments
9
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.

10. Future of payments
10
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

11. Future of payments
11
EMAILS, TEXTS AND TWEETS
Today 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.

12. Future of payments
12
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%

13. Future of payments
13
 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.

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

15. Future of payments
15
 BRANDS AS FINANCIAL INTERMEDIARIES
Retailers: 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.

16. Future of payments
16
Trend Drivers
Fewer 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.

17. Future of payments
17
Fraud Prevention
In 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.

18. Future of payments
18
Fraud Prevention

19. Future of payments
19
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.

20. Future of payments
20
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.

21. THE END
21