In a week when Alibaba consumers spent $14.3 billion online and via mobile, PaymentEye attended the Centaur Festival of Marketing 2015 to see how large tech companies and startups are innovating, discuss the future of payments and consider the question that has plagued philosophers dating back to Ancient Greece – to multichannel or not to multichannel?
1. Large companies investing in startups must have patience
Everywhere you look there’s a financial institution that’s starting a FinTech accelerator and investing large sums in new startups, but the big question for them is what metrics are put in place to measure their acquisition’s success? Saher Sidhom, founder of Hackmasters.co.uk, said companies should plan for a “five-year horizon, before you see a tangible value”. He stressed that companies shouldn’t be obsessed with the short-term as startups “might not make money in the first few months”, and cited examples of initial slow-burners such as Airbnb and Tesla.
— L Marks (@lmarks) November 11, 2015
2. Breaking the innovation barriers
In the same panel discussion, Shilen Patel, the CEO of Distilled Ventures, said larger tech businesses must be very clear about the need for innovation, highlighting “they are not entrepreneurs”. Instead, he said they need to know what they are good at and what value they can add to the market. Stuart Marks of L Marks Limited stressed that large companies that acquire startups need to know how they would “plug” the acquisition into the corporation. Andy Tait, the co-founder of the accelerator Collider, echoed that sentiment by pointing out that large companies need to be prepared. “The better you prepare, the more effective you are”. He said large companies need to be good at “mashing” two opposing worlds together.
3. Personalisation is the key to increasing conversion rates
Conversion rates are the bane of retailer that accepts online and mobile payments with 68 per cent of visitors abandoning their e-commerce shopping card. Nic Wenn, the CMO at Maple Syrup Media which owns money lending site Quidco, pointed out in a presentation about personalisation that 76 per cent of customers want personalised content, whilst a further 60 per cent want to receive personalised offers. However, he stressed consumers will not wait for it, the delivery has to be instant. He also said that consumers are always looking for more value and need to be enticed into making payments with offers or different ways to pay, hence why voucher sites are growing as well as loyalty schemes.
4. The future of payments is not about payments at all apparently
Steffan Aquarone, the founder of payment and rewards app Droplet, made an argument that the future of payments shouldn’t actually involve payments at all. Radical. He said, “Innovation is about taking steps away” and making the processes more human. Provocatively, he described payment companies as being “like drug companies” in the sense that they will never create something that would remove their source of income – in the case of payments companies, they would never remove the actual process of making a payment because that is where they make their money from.
His app features the now trademarked Zero Touch technology which essentially allows people to make payments without actually doing anything. This works in places that users visit frequently – the merchant recognises the customer, inputs what the customer wants to buy and the money is automatically taken out of the user’s account. Obviously this works in fairly specific scenarios, but who doesn’t have a local coffee shop where they go every day? Aquarone hammered home the purpose of innovation, saying it should be “for the customer’s sake” and “making things simpler and more human”.
"I worked on Masterpass & knew it would never work- I've been waiting for something like this to come along" is fav feedback so far #FOM15
— Steffan Aquarone (@Steffanaquarone) November 11, 2015
5. To multichannel, or not to multichannel, that is the question.
In a panel discussion on multichannel platforms, Lisa Wood pointed out that her employer, Atom Bank is not multichannel. In fact, it’s a digital-only bank, or will be when it officially launches in December. “We can’t be all things to all men” she highlighted. Wood also stated that “we don’t believe branches are here to stay”, an assertion that has recently been given serious weight after a report found that the rate at which banks are closing their high street branches is accelerating. Instead, argues that companies shouldn’t be obsessed with multi channels, but rather focus their energy on the relevant channels. She did point that for the companies that are covering multiple channels, the experience for consumers switching from one channel to another “has to be seamless”.
The Merchant Risk Council is a global trade association that brings together industry professionals in fraud, risk and payments. The conference saw speakers from the likes of from PayU, JPMorgan Chase, Google and Santander who all took part in educational sessions and spoke about where the industry is heading.
The Emerging Payments Association discuss the impact of Brexit on the fintech industry at the latest payments industry event.
Blockchain is going to be big. We know. Just like sessions at the subject at most other conferences we’ve been to recently, the blockchain panels and speakers at this year’s Tech Open Air conference in Berlin were packed to bursting.
If you think innovation in consumer cross border payments has been big, just wait for the business-to-business (B2B) side of the equation. Speaking at Money 20/20 Europe as part of The Bancorp’s Finetics™ Studio interview series, CEO Mike Laven talks about what’s next for cross-border payments.