Open innovation to build the future of payment

innovation written on a blackboard in a thought bubble

The payment ecosystem and the Fintech world in general are constantly evolving. In this environment, Ingenico Group created Ingenico Labs, in March 2015. This new department supports innovation across the Group through research, vision and partnerships. Michel Léger, Executive Vice-President Innovation at Ingenico Group who heads the structure, gives his vision of innovation and explains the role of Ingenico Labs.

In the constantly changing world of commerce, innovation is not a fad but a necessity to address new consumer behaviours and purchasing experiences resulting from globalization and new technologies. It is required to continue to help merchants adapt to changing interactions with their customers, whatever the channel or service. We created the Labs, an agile innovation department, nearly two years ago, to strengthen the capacity to innovate across the Group and anticipate changes in the payment industry.

Innovation is full of paradoxes: it implies challenging ourselves on a daily basis, while capitalizing on our areas of expertise to deliver concrete applications. We need to free ourselves from the constraints linked to our modes of operation and business model. This means isolating ourselves temporarily from the rest of the Group, while contributing to the evolution of our offering, and therefore collaborating with internal business partners to move on to industrial production. We constantly need to strike the right balance.

Electronic payment has been stable for the first twenty-five years (1980–2005). Its evolution followed digitalization in three waves corresponding to e-commerce, m-commerce and IoT. Historically, payment was the last step of the buying process. In a connected world, we cannot predict where payment will take place. Payment should follow consumers and enable them to complete purchases at any stage of their journey.

To address these evolutions, we have created Ingenico Labs and focused our strategy on all omnichannel use cases. The Labs is dedicated to the next generation solutions and global partnerships. We aim to help all our activities to better anticipate the opportunities that new technologies can create and accelerate the development of new innovative solutions. We concentrate our efforts on potential disruptions that can impact our markets in three to five years and either create them or build partnerships with companies introducing these disruptions.

Three main elements underlie our innovation approach and the Labs operations: a focus on use cases, the belief that contactless is an enabling technology, and our commitment to open innovation. User experience drives our work. We regard frictions, a term that refers to everything standing between consumers and what they want to achieve, as opportunities to innovate. The same applies to new trends such as consumers’ great appetite for immediate services or their no longer linear behaviour.

The Labs’ team develops concepts primarily based on use cases, rather than technology, on the condition that these are universal enough and devoid of friction. The Labs observes changing needs and social trends to solve problems before innovating and defines what the future of commerce will bring in the medium to long term. Thus the Labs works with Ingenico’s corporate strategy team and its customers.

The worldwide adoption of contactless technologies is growing extremely fast in the perspective of our payment ecosystem, making new use cases possible. The more familiar consumers become with technology, the more demanding they are in terms of user experience, which pushes our clients to innovate further and faster. Smart TVs, connected machines and touch screen devices are becoming the norm in our homes and we are rapidly seeing this preference extends into the retail sector. This evolution towards connected devices is still in its early stage but full of opportunities. Contactless is the obvious choice to integrate payment in a connected device. We are striving to use the technology at its best to make payments a seamless part of this tactile, immersive experience. As an evidence of this commitment, we will present the proof of concept of a completely new way to make secure online payments on a mobile device, at the upcoming Money 20/20 conference.

Open innovation seemed the most relevant framework. We collaborate with small and big players from the industry and outside, relying on both the flexibility offered by agile start-ups and the structure

existing within large firms. We initially entered a partnership with Intel, the world leader in processor chips for IoT, to bring secure payment into connected devices and thus root our payment acceptance expertise in the Internet of Things. This paved the way for Think & Go connected screens.

After a chance encounter with the start-up Think & GO in the aisles of the Mobile World Congress in Barcelona in 2015, Ingenico brought the payment component to their existing screen specialized in couponing and promotional offers. After an initial proof of concept, the solution was adopted by Institut Curie, the French Cancer research centre and hospital, for its annual fundraising campaign, as well as BNP Paribas to enable donations to partner charities at its flagship branch in Paris. These screens create new touch points between customers and merchants and now meet new use cases. They become pop-up stores for click and delivery or click and collect in holiday resorts; drive-to-store solutions in shopping malls, where consumers are invited to tap any NFC card on the screen to play games, win freebies or discount coupons redeemed in stores. A ‘Wall of Surprises’ was recently inaugurated at a major shopping mall in Paris and a connected screen installed at the Toronto International Film Festival (TIFF) in Canada.

Another example of open innovation is our partnership with students and independent developers through hackathons, following which selected projects can be commercialized. During our first hackathon in France, thirty-three projects resulted from the work of eighty developers and creatives who had forty-eight hours to come up with HTML5 applications. It was also an opportunity to identify new uses and to expand our application portfolio. We organize hackathons on a regular basis and the fourth one will take place in Las Vegas at Money 20/20.

In conclusion, I wish to add that, beyond the convictions which determine the work of the Labs’ teams, three fundamental elements in the payment ecosystem make an innovation reliable and viable from a deployment and adoption stand point: the trust users place in it, its value proposition and its universality.

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