Panel talk: The payments landscape in 2020 Pt. 2

On the panel:
Liz Lumley, noted fintech commentator
Alain Falys, Co-founder and CEO, Yoyo Wallet
Matteo RizziCo-founder, FinTechStage @matteorizzi
Sam Tidswell-Norrish, Principal, Motive Partners

Part two. 

We asked four fintech influencers and investors to predict the fortunes of some of the most significant payment innovations that have emerged in the last few decades, and what trends in payments they’re most excited about.

Year of release: Late-1990s (PayPal’s predecessor, Confinity, launched in 1998)

Top providers: Apple Pay, Samsung Pay, Google Wallet, Android Pay

Adoption rate: 150 million Samsung Pay, Apple Pay, Android Pay users by end of 2017 (Juniper Research, 2017). Paypal has 179 million active accounts (Time, 2016)

Liz Lumley: E-wallets didn’t really seem to catch on with consumers. Any new solution you launch to consumers shouldn’t have a learning curve, and there’s a huge learning curve for e-wallets. [For any new payments innovation,] you need to have the merchants on board, and putting in a POS terminal is expensive. That disjointed customer experience depending on where you go is really killing the customer experience with things like e-wallets. You need to have a standard system, kind of like what happened with the credit card scheme, when Visa and Mastercard got together and launched a global standard. You can’t have competing e-wallets – it’s just not going to work for consumers.

Alain Falys: What the industry call colloquially the ‘Pays’ – Apple Pay, Samsung Pay, Google Pay, Chase Pay – all they’ve effectively done is shift from a contactless card experience to a phone-based experience. These payment systems, mobile or not payments, are not solving any particular problem as they are. Retailers get paid anyway. The adoption of mobile-based payments will be driven by personalised loyalty, personalised marketing, and not by the payment system alone. The payment is the means to an end but it’s not the means itself.

Matteo Rizzi: People associate the way they pay with a bank they belong to. Apple Pay remains a geek thing. For it to become mass market, I think there is some cultural step that needs to happen that hasn’t happened yet, like associating Apple with a bank rather than a form of payment. I don’t think that the mindset of the masses is ready yet to bank with Apple.

Sam Tidswell-Norrish: There are many different descriptions, definitions, functionalities and capabilities these wallets have tried to tackle. I think that Apple’s is as close as we’ll get to e-wallets, and it’s provided through our phone provider – you can see it in your front screen now. Outside of that, mobile banking through the open banking standard and PSD2 may provide very similar services. Mobile banking apps are now commonplace, everyone has one on their phone, and I think that they’ve superseded the e-wallet.

Looking forward

LL: I love my phone, but I don’t like the idea that mobile means a phone. I think a mobile should mean you are mobile, so when you put applications on a phone you’re designing for the device and not for the customer and I would love to see ways to pay that aren’t completely constrained by the phone. If having payments is more about you being mobile than about some device you might [carry], then you own
your digital identity.

AF: I’m excited by the fact that in 2020, in urban areas, people will be able to come out of their office at lunchtime, or out of their homes at the weekend, with just their phone. Everyday retail outlets out there will accept any mobile-based form of payment. The precondition for that, though, is having an advantage beyond the act of payment, otherwise we will not see a major difference between 2017 and 2020.

MR: I am most interested in identity management, and the consequences of having a widely adopted digital identity system like the state-governed Aadhaar in India, which has issued IDs to one billion people. I am excited by the opportunities that having people digitally identified, and mixing that up with some biometric form of identification [to enable payments].

ST-N: Seeing how parties collaborate, work together to create economies of scale and share best practice, will be interesting. The next three, five or ten years are going to see a lot of change, possible creation of new utilities and more efficient ways of doing things for consumers and customers alike.

This article was originally written for Payments [R]Evolution magazine. Catch up with part one here

Related reading