John Chaplin on reimagining the Emerging Payments Awards for 2018

The Emerging Payments Awards returns to The Hilton, Park Lane on October 10th, 2018, recognising the foremost in payments innovation over the last year. But for 2018, they’ve decided to shake things up. To bring the awards categories up to date, the Emerging Payments Awards have brought in John Chaplin to reimagine the listings.

It’s easy to see why the Emerging Payments Awards selected Chaplin to rethink the awards categories for 2018. He was a Senior Executive at Visa and First Data, and sits on the board of a number of payments companies in Europe and Africa. His primary interest is payments innovation, and he is the Chair of the Global Payments Innovation Jury.

I spoke to John Chaplin about his revision of the categories, what to expect from the new list, and what he thinks will be the major changes in payments in 2018.

How did you approach your revision of the categories? What factors did you have in mind when assessing the current list?

I don’t think there was anything wrong with it before, it’s been working well, but there’s a lot changing payments. This was an opportunity to make the awards more closely reflect the most important issues for the industry, those that are at the cutting edge of innovation – where the money is going, where the interest is, and where the market’s changing.

What were your main focus areas in reassessing the categories?

Some of the awards were still in the world of prepaid cards, and some of the most innovative things reflected there were around the prepaid space. Now, most innovations tend to be mobile-first – rather than trying to figure out how to make existing products work on mobile, lots of the new products have been specifically designed for the mobile channel.

One of the things that came out of my work with the Payments Innovation Jury is that, in practice, B2B payments is a better area to invest in than B2C. You’re likely to make more money and it’s a better market. So I wanted a bit more recognition of the fact that B2B is actually where a lot of the action is.

Are there any new categories you’re particularly excited about?

These days in the payments business, the data is almost as important, and sometimes even more important, than the payment itself. The real value of it to the companies providing it is in the data, as it can fuel decisions around lending. I wanted to have an award that was overtly about data. We now have the Best Use of Payments Data as a category to reflect this.

There’s been a big debate over the last few years over whether fintechs are going to replace the banks. The debate has moved on beyond this now, because it’s become clear that you can’t replace the banks. The primary strategy is now cooperation. The fintechs have better technology, but the banks have the scale and the customer base. So we’ve introduced Best Collaboration Initiative as a category to reflect this – when a new player partners up with an old player to achieve something that neither could have done on their own.

If you went to last years awards categories, the world mobile never appeared anywhere. Which, if you think about the world today, seems weird. So another one of the new categories is Most Innovative Mobile or Proximity Payment, because we really wanted to get people thinking that mobile itself is really important.

I was also keen to highlight financial inclusion as an important consideration for the payments industry. The vast majority of people in Africa don’t have a bank account. The important thing here is making the most of the technology available to us to come up with workable solutions. There are lots of people in Europe who are inventing solutions for the financial problems that are prevalent elsewhere.

There’s a lot of opportunity overseas, as the European market is already quite saturated. We’ve also brought more members onto the judging panel from outside of the UK, because we want their expertise and we want to spread the scope of the Awards.

What do you predict the main areas of innovation in payments to be in 2018?

I think we’ll see more and more the innovation coming in the B2B space, because it’s very hard to make a profit in consumer payments, especially in Europe. You’d be better off investing in B2B in Europe than B2C.

I think that the impact of PSD2, in the short term, will be muted. I don’t think it’s going to be what the European commission think it will be, and I think that the eventual beneficiaries of PSD2 probably won’t be who we thought it would be, either. Regulators deciding how innovation should work is ridiculous, because how do they know? They’re not business guys.

I think the idea that new companies will come in and take business from the banks isn’t accurate. The reason being that I don’t think that consumer payments is profitable enough in Europe, and new entrants who don’t make money won’t survive. Consumers tend to want things for free in Europe.

Finally, I think that Blockchain, in payments, is massively overhyped. A lot of the investors will lose their money. I think Blockchain may have application in certain areas, but I don’t believe that it has an application in retail payments, because it’s too slow and too expensive. It costs $5 to process one Bitcoin transaction. So how about paying for a cup of coffee with a Bitcoin, where it costs $5 just to process the transaction? I don’t believe that retail payments and blockchain sit together.

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