19 December 2014

Richard Davies

Richard Davies - Logica

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APAC: the cutting edge of high-speed payments

24 June 2011  |  4388 views  |  2

We’ve all seen the global rise of instant communication methods such as email, twitter and text messages. This push for instant-access services has resulted in consumers and corporates wanting to communicate with their bank in an equally rapid manner. While Asia Pacific as a whole is often viewed as a little less advanced that the West. In some ways this is true, but the more developed countries in the region can offer insight for those wondering about the effects of rising demand for small rapid payments.

Asia contains some of the most advanced countries in the world, like Australia, New Zealand and Japan. In these countries, we’re increasingly seeing consumers looking for high-speed banking services as a standard. Many banks have heard this call and are moving to adapt their payments mechanisms to meet these demands.

In Australia, bank-owned payments company BPAY is developing its Me And My Bank Online (MAMBO) project. When finished, it will allow consumers in the country to make speedy online micropayments more easily. Following this, a similar service is already being developed by PayPal, which doubled its APAC staff numbers last year, noting a 38% increase in APAC payments over the previous two years.

Across the water in New Zealand too, financial institutions have been modernising their high-speed payments infrastructure. ANZ – New Zealand’s largest bank – just implemented a new payments system, giving the bank centralised hub for processing high volumes of micropayments expediently. The bank then launched its ‘GoMoney’ application for smartphones – allowing consumers to send money to each other using their mobile phone number. Applications like this certainly tap into the trend of instant communication and are proving popular – GoMoney was downloaded over 30,000 times on its release day.

Asia Pacific institutions will need to look at how they intend to adapt their systems to cope with these changes. It’s becoming clearer now that high- and low-value are no longer useful concepts. The demand for small real-time payments further reinforces this, and indicates to banks the need to look at payments processing in a more holistic way. Banks should also look at their back-office systems. Here in Asia, we’re used to reading stories of large banks failing due to outdated systems collapsing under the load of payments they need to manage. This workload is just going to increase as making rapid small payments becomes ever popular. It’s not all bad news though. Those who do invest will be able to expand their product range and customer base via innovative new platforms.

As with many Asian technologies, I expect this trend of high-speed mobile payments to spread to the US and Europe. Banks in these regions would do well to pay close attention to how their counterparts in the East deal with developments, and begin to prepare themselves for the next wave of Asian innovation.

Comments: (2)

Nick Wilde - Fiserv - Singapore | 27 June, 2011, 01:14

i think the spread wil be multi-directional rather than east-west and each country/region will implement solutions influenced by cultural, economic, demographic and technology factors. i would also argue innovation is already breaking out all over in this space. in usa for example fiserv offers its cutting edge zashpay p2p to banks and consumers. in asia we have done some innovative mobile bank work in cambodia and many banks have had p2p through atm's for a good while. india, south africa and philippines also have organisations doing imaginative and exciting things for their customers.

payments will continue to be an interesting space for a while yet and as richard notes technology and those of us who sell, implement and support it are going to have to step up more than ever.

(apologies for lack of capitalisation, can't get the comments engine to recognise their input)

nick

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 27 June, 2011, 15:59

CAPITALIZATION TESTING, 1-2-3... Seems to work fine for me.

Having gotten that out of the way, let me note that Singapore is conspicuous by its absence in this list of APAC countries with cutting edge use of retail payments technology. Over 10 years ago, well before NFC and contactless became buzzwords, Singapore set up a road toll collection system based on RFID contactless prepaid cards. Called ERP - no relation to the better known Enterprise Resource Planning software - it permitted motorists to drive past toll arches at normal speeds and have the dynamically-computed toll charge automatically debited to the prepaid ERP card affixed to the windscreens of their automobiles.

Apart from a similar system planned for commercial vehicles (LKW) in Germany - which, if memory serves right, was abandoned in the mid 2000s - Singapore's ERP is probably still unique.

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job title Director Global Products Business APAC
location Singapore
member since 2009
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Business Development for Logica Financial products currently focused on Logica's new Payments Service Hub (LAPS) which incorporates components for wholesale payments, retail payments, intraday liquidi...

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