It is well understood that evolving business ecosystems promoting a frictionless payment experience for consumers, but what are the trends regarding embedded payments? What new products, services, and transaction models enable next-generation payments? And importantly, what are the hurdles that financial institutions and fintechs are yet to overcome?
These questions were all canvassed by panellists during the EBAday session, ‘On the way to invisible payments,’ during day one of the event.
When moderator Laura McDermott, head of SEPA product, NatWest asked the panel to consider the largest hurdles that come with invisible payments, Lewis Nurcombe provided the fintech’s perspective. The global VP of sales for CurrencyCloud stated that “It’s no surprise that a lot of us are a little bit concerned about the change in the market environment."
“If we agree that we expect a lot of the innovation in this space to come from fintechs, those fintech need funding. A lot of these solutions aren’t necessarily revenue generating, they’re exciting opportunities that could change the way the payments work in the future. That’s a real threat."
Another “wider” threat that exists from a fintech perspective is around consumer adoption, Nurcombe stated. He argued that while there is some fantastic technology and fantastic people working on new technologies, it is very difficult to acquire the customers to bring these solutions into the mainstream.
“Frankly, I work for a company called CurrencyCloud, we've been acquired by Visa for exactly that reason. We were doing well, but to really break into the mainstream, we needed that support of a big organisation.”
Veronique Steiner, executive director, head EMEA high growth tech payments, J.P. Morgan, added that blockchain is a factor which should be considered insofar as its ability to help to overcome the hurdles of invisible payments.
“It is a secure technology that can provide support from a data personal perspective. The friction of the payment is always the biggest issue.” Thinking about B2B payments, Steiner added that if you need to pay somebody in Malaysia, for example, there are challenges around being able to connect and exchange data in a secure way. “The new technology-backed innovation is a significant support to the bank while still securing these payments.”
Erwin Kulk, head of service development and management, EBA CLEARING, furthered that we have already solved some hurdles in the space.
“We’ve solved many hurdles, especially in Europe with SEPA and instant payments […] What was interesting to see was that technology was something that needed to be overcome to arrive at invisible payments.”
Kulk added that its also important to leverage the existing building blocks to see if something can be built. If you want to be a successful player in the space, “you need to have a good monetisation of your investments, and leverage building blocks such as request to pay and instant payments to achieve invisible payments.”
Furthering on Kulk’s point regarding monetisation, Ad van der Poel, managing director, co-head of product management, GTS EMEA, Bank of America, asked whether we should even be monetising invisible payments at all. “We as providers would like to because it’s our core business. But if you’re a retailer and really just want to sell your goods and services, the payment is just a follow up and a decent way to generate revenue and you want it to be frictionless.”