Lysiane Back Banque et Caisse d Epargne de l Etat. Luxembourg. Payments are at the heart of today s financial services transformation

Transcription

1 Lysiane Back Banque et Caisse d Epargne de l Etat. Luxembourg Payments are at the heart of today s financial services transformation

2 2 A short review of Changes - Realities

3 3 Major changes in the last years (1) (non exhaustive list!) Changing in global demographics Young tech-savvy generation starts to take on leadership roles in global commerce, (new generation very familiar with the world of social media and e-commerce ) Geopolitically, the world is becoming increasingly multipolar (the rapid ascendance of China, trade flows are reshaped by the increasing engagement of developing markets ) Consumer is driving the change (demand of easy, efficient and faster payments, convergence of channels, data visibility with analytics capabilities, real time payment processing) Merchants are increasingly careful about which payment methods they offer to users, in order to minimize their charges, minimize dropout rates can assure a seamless consumer journey. Expectations from the merchants: acceptance, integration, limited costs New technology (specifically mobile and social media) is enabling payment services to be provided to unbanked customers Electronic payments are displacing traditional means of payments as cheques, cash

4 4 Major changes in the last years (2) (non exhaustive list!) Convergence between Internet and mobile (seamless transaction). Some e- payments transactions migrate towards m-payments due to increased use of tablets and smartphones Full checkout solutions are replacing simple payment gateways Cloud-based solutions and dongles offer more accessible solutions for smaller merchants (m-pos solutions) Take-up of crypto money Take-up of virtual currencies out of control of government as Bitcoin Globalisation, fragmentation of payment markets with the consequences of disintermediation of the banks in the payment industry (by a. o. leapfrogging counterparts) New actors are gaining ground in the more open space of B2B,B2C and C2C spaces and will unveil new value hot spots -> payments are a battleground pitting banks, mobile providers, retailers and other players against one another Large technology and social media companies such as Amazon, Google, Facebook are trying to enter into payment markets(with their considerable customer reach)

5 5 Major changes in the last years (3) (non exhaustive list!) E-commerce is spreading shift from cash-dominated F2F commerce to e- and m-commerce accelerating the reliance on electronic payments The introduction of Apple Pay will spark growth in contactless payments. Facebook, Google and Twitter announced end 2014 to offer snap chat payment solutions too in near future Actors as PayPal will enter more and more also in the F2F (offline) world Decreasing transactions fees and revenues. Regulatory (SEPA, PSD) and competitive pressures limit standard revenue sources Multiple regulatory issues impact directly or indirectly the payment business (PSD II, FATCA, AML, SEPA, e-sepa, guidelines for internet payment security in Europe, Basel and intraday liquidity norm, virtual currency regulations, financial transaction tax, cyber security directive, electronic identification and trusted services, etc.) New regulations dematerialising borders and enabling third party access to the current account (PSD, SEPA)

6 6 Realities (1) Global non-cash transaction growth continues Evolution is still driven by payment cards Developing markets and banks are establishing initiatives in order to compete cash, but with limited success Overcapacity in the payments processing space (meanwhile more than 120 payment options are available in Europe) Only a few will survive The rapid growth in contactless card payments is the single biggest trend in payments in some markets at the moment, Success stories of mass adoption of mobile/digital payments propositions are rare Hidden or unreported payment niches, continue to grow, as payments move away from the highly regulated banking sphere (closed loop prepaid cards; virtual currency; prepaid mobile wallets launched by retailers or organization including Google, Starbucks; payment aggregators as PayPal, Google Checkout, Amazon payments )

7 7 Fact is that the retail payment ecosystem is changing dramatically. BUT Is there really a market for all these offers? Are there really demands from customers and merchants? And when YES for what kind of payment services? Do merchants accept multiple payment solutions or are they expecting a limited range of offers covering worldwide payment facilities? Social medias as Facebook or Twitter, do they have to play a role in the payments domain? Can we 'Bankers compete with giants as Apple or Google in the context of wallet? Is cooperation on national level the way to go and when YES : how and with whom? Questions over Questions. Let s listen to our panellists about their experiences and their lessons learned?