On May 25th, DBS, POSB, OCBC, UOB and SCB launched Apple Pay in Singapore and Visa customers can now use their payment credentials anywhere Visa payWave is enabled. This launch has many implications for the future of payments. Over the next five years, there is no doubt that the financial industry will continue to re-invent itself, and perhaps, at a much faster pace.
Banks are generally large institutions that are looking to become more agile and lean organisations. Although, the banking technology is robust, there might be some legacy systems that may present some challenges in terms of speed to market. In the next five years you will see banks developing the right connection with the fintech community so that they can improve the time to market and expand their innovation portfolio.
Consumers are changing and they are not interested in technology per se but rather what that technology can do for them. Thereforethe financial industry is changing and applying design thinking to put consumers at the center of their innovation.
Most financial institutions understand the challenge, and are responding in different ways: some of them re-staffing and upskilling their teams; some are launching innovation initiatives and collaboration spaces and some are heavily re-investing in emerging technologies APIs, Blockchain and other capabilities.
At Visa, one thing's for certain -- we will continue to work on multiple fronts with various partners on an open innovation platform to leverage the capabilities of VisaNet. One key area of focus will be around how we can collectively enhance the payment experience, specifically for mobile devices. Mobile devices today are not limited to just phones -- but a myriad of form factors including tablets and wearables -- devices which interact with various systems that sit on the cloud. This means that the mobile device is now proving to be an even more efficient channel to reach more consumers.
Currently, digital channels require human intervention. But we will soon see the next stage of this revolution with more connected devices – some call this the Internet of Things or IoT. I like to call it the Hyper Digital Stage – where we see machines interact with other machines, exchanging financial and payment instructions. Your printer is capable of buying ink when it's out while your refrigerator buys food for you when it's empty!
Today, we have about 10 billion connected devices, and according to Cisco System and other sources, this number will grow to 50 billion by 2020. We believe the future of payments and banking is highly correlated to our ability to connect these devices to commerce.
Two initiatives on our innovation agenda -- Visa Token Services and Visa Developer Platform -- are keys to enable collaboration among key stakeholders within the larger payment ecosystem, allowing us to turn ideas into concrete execution.