After a frantic few days in Copenhagen for Money 20/20 Europe, I’m finally back at my desk. The flight home gave me a bit of time to digest the discussions and presentations and, amid the melee and company announcements, a few themes stand out.
1.Let’s get wallets out of the way first. The majority of industry folk now admit that wallets are not where we wanted or expected them to be. Adoption of the ‘Pays’ is happening, but it is painfully slow. Take me as an example, I have Apple Pay, Android Pay and Samsung Pay on my devices but, more often than not, tap my contactless card. And I’m a self-confessed payment geek.
The crawling pace of adoption is bringing discussions on ‘value’ to the fore again (I know, I know…). Many (including me in previous lives) have been banging the value-added services drum for years, but now is the time where it can actually make a difference. The ‘Pays’ are out there, user experience is getting more seamless, more banks are signing up – they just need a reason for consumers to use them and payments on their own are not a sufficient driver. Rewards, in-app and online payments, offers, transaction notifications; these are the things that will change consumers’ habits and we’re about to see a lot more of them on offer.
2.Lots of discussions on our stand related to secure biometrics and strong authentication. With PSD2 and 3D Secure 2.0 looming, the FinTech industry is scrambling to understand how authentication will work, if it is possible on time and how a consistent user experience can be locked down. On-device biometrics will likely form a part of the strong user authentication method for service authorisation and/or access to apps and services, but how this will shake out remains to be seen. Hardware security on devices will be essential, though, to protect users’ identities, data and services and we’ll be working closely with the key players to share the benefits of trusted execution environment (TEE) device security.
3.Talk of invisible payments was also everywhere. Retailers are still talking about the idea of own-brand wallets. They are in a position to take control of the in-store buying experience and push the act of paying into the background. If they can identify their customers earlier on – as they enter the store for example, rather than at the checkout – they can personalise offers, deliver a more engaging experience and even remove the payment process altogether. All through an app. The ‘Pays’ would also like to be enablers here, but how they do this is still to be seen.
Spend is often higher when payment is taken out of focus, stores would need less checkout infrastructure and customer engagement and loyalty would be greater. Fewer overheads, more revenues. Security and privacy – both for the consumer and for the store – obviously need to be considered from the off but, with fraud management in the cloud and app/hardware security on devices, this could become a reality very soon.
4.For the first time, next gen mPOS and PIN on glass are being seriously explored. But how do we get there? We have one eye on the new PCI standards that are set to come out at the end of the year. Hopefully these will bring some clarity. Beyond that, TEE technology in smartphones is already able to secure the display and enable secure PIN entry, perfect use cases for using smartphones as mPOS devices. Very soon we could be tapping our smartphones or cards on another smartphone to initiate a contactless payment, before securely entering our PIN into the merchant’s device. It will require some consumer education to bring trust, but it opens up a huge range of opportunities for small-scale retailers.
5.The Chinese giants are coming to Europe. Some of the most interesting conversations were around players like AliPay and WeChat Pay launching in Europe. It’s going to be really interesting to see how much adoption they can generate. The QR code payment method will not be familiar for many, but the combination of secure biometrics may see people look past this. To my earlier point, if they manage to offer VAS quicker than the ‘Pays’, we may have an interesting land grab for mPayments supremacy on our hands.
6.Finally, as always, the machines are coming. Artificial intelligence seems to have become the new buzz technology. There are different opinions on the best use case though. For me, the most interesting ones are back-end fraud management and the live analysis of customer/purchase data to tailor offers and loyalty. Many projects look set to integrate AI in some way in the coming years, we just need to make sure it is up to standard to deliver a seamless and secure customer experience.