future of payments 2012 - david birch, director, consult hyperion (uk)
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Keynote: Drivers for Change in Europe
Dave Birch
Consult Hyperion
Future of Payments
Sydney, October 2012
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Agenda
Technology drivers
■ If you don’t have a mobile strategy, you don’t have a strategy
Business drivers
■ New business models are on the horizon
Social drivers
■ The most important, the most unpredictable
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Baseline
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Drivers for Change
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Taken from the
Centre for the Study of Financial Innovation
Research Fellowship on
Innovation in Payments
Sponsored by Visa Europe (2010/11)
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Technology Drivers
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The technology roadmap for the short- to medium-
term is actually pretty well-known and doesn’t
contain too many surprises
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Key Technology Drivers
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Moore’s Law will continue for the foreseeable future
The mobile ecosystem will take longer to assemble
(and is more complicated) than we thought
ID and authentication technologies, such as
biometrics, will change the mass market
Social networks and virtual worlds make the whole
real/virtual boundary a little fuzzy
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Business Drivers
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The business pressures are intense because of
downward pressure on interchange and new, non-
bank competitors exploiting new technology
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Key Business Drivers
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Adding value instead of reducing costs (like Google)
The entry of non-bank competitors (like Square)
The demands of retailers will reshape products and
services
Pan-European consolidation (the SEPA effect) will
begin to bite
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Social Drivers
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Social changes are the most unpredictable because
they depend on human nature. Fashions, laws and
trends are all out of our control!
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Key Social Drivers
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Balkanization and interconnection
Worsening identity theft and fraud means regulation
Falling tax revenues and economic efficiency mean
that European governments will have to take action
against cash
Consumers will be more open to considering
complementary and alternative money and payment
systems
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Balkanisation
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Every shopping mall, every transit system, every web property to have its
own payment system? That can’t be right, can it?
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Identity Issues
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Apart from the cost, if identity theft and account fraud gets worse, then “knee jerk” regulatory
responses could (eg, on KYC) will impair the development of new payment solutions.
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Economic Crisis
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Perhaps people are more prepared to consider alternatives to the
“conventional” money and payment systems
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War on Cash
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Perhaps European governments, driven by the need for revenues, will get
serious in the war on cash
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Some Predictions
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What can we see going on around Europe right now
that tells us something about the future of cards, the
future of payments andF the future of money?
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Example: Sweden
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A broad alliance of labour unions and other groups is working together to
remove cash from certain commercial areas
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Example: Netherlands
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Cash-free streets in Amsterdam, supermarkets hoping to be cash free soon (some already won’t
accept cash in the evening), bundled pricing for low-value payments, universal debit
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Example: Italy
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New laws mean that the maximum size of cash transactions is now €450
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Example: UK
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Well, we’ve decided to make some new coins and keep cheques but we’ve also started the Faster
Payment Service (FPS) and ban wholesaling of €500
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Comparison: USA
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The wallet wars have already started! Google, Square, MCX, Apple Passbook, PayPal/Discover,
ISIS and others are starting the transaction to cloud!
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Conclusions
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It’s not a bad time to be in payments as
competition means innovation
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Tomorrow’s Transactions:
thought leadership from Consult Hyperion
Read www.chyp.com/media/blog
Listen www.chyp.com/media/podcasts
Visit www.chyp.com
Contact [email protected]
Follow @chyppings
Thank You
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Dave Birch
[email protected] (and @dgwbirch)