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Massive innovations in payments … not?

Just been through a meeting on payments and all areas of payments from SEPA to Basel III, corporates and trade, risk and liquidity, innovation and change and more.

My role was to talk about all things that I see as innovative in payments right now.

That’s a long list and so, in the interests of brevity, here’s my summary:

  • Jack Dorsey’s Square which launched over a year ago, and is now processing over $4 million in payments transactions per day, compared to $3 million in  May, $2 in April and just a million a day in March. That’s a hockey stick curve if I ever saw one, and is the reason why Visa made a strategic investment in the firm back in April.
  • Google Wallet was an industry milestone when it launched in May.  It was a milestone because it gave the seal of endorsement for the tipping point of mobile contactless.  It has since led to wild speculation about Google’s long-term plans, especially as Chairman Eric Schmidt has recently predicted that 1 in 3 merchants terminals will support NFC next year, thanks to the card providers upgrading merchant terminals.  The result is the Mr. Schmidt expects such a development will prepare the ground for a “trillion dollar” industry of mobile advertising and payments.
  • Mobile remittances is still bubbling away nicely, as M-PESA’s lead is copied into multiple geographies.
  • Virtual currencies, such as Facebook Credits, are nibbling away at the bottom-feeding end of the market and may well be mainstream soon.
  • PayPal is finding itself under attack from the card firms, as AMEX, Visa, MasterCard and the banks with iDEAL and ePayo are targeting their schemes.  As a result, PayPal are fighting back with their own direct merchant offerings and the delineation between the banks and the disruptors are becoming blurred.
  • Small bank innovations, like those seen with Bank Inter with their biometric iPhone app, are going to be notable as payments developments move forward.
  • New payments processing capabilities developed on these ideas by innovative Payment Service Providers, such as those of Voice Commerce, are also well worth tracking.
  • Personal Financial Management tools, like Standard Chartered’s Breeze which is best-in-class imho, are taking off big-time this year.  It’s like Corporate Cash Management Dashboards of Treasury Workstations meet Retail Consumer Service, thanks to innovative software solutions.  A space to watch.

These are but a cream off the cake of the extensive list of innovations in payments that have been covered on this blog over the last year.

The only question I asked at the end of this list is: when will all of these innovations in retail payments hit the wholesale payments markets?

Apart from Voice Commerce, there’s a not a lot of change in the core processing of payments that’s out there yet.

This was the question we covered in our recent research: Are payments infrastructures fit for purpose?, and the answer came back that wholesale markets will focus far more on cloud computing and scalability than sexy things like mobile internet.

Not so sure myself.

I think the whole area of mobile internet can revolutionise the corporate-to-bank and bank-to-bank space  as much as the consumer-to-bank space, especially in the area of Treasury Apps for tablet PCs by way of example.

Would anyone else agree?


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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