Future Beyond Digital Payment

November 14th, 2018, Money20/20 debuted in Hangzhou, China, the heart of world’s biggest FinTech market, where Alibaba, Lianlian, Netease and other cutting-edge companies are based.

Money20/20 aims to explore trends shaping the future of fintech industry with a focus on payment prospects, gathering over 15,000 most innovative global and local leaders with speakers from Alibaba, Tencent, Grab and other major tech giants.

Technology nudging the era of friction-free payment

Consumers are looking forward to having a friction-free shopping experience, benefiting from the rapid development of digital payment — one of the most vital infrastructures in the Fintech era. The medium for payment procedure is getting increasingly digitalised, dematerialised and natural.

Undoubtedly, the smartphone has become the most indispensable device at the early stage of cashless society. We rely on it to scan QR codes in Singapore, get scanned by QR POS terminal in China or “kiss” the POS to activate the NFC (Near-field Communication) function in Canada when processing payments.

Wearable is gaining popularity in the payment playground. Apart from tech giants’ effort on innovative products such as iWatch from Apple, traditional watch manufacturers including Timex, Luminox and Guess also teamed up with tech start-ups to implement digital payment function for optimising effortless payment process. The integration of NFC and biometric payment adopted by latest wearable is likely to become the next milestone while the world steps into the dematerialised and natural stage of cashless society.

Chinese payment companies are exploring every possibility of non-carrier payments. To collect primary user information, Alipay encourages payment execution via fingerprint and facial authorisation. These authorisations have been leveraged in over 60% transactions during Double Eleven Singles Day 2018. Offline, Alipay has launched facial recognition payment terminals in hospitals and restaurants, exploiting on removing physical mediums.

Payment companies strive to smooth the procedure and make it insensible, due to payment is more and more seen as a basic infrastructure not a real lucrative product in the future. Companies with easier and securer payment solutions have better chance to win customers together with their most valuable gifts — data, surpassing those trying to survive by commissions only.

Data creating more value

“In the FinTech world, 1.4 billion population presents more than a huge market opportunity, but the data generated by them on a daily basis,” said David Wei, Chairman of Vision Knight Capital. The Fintech era is on the way. Tech Giants and financial institutions are speeding up transformation and empowering financial services by big data. Improving Marketing ROI (return on investment), risk management and financial service are most likely to be major areas of future data usage.

Ankur Mehrotra, Head of Financial Service at Grab introduced Grab’s vision of its move towards lending during his speech at Money20/20. Empowered by a large user database in Southeast Asia and strong support from global strategic and financial investors, Grab started to offer microloans to the unbanked and underbanked within its ecosystem. Tapping on the ride-hailing service customers data, grab financial provides sophisticated credit profiles combining riders’ feedback, telemetry data and insights from the Grab Rewards platform.

Hundsun Technology presented how it analyses financial trends, sensitive words and product demands via retail data and industry knowledge graph. According to Citi, another speaker at this event, consumer companies are focusing on digital transformation in multiple ways to engage customers and grow sales including building capabilities for 1-2-1 personalised communication, data collection and data activation.

Blockchain, the hottest buzzword

According to the Harvard Business Review definition, blockchain is an open, distributed ledger that records transactions between two parties efficiently in a verifiable and permanent way.  In terms of its applications, Chinese payment companies are rebuilding trust infrastructure to improve efficiency and quality in their digital ecosystems.

Ant Financial introduced its self-built Blockchain platform in Money20/20 to solve key technical issues for commercial approaches and serve the real economy. Ant Blockchain also made its debut during this passing double-eleven for tracking 150 million groceries globally.

Tencent presented its blockchain TBaaS platform, which has been leveraged in the insurance and healthcare industries. Traditionally, consumers spent days or even months to get the insurance fee perplexed by the intertwined file works from hospital to consumers and insurance companies. By utilising Tencent Blockchain platform, insurance clients no longer need to file documents as proof but typing the hospital name is sufficient to get the insurance part covered in real-time during the payment process.

China’s Fintech company also penetrating Blockchain into distributed ledger, notarial certificate, digital assets, traceability, IoT, sharing economy and more, to ensure greater transparency and efficiency.

To unleash innovation in the future

Payments are traditionally dominated by several strong players globally such as visa and master cards. In the 2000s, the arrival of PayPal introduced more competition, transforming the landscape of payments. In the early 2010s, Alipay and WeChat rode on the surge of smartphones and carved out a lion share of China’s payment market for themselves. This, however, is still insufficient to decelerate the pace of innovation. The breadth and depth of technologies showcased at Money20/20 suggest an accelerating pace of innovation. More is yet to come. Watch this space.