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Earlier this month, Money20/20 Europe arrived in Amsterdam where industry-leading figures came together to discuss how payments are evolving and what we can expect from our banks and financial institutions in the coming years. Here is a summary of three key topics that were recurring throughout the event.
With PSD2 introduced in January 2018, open banking was a hot topic at Money20/20 Europe. Collaboration was often cited as the key to survival in this new world. As ING Group CEO Ralph Hamers pointed out, “You need to have a platform which is able to accommodate a competition, you can’t do everything yourself.” The role of a bank is evolving and fintech start-ups, such as Transferwise, Zopa and Klarna, are offering services that banks are unable to compete with. The CEO of BBVA, Carlos Torres Vila, believes traditional banks should embrace the disruption that fintechs are bringing: “We are moving from ‘money infrastructure’ to enabling people to live their lives more freely and make better decisions with their money.”
Visa Europe spoke of the importance of their partnerships, with PayPal and Revolut joining CEO Charlotte Hogg on stage, which was appropriate in the backdrop of the Visa network outage which occurred just three days prior to the conference. Hogg announced that they were investing $100 million in European fintechs, focusing on early-stage start-ups which have expertise in invisible payments – a move which recognises the importance of start-ups solving the world’s future payment problems. Facebook’s Elias Yazbeck summed up the mood at the conference with a damning statement, “We’ll either win together or lose in silos.”
There was a plethora of technologies being demonstrated at Money20/20 Europe, from finger vein payments to digital ID through blockchain, and it remains to be seen which will win in terms of benefitting the consumer.
Throughout many conversations, the Internet of Things (IoT) was touted as the technology that would fundamentally change how payments occur as they are pushed further into the background. Euromonitor International’s Michelle Evans spoke of how IoT is expected to be the most impactful technological advancement in the next five years with cars, fridges and wireless speakers expected to be new channels of commerce, according to Euromonitor’s Industry Insights Survey.
Although blockchain ranked low in the aforementioned survey, it seems to be gaining momentum. Steve Wozniak believes it will have its place in future society: “Culture doesn’t want to change so quickly. Blockchain is in a similar place to what the internet was in the late 1990’s – still in a bubble but going the right way.” Ann Cairns revealed how Mastercard has 60 patents currently pending in relation to blockchain technology as they bet on it creating a better user experience.
Artificial intelligence (AI) is further developed than blockchain, Wozniak said, but he thinks they are a long way off replacing humans. “AI needs to be more like humans so consumers can relate to them,” he said. “They need to have experience of life which requires human input and output. Robots have to learn the steps from humans first – a lot of growth is required.” Virgin Trains provided a practical example of how AI is being used in payments with £10 million having been refunded to their customers automatically using AI via their automatic delay repay system. Virgin Trains joined keynote speaker Amazon Pay on stage to explain how they are using Alexa to allow customers to book train tickets, which they claim is five minutes quicker than booking via a website.
Payments in Europe is culturally fragmented with local payment methods, such as the Netherlands’ iDEAL, becoming increasingly popular and it has become clear that the more payment types a merchant can accept than it will increase conversion rate, according to Sammee Zafar, Director of Edgar, Dunne and Company. Alipay’s Head of EMEA, Li Wang explained how there is more than 40 mobile wallets in Europe and they have to work with all of them: “Payment is a means to add value, we add value in different ways but we don’t need so many (wallets) – it’s a waste of resources.” Alipay has made its payment available for Chinese visitors across 18 European countries and since being implemented in German drugstore Rossmann, 92% of its 2,000 stores have had Alipay transactions.