FUTUREPROOFING Faced with all these innovations, existing players are having to look at how they might get disrupted, and are snapping up start-ups that look like they might be the ones to come up with the next big thing (see panel, left). Chillimint’s Jones says: “Mastercard and
Visa are really ramping up their technology, without a doubt. They are looking to do more partnerships and joint ventures, and acquisitions, to develop their proposition beyond being processing platforms.” Citi’s Robson sees this, too. “They have
been investing in lots of types of business to futureproof themselves, knowing that the old model will probably eventually wither,” he says. “As everything becomes more interconnected and the trust issues are resolved, that old network model may disappear.” The rate of acquisitions in the panel
illustrates this. And they are not just acquir- ing start-ups either: they are investing in innovative technologies themselves. One, perhaps surprising, innovation this year may eventually see the disappearance of the ’long number across the middle of the card’. Visa introduced its Visa Token Service (VTS) in September in a bid to reduce fraud. This re- places some of the information traditionally found on a card, such as the 16-digit account number, expiration date and security code, and replacing them with a unique series of numbers that can authorise payment without exposing actual account details. More than 500 financial institutions have started to implement VTS and it can now be used to make Visa payments through Apple Pay, for example, while many banks are rolling out VTS out for their mobile payment applications and services.
In association with
“As everything becomes more interconnected, the old network model may disappear”
Charles Scharf, chief executive officer
of Visa, says: “Removing card account numbers from the processing and storage of payments represents one of the most innovative and promising technologies we’ve seen in decades. This, combined with chip-card technology, advances in account holder authentication through analytics and biometrics, and more sophisticated risk monitoring, will allow Visa account holders to enjoy new, secure payment experiences.” Apple is not the only game in town either – Mastercard has a high-profile agreement with device maker Samsung for its Samsung Pay service which allows Galaxy S6 owners to pay from their phones using Mastercard and tokenisation. Ed McLaughlin, chief emerging pay- ments officer at Mastercard, said: “This is an exciting time for payments. As consumers are increasingly relying on their mobile devices in their everyday lives, we are excited to work with an industry leader like Samsung to deliver new payment options to our cardholders around the world. We
have been a pioneer of mobile commerce innovation for years, and together we’re delivering a digital payment experience that is both simple and secure.” Mastercard is also trying to identify
cool new technologies by other means. In March, it held an elevator pitch day with tech website Mashable in Austin, Texas, offering US$15,000 to one of the entre- preneurs. Jay Singer, senior vice-president, North America commercial products at Mastercard, said: “You never know where the next big idea might come from – some- times it just takes a little encouragement and the right opportunity.
ARE WE THERE YET? So innovation, it seems, is rampant in the payments sector. Right now, there is prob- ably someone wearing a lumberjack shirt and sporting a luxuriant beard working on a technology that will be gleefully welcomed by business travellers in the years to come. Funky smartphone devices and tablets, and the ways in which they can be used in the consumer space, mean that future travellers will be far more demanding than those of the past in terms of what they want to use in their business lives as well as their personal ones. The blurring between those two lives probably means this is inevitable. Barriers remain, however. Corporations
are still generally conservative and unless they can see benefits all round, and issues of risk and trust being solved, then widespread adoption is unlikely. Yet venture capital money and invest-
ments from big-name business angels in some of these fintech start-ups means that some clever people think these innovations will, one day, become mainstream.
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