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IBS SALES LEAGUE TABLE 2017 FEATURE NAME
Payment technology systems: on the cusp of transformation
The payments industry has been in a state of flux for some time now, and with the rapid digitisation of data and development of emerging technologies, there’s a bevvy of technology innovations and reforms on their way
Lead Analyst, IBS Intelligence Vipin Vishwanathan
T
he catalyst for the changes within the financial services industry is evolving customer expectations with both individuals and corporates expecting speed and ease of use when carrying out day-to- day transactions. The growing ecosystem of fintech solution providers including mobile wallet providers such as Apple Pay and Android Pay, and person-to- person payment solutions such as Square Cash, Paytm and AliPay, offer these advantages when making payments. For corporate payments, governments and leading banks have been looking at simplifying cross-border payments in a bid to make the transactions instantaneous.
In this respect, the year 2016 was a notable one for the payments technology industry, with many key developments recorded during the year. Most developments centred around three major areas – mobile payments, real-time payment infrastructure and digital currency initiatives.
Banks go mobile
While the year continued to witness growth in mobile-based transactions, of note were the initiatives by leading banks and retailers to participate actively in the mobile payments space. Leading global banks such as Citibank and Chase launched their mobile wallets – Citi Pay and ChasePay, respectively. Similarly, in Asia, Maybank launched its wallet while almost all leading banks in India announced their digital wallet. In another initiative, big banks including JPMorgan Chase & Co, Bank of America Corp,
In India, the government’s de-monetisation drive pushed for a digital economy
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Payments Industry Total Revenue Forecast
Wells Fargo & Co and U.S. Bancorp, collaborated to launch their own jointly-owned system called ClearXchange, which will allow each participating banks’ customers to transfer money to the other instantaneously. Banks in Europe also made similar moves, with the UK institutions launching an app called Paym, which allows individuals to transfer up to £250 ($355) to another user’s bank account.
Real-time transfers a reality
The other key development during the year were initiatives by governments across most geographies that actively pushed for a cashless economy and modernised countrywide payments infrastructure. In India, for example, the government carried out a de-monetisation drive to push for a digital economy. The outcome is a market that is now a hotbed for mobile wallets and p2p payment solution providers. The country also launched the Unified Payment Interface (UPI), which allows real-time money transfer across bank accounts using a mobile interface. Similar initiatives were seen in the West, with the US going live with its Faster Payments initiative, which allows same-day ACH. Europe
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