IBS Journal October 2017


35


Payments are like onions


Komitzer believes that the wide range of available payment methods and channels is nothing but a good thing. “Payment innovation is all about adding value to transactions for both the merchant and the consumer – and most of the times this value comes in the form of convenience. However, security and cost- effectiveness are also priorities in the pipeline, even though they may clash with convenience at times. Here in Canada, the last thing I want to do is take my gloves off to take money out when it’s minus 30 degrees. I’m more likely to gravitate towards a provider if it keeps my hands warm.”


“I like to think about payment services like an onion. The core would be sending money across – anybody can do that. However, each payment company must have layers of services such as mobile analytics and security, and these are the ones that attract the consumer to pick a provider,” he adds.


According to Vaghjiani, one of these layers that is overtaking any other when it comes to innovation. It is the one centred around data, and companies able to leverage real-time data and use it in each transaction will see that a new range of utilities opens up for them. He points at GPS and how London’s neo banks have set new standards when keeping track of transactions, spending, direct debits, and so on.


The likes of Curve, Monzo and Revolut have all been relying on GPS’s service to process payments. GPS uses its External Host Interface (EHI) which, as Vaghjiani explains, has allowed them to create a real-time data feed of payments info on the user’s app, from amount, to location of till, etc. Curve is a prime example of how, by rooting each transaction to the acquirer, the fintech allows users to use one card to pay from any of their debit or credit cards, pre-selecting them in real time from their phone app.


The importance of real- time data tracking stems from a modern mentality in which consumers demand instant gratification while having less time to spend in bureaucratic processes. Vaghjiani points towards the new wave of KYC innovations that simplify KYC user authentication bureaucracies through the use of selfies, a “blink test”, uploading passports to the


Suresh Vaghjiani: The transaction should be seamless


companies’ systems, or even filming a video of yourself. The onion is just getting fancier.


Wearables have been pushing the limits of payment tech


Not only is data important to give consumers the ability to track and manage their spending, but also to provide that personalisation that we mentioned above. The prime example of this – no pun intended – is Amazon, and the way it keeps outdoing its current offering. Amazon has embraced the mobile revolution, and ultimately enhanced the user experience. It has done the same with data. As Komitzer puts it: “it has kept up with data tracking to the point where it has become the master of upselling. Just look at the recommendations at the bottom of your Amazon page. The way they do it is convenient, seamless – while extracting as much value from it as possible – and the customer doesn’t even realise.”


The new craze


Fintechs aim to replicate what Amazon has done with data tracking but in banking. This way, fintechs would be able to offer better service providers to save money according to consumer data. Komitzer is very clear about this – those companies neglecting data analytics will fall behind the ones that do. Just look at PayPal and its opponents Visa and MasterCard. PayPal’s growth can largely be attributed by how it is able to gather and interpret consumer data.


The expectations for a seamless environment are growing, but it will take a few years for it to become a reality. Being able to purchase goods online as you see them in-store, and let your phone pay automatically as you walk out of the store, or perhaps


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Highwaystarz Photography/iStock


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