Mobile Wallet
Leapfrogging international payments innovation By Laurent le Moal
W
hile established cities including New York and London continue to battle it out to be crowned the hub of FinTech innovation, if the last five years have taught us anything, it is that increasing levels of payments innovation are now occurring in all corners of the globe. Worldwide innovation trends are largely focused around increased collaboration and integrated payments as both meet the relentless universal consumer demand for convenience. However, while mature established markets like the U.S. can get tangled in its legacy infrastructure, a new wave of payments innovation is taking place— with emerging, high growth markets becoming the ones to watch. In short, propelled by increasing consumer demand, favourable regulation and unburdened by legacy infrastructure, countries in high growth markets are starting to come to the fore when it comes to large scale payments innovation and adoption.
Asia leads innovation A recent report released by the Global Payments Innovation Jury confirmed, by a substantial margin, Asia as the home to the most payments innovation over the next two years. The report cited widespread opportunities in the region due to the rapid population growth, high willingness to accept new technology and the sheer size of the market opportunity to convert from cash to digital payments in economies where the reach of traditional banks is limited. Indeed, a great example of this leapfrogging payments innovation trend can be found in India. As the country’s leading payments services provider, we are seeing first-hand that India is fast becoming a hub of payments innovation and disruption at scale. India is home to several of the elements necessary to encourage new technology to flourish, as highlighted in the Global Payments Innovation Report. Key among these components are the increasing consumer demand for digital payments, a supportive regulatory environment and a highly skilled tech market.
Consumer demand
electronic payments have been a mainstay for the best part of 30 years is the very reason that innovation can be stifled. With legacy infrastructure and entrenched customer behaviour new and innovative payment technologies don’t have an easy path to adoption. In contrast, India’s extreme smartphone adoption is fuelling the rapid uptake of digital payments. With 220 million users, India is now the second largest smartphone market in the world. Given that India has a population of over 1.25 billion, its appetite for mobile products and services is set to continue to boom.
Interoperability and open platforms are critical to help break down barriers when considering how to best support multiple payment types. Access to credit With this rise in smartphones in high growth markets comes the corresponding rise in data availability. As the amount of data increases new techniques are being used to build credit intelligence from data. As businesses become more comfortable and able to use a variety of methods to build data profiles for consumers, more and more people can access credit. In turn, options that enable customers to pay later, pay in installments or only use credit when needed provide the opportunity for more people to access the payment services they need in a way that suits them best. Not only this, but the credit offerings themselves are also changing to reflect the people and lifestyles unique to certain markets. Adjustable credit cycles combined with regulatory changes and better data security are helping payments businesses—and the merchants they service—mitigate the credit risks commonly associated with high growth markets.
As previously touched upon, in mature markets the fact that traditional 4
PAYMENTSBUSINESS
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