Emerging Payments Technologies By Bala Murali Krishna
I
t is not hard to understand why FinTech is among the hottest areas of startup activity. Or why payments platforms, in particular, are the hottest area of innovation in finance. At the heart of this new zeal is a clutch of emerging technologies such as Internet of Things, artificial intelligence (AI) and blockchain, and a string of slightly more mature technologies such as cloud computing, Big Data, Bluetooth, near-field communications (NFC) and biometrics. Exciting new startups are racing to mix and match these technologies to create new payments platforms, notably on mobile devices, in what looks like the biggest wave of financial disruption since PayPal emerged in the late 1990s. Incentives to do so have never been higher. The non-cash payments market was worth $1 trillion in 2015 and is estimated by the Boston Consulting
Group (BCG) to double to $2 trillion in 2025. Big as the number is, there might be even more in the pot at the end of this rainbow. That is because the global payments industry will still represent less than a third of the traditional banking market. It is no surprise then that the biggest technology giants – Apple, Google and Samsung – are in the fray to mint money, some literally so. So are financial giants such as Barclays, JP Morgan Chase and Bank of America, and emerging ones such as Santander. Incumbent credit card giants Visa, MasterCard and American Express – who probably have the most at stake – are also right at the forefront, partnering with several startups to tap new technologies. Here’s a quick look at some of the interesting payments technologies emerging across the world:
Amazon Go: Cocktail of Technologies This concept store – no checkout, no lines and no attendants – might be the holy grail of payments processing, as much as that of retail. Amazon’s prototype, unveiled in late 2016, is an 1,800-square-foot store in Seattle. It is open only to the ecommerce company’s employees as Amazon tests a variety of features. The store incorporates a wide range of wireless technologies and sensors, allowing shoppers to pick up anything they want and simply walk out the door. Billing, among other things, happens automatically. Predictably perhaps, word out of Amazon is that the store is far from ready for a commercial rollout anytime soon. But it could be coming to a future near you.
Internet of Payments Visa, Honda and Samsung are among companies experimenting with Internet of Things in payments, or the socalled Internet of Payments (IoP). At this year’s Consumer Electronics Show (CES) in Las Vegas, the Japanese carmaker and the credit card company demonstrated a system for in-car payments using IoT devices. With a dashboard device, users can pay for fuel and parking, among other things. Visa is working on similar payments processing on wristwatches and other devices.
europeanbusinessmagazine.com 17