The informal Tomorrow’s Transactions payments conference, run by Consult Hyperion last week at One America Square in the City of London, featured a presentation from MyBank ahead of its launch and looked at the importance of digital identities in a cashless future, mobile wallets and m-commerce and m-payments. The event didn't forget the social context of payments, however, and the central role of loyalty points, financial inclusion and e-commerce interactions in tomorrow’s transactions.
When is money, not money? If a payment involves a digital transaction over the internet or via a mobile phone is it still as valid, or secure, as getting cash in your hand? Most people would answer, yes, of course it is, but in order to be so the digital identity of the sender and receiver has to be protected and verified. This requirement will only get more important in an increasingly electronic world. This was just one of the many issues debated at the Tomorrow’s Transactions payments conference, run by the Consult Hyperion consultancy on 13-14 March at the One America Square venue in the City of London.
The rebranded conference in London used to be called the Digital Money Forum and in this its 16th staging the small payments and transaction technologies gathering for thought leaders and engineers with ideas, still seeks to outline the future shape of the banking, retail and commercial world. In 2013 it featured presentations from Yandex Money and WEVE on mobile wallets, and Droplet Pay on the first day, who incidentally – and iconoclastically – predicted the death of near field technology (NFC) payments within two years, before it even really takes off.
There were also plenty of presentations from “smartphone-toting hipsters” on the second and final day of the conference, as the chair of the event Dave Birch of the organisers Consult Hyperion, amusingly referred to the entrepreneurs, tech heads and visionaries there to pitch their ideas and listen to experienced financial services and payments veterans, who have ‘been there and done that’. Session chair, Douwe Lycklama of Innopay, and Dominic Hofer of the Loylogic loyalty aggregator and redemption service, were perhaps two of the “hipsters” – admittedly in suits – that Birch was thinking of.
What is great about the conference, whether under its new name of Tomorrow’s Transactions or its old Forum name, is that while it outlines many of the new technology developments in mobile commerce and payments, contactless devices and new regulatory or market drivers in the transactions space, it never forgets that payments and other types of transactions, such as marketing, remittances or purchasing interactions, always have a social context. To be successful retail banking or payments technologies need users and it is important to remember this – and to think about consumer acceptance and uptake – before getting too excited by the latest widget [for those seeking news about the latest launches please refer to Bobsguide’s recent Mobile World Congress show report or the Bobsguide news stream -Ed].
As the conference chair, Dave Birch, noted “the industry sees a missed opportunity when it thinks about last year’s rebuttal of the Payments Council’s aim to eliminate cheques in the UK, but it is understandable that they backed off in the face of public anger and adverse newspaper stories from ‘The Telegraph’ and others about confused pensioners.”
The social context of payments and transaction technology was further emphasised by presentations from Amanda Horton-Mastin, marketing head of the huge UK Comic Relief charity, about how they use pledges and multi-channel multimedia innovations to inspire and accept donations for the ‘Red Nose Day’ telethon, while Stefan Czerniawski, a key player in the design of the new Universal Credit benefit payment in the UK, which the Department of Work and Pensions (DWP) is introducing to do away with the morass of complex competing benefits currently on offer.
Helen Doyle from the policy and research team at the UK Payments Council, which represents the nation’s banks, payment providers and users, was also there to join a panel looking at financial inclusion. Despite the new technology on display and under discussion at the event, therefore, one of the key ‘take aways’ was to focus on “[consumer] behaviour, behaviour, behaviour”, as she said.
Banking Must ‘Stay in the Game’: MyBank
The fear of many retail banks of course is that they could be disintermediated by non-bank competitors, mobile network operators (MNOs), card schemes like Visa Europe (one of the sponsors of Tomorrow’s Transactions), and tech firms like Google with its wallet, or other new entrants. One of the numerous industry responses to this potential threat was discussed at the show by John Broxis, a director with EBA Clearing, which is launching the MyBank initiative on 25 March.
The MyBank cross-border electronic e-payment and authorisation solution from 64 European banks and counting, will allow European consumers to pay for shopping via the internet or mobile channels without sharing account details, as it provides a protected link to the consumer’s own online bank account. It is effectively a portal linking customers directly to their own online bank, and EBA Clearing hopes its MyBank logo will be placed on websites alongside Visa, MasterCard or PayPal payment options, for instance, so that banks remain part of the valuable, front-end financial services ecosystem. “We want to bring banks bank into this space,” explained Broxis, adding that it is a real-time authorisation solution, not a real-time payment platform, so participating merchants might actually get the payment itself tomorrow.
“No loading of money to wallets is necessary [as its direct from an existing bank account], no extra regulation is needed and the merchant is not given any data, enhancing security,” claimed Broxis when listing the benefits of MyBank, which also include no interchange fees and ready compliance with the single euro payments area (SEPA) formats that are coming into force on the 1 February 2014 migration date.
In essence, therefore, MyBank is basically a pan-European version of the long-established iDEAL bank-led payments platform in the Netherlands, but with cross-border capabilities. Identity solutions should be possible on the platform in future as well. “[the solution] can put banks back in the heart of electronic e-payments,” concluded Broxis. “Banks see a lot of intermediaries between their customer and the merchant, and obviously want to keep them in the banking ecosystem.” Staying in the game means banks can then cross-sell and keep some of the value-add services that use the old payment rails for themselves in the brave new world of tomorrow’s transactions.