The Bankwatch

Tracking the consumer evolution of financial services

Payments – whats going on?

The world of payments is going crazy. Payments is supposed to be about SWIFT and land in SIBOS annually. Darn. The usual suspects at SIBOS Boston in October past must be suffering from brain exploding thoughts about Singapore next year.

But seriously payments ain’t what they used to be. Apple Pay certainly drove payments front and centre, but Stripe have been quietly making significant moves the in the background.

Here are just three stories tonight from the interwebs. Payments have been a story for a while but finally they are showing as consequential change, and banks are not in the story.

Infosys, a leader in consulting, technology, outsourcing and next generation services, announced today that it has successfully implemented its Finacle™ core banking solution for Discover Financial Services DFS, +0.06% a leading U.S. direct bank and payment services company.

“When we first did it, a lot of people hadn’t even heard of Alipay,” Collison said Sunday at the Techonomy conference in Half Moon Bay, Calif. Alipay, an Alibaba affiliate, is the largest payments company in China and processes millions of transactions a day.

Worldpay Announces Agreement to Acquire SecureNet Payment Systems – “SecureNet is a market leader in multi-channel commerce technology and has pioneered the payment industry’s only cloud-based solution that seamlessly integrates point-of-sale, mobile and eCommerce payments processing, inventory management and data analytics for merchants.”

So what is happening here? Its a mixture of two shifts in my view:

1. Stripe etc: a quiet background effort from startups with Stripe leading that basically understands and undermines the hold traditional banks have on payments, and

2. Apple: the installed base of Apple gizmos that can suddenly pay for things is unprecedented. There are 6% of apple devices on old software We don’t know how many are upgraded to ‘6’ but its a safe bet that Apple have a base that is unprecedented in terms of earlier platform adoptions.

Shift 1. has been gradual, ok superfast in bank lingo, over last 5 years, then Apple showed up this year and cemented that shift.

Relevance to Bankwatch:

Despite the circle of craziness surrounding payments right now whats interesting is that the direction isn’t at all clear.

– will payments always centre on credit cards?
– where does debit figure?
– what about direct access to bank accounts without traditional debit and credit? and
– why do we have to think about credit and debit? why can’t customers have direct access to their products without having to think about it?

Payment strategy is on a rapid transition path that will mean 2015/6 presents very different challenges for banks.

As always, thoughts and questions welcome.

Written by Colin Henderson

November 12, 2014 at 00:19

Posted in Uncategorized

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