Fintech March 24, 2022

Five key takeaways from PAY360 (and yes, one is KFC)

By: David Reiss

With over 1500 thought leaders and senior executives from banks, merchants, Fintechs, card providers and solutions providers, PAY360 was always going to be a rich source of the latest trends in payments.

Currencycloud was delighted to be silver sponsors of this event, our first in-person conference of 2022, and when we weren’t busily working our way through the Currencycloud barista’s coffee menu (voted best on the conference in an informal poll btw) we attended a whole raft of insightful sessions where we heard about all facets of the future of payments – from security to the fate of cash – and what this means for providers, merchants and most of all, the customer.

If you weren’t lucky enough to attend PAY360 in London, here are five payment trends we found most interesting.

CONSUMERS ARE THE WINNERS

It was a great day for the consumer. All sessions agreed that every payment provider is working towards giving customers simpler, faster payments and to offer them solutions to their pain points quicker than ever.

Customers and consumers were a recurring theme in every PAY360 session we attended. Paying attention to what consumers are demanding will be key to the success of every payment provider: from QR codes with safety and reliability built in, to offering consumer-friendly features that remove the hassle of having to remember your payment details. The move to hyper-personalization and giving consumers choice of how to pay is, all agreed, unstoppable.

The need to offer consumers more protection than ever before was a hot topic too, with a healthy suspicion of tech for tech’s sake if it wasn’t in the best interest of the consumer and their security. Speakers in all sessions agreed that it will be consumers who will drive what innovations stick and what fall by the wayside. Consumers and merchants will choose what gives them security, convenience and is most appropriate for them at any given time. They are both the drivers of change and the beneficiaries of it.

BIOMETRICS WILL BE HUGE

A panel discussion on disruptive tech highlighted that the future really is in our hands (and faces). Biometrics is going to be huge when it comes to offering security and ease when making payments. Cards will disappear, and a person will become the payment mechanism. A China-based KFC fast food restaurant was cited as a great example of this in action by one speaker who saw it firsthand. Customers ordered their food via a screen with facial recognition technology. This matches an ID already in the wider system. All the customer had to do was input their phone number, and the payment was made. There was no physical card or virtual card: the information needed to trigger the payment was embedded in the face. It’s easy to see why this is happening in China where a face is a passport to many everyday transactions. Even so, with the shift towards biometrics, the whole of payments and authentication will inevitably become invisible.

SECURITY FIRST,  ALWAYS

Every speaker in the sessions we attended agreed: the customer needs protecting more than ever. As more and more payments are cashless, the threat of fraud increases with each digital transaction, each additional security layer. These attacks can be scaled quickly and easily. It’s up to providers to ensure there is a balance struck between security and user-friendliness during payments. People are leaving transactions because they are asked to leave their payment app to verify who they are. Anything like facial recognition or fingerprint recognition helps this process.

It was noted that open banking-enabled tech Variable Recurring Payments (VRP) which allow customers to securely connect authorized payments service providers to their bank account are potentially transformative when it comes to offering additional security during the payments process for small businesses and consumers alike – and that in the next few years, VRP will build rapidly. One speaker cautioned that even though PSD2 is really here and adding new rigor to the payment authorization process, fraudsters haven’t given up their day job… they are moving earlier in the cycle. A chilling reality check was the observation that there will be 1000 times more skill and brain power working around Know Your Customer (KYC) in Russia in the wake of freezing accounts after the country’s invasion of Ukraine than we saw after the sanctions imposed on countries in the wake of 9/11. Because of this customers will need to be closely protected all the way along the financial transaction journey.

CASH IS DEAD, LONG LIVE CASH

We were reminded that in 2020 only one in six transactions in the UK was cash. In 2022 MPesa processes more than 61m cashless transactions a day, and digital tech researcher Juniper predicts that by the end of 2022 36 million people will be using digital wallets. We are, agreed most sessions we attended, transitioning to a cashless society. The move to cashless is breaking the cycle of poverty felt by the world’s unbanked. And yet, representatives from major banks were keen to stress that globally, cash is declining but not dead, and cards aren’t going anywhere. Different ways of making payments are currently happily coexisting, putting the choice of how to pay into the hands of consumers.

CRYSTAL BALL NUGGETS

1. Open banking will be a key to offering more streamlined customer solutions, where consumers can stay on one platform, knowing that there is inherent security to every transaction

2. It will be imperative for businesses to be cloud-native to stay relevant

3. Just like Uber where the finance is integrated into the transaction, people will see embedded finance more and more when buying a house or car. Customers will have the ability to port their financial data around however they want, and this will be easier and more common

4. The jury is still out about crypto with some speakers citing its inherent insecurity and lack of regulation as a possible chink in its armor going forward

5. The customer will drive and influence change

By: David Reiss
David has been an ever-present figure at Currencycloud since the early days and has held a number of roles during his time at the company, including Head of Client Support and Head of Solutions. His depth of knowledge of the Fintech industry and the nuances of cross-border payments would have you finding it hard to...

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