The 2014 Future Payments and Digital Banking conference brought together industry leaders from around Europe to share ideas on how the payments landscape will change in the coming years. The ongoing digital banking revolution means banking and payments are becoming ever more entwined. Billy Bambrough looks back at the most memorable presentations
The two day conference saw banking experts discuss digital evolution, the emergence of mass mobile payment systems, commercially viable applications of biometric authentication, innovative approaches to branding and customer engagement, the role of alternative forms of payment on customer expectations.
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Herco le Fèvre, head of business strategy at ING Netherlands took to the stage to share with attendees the developments that ING have made in putting mobile first.
Le Fèvre told the audience: "ING wants to be where its customers are – at their mobile device because mobile will drastically change the payment and shopping experience.
"But the big question is: Are our customers ready for mobile payments in retail shops?"
To answer this ING carried out a mobile payments soft launch in the Dutch city of Leiden featuring around 180 merchants and 1,000 customers.
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By GlobalDataBetween August and December 2013 ING, ABN-AMRO and Rabobank customers could pay via their mobile for almost all of their purchases.
"Are our customers ready for mobile payments in retail shops?"
The banks found that there was an average of 2,000 transactions per week, with an average weekly total of 20,000 spent on mobile each week.
They found that the average transaction amount was 10.51 per transaction with 92% of payments for amounts less than 25.
The results showed that the vast majority of consumers were keen to use their mobile to pay. 84% of consumers performed more than 25 transactions.
The breakdown of which shops saw the most spending differed from how mobile payments are used in the wider world.
Instead of the majority of purchases being on coffee and fast food, daily shopping in supermarkets, bakeries and drug stores took the lion’s share of transactions at 62%.
Specialist retail such as clothing and books made up 18%, leaving hospitality with just 12%.
According to Le Fèvre by accepting mobile payments and contactless card payments retailers can realize significant reduction of their front-office cost.
Le Fèvre told the audience: "Both consumers and merchant employees are not (yet) familiar with pre-entering the mpin, resulting in slower double tap transactions. When increasing this awareness, the average transaction speed of mobile payments can be further improved."
ING at a glance
- 8,200,000 individual customers
- 700,000 business customers
- 8,600,000 debit card users
- 4,500,000 internet banking users
- 1,600,000 mobile banking users
- 268 full-service branches
- 400 service points
Monica Monaco, founder and managing director of TrustEUAffairs gave the event attendees a breakdown of recent and coming regulation that has influenced the payments industry around Europe.
According to the Monaco the EU Commission (EUC) wish to better understand the mobile payments market, the standards and the security of mobile payments.
In April 2014 the EUC set up an interservice group to work on proximity payments (contactless -NFC) and remote payments (based on debit/credit cards or SMS).
The EUC work shall concentrate on which technologies used; standards and interoperability, and protection of consumers (security).
In February 2014 two draft EU Standards – one on RFID signage and one on PIA – were submitted to the European Committee for Norms (CEN) members for formal vote.
Following this in March the RFID project moves from DG CONNECT to DG JUST in the EU Commission.
On 15 April the consultation with national standard bodies (CEN members) on the two draft EU Standards closes.
Monaco told attendees that the Impact study of EMD2 final report is expected towards the end 2014.
Monaco believed the Impact final report will also be applicable to prepaid cards, introducing lower interchange fees for prepaid debit cards and making cross-border acquiring possible for merchants.
Nationwide, the UK’s largest mutual, has recently bought a new core banking system from SAP and as a result has rapidly risen to the top of digital banking offerings.
Paul Horlock, head of payments at Nationwide, told attendees about how Nationwide is putting customers at the heart of payments.
Horlock said: ""Creating a payments strategy for a financial services company and then implementing it through specific technical solutions, must ultimately have achieving seamless customer experience as its core focus."
To develop a payments strategy Nationwide have looked at new technology, new business models, new regulation, and new competitors.
Nationwides goal, Horlock told the audience, is to offer customers the payment capabilities they want; delivering them on time, every time, securely and commercially.
With changing customer behaviours in payments it is essential for banks to stay in tune with what customers want with Nationwide predicting that debit card spend will overtake cash by spending volume by 2022.
While new competitors are entering the market consumers still trust their bank with their money over others.
Horlock referred to Vocalink research suggesting that people are 49% more likely to use the payments app Zapp when it is provided by their bank, compared to 2% more likely from a well known tech brand and 7% less likely from a teleco.
Of their customers Horlock said: "They do trust their bank, but if they don’t deliver others are coming up fast to take their place!"
FP14 AWARDS WINNERS
- Editor’s Award: Mobile Innovation of the Year
Zapp
- Online Innovation of the Year
Global Payments & Nutmeg
- New Credit Card of the Year
Amex Everyday
- New Debit Card of the Year
Nationwide Flex card
- New Prepaid Product of the Year
Ixaris
- Co-branded, Affinity or Loyalty Product of the Year
Emirates/MBNA
- Innovation of the Year
Citi PayPoint
- Marketing Innovation of the Year
Barclaycard Contactless for London
- Card Processor of the Year
WorldPay (Christine Harding)
- Merchant Acquirer of the Year
Global Payments
- Merger or Acquisition of the Year
Monitise (Hannah Stewart)
- Security Innovation of the Year
Validsoft
