The recent EPC Newsletter post on The Future of Payments highlights some interesting payment trends that key industry influencers believe will emerge over the course of 2015 and beyond. In the newsletter Javier Santamaria, the head of the EPC, summarises the payments related topics from the European Commission’s ‘Conference on emerging challenges in retail finance and consumer policy‘ held in Brussels in November last year. It sounded like an interesting conference where participants were asked to look into their crystal ball and comment on developments in the payments space over the next 5 to 10 years.
The future of payments was one of the topics being debated, the other discussion items were:
- Initiatives that would enable safer and simplified financial products
- How to use behavioural economics to formulate financial services policies
- The mortgage credit agenda
This post will focus on the key themes from the payments stream, specifically on improving user experience and the future of payments:
1. Change will be Evolutionary…
..said the European Central Bank (ECB) Head of Market Integration Division, Wiebe Ruttenberg. Wiebe is pretty conservative in his outlook:
- Calling for reflection and for the debate to not be entirely focused on consumer needs, innovative and alternative payments solutions
- Payments development will build upon existing payment instruments
- Innovation will be enabled by a standardised European infrastructure
- User experience would be enabled by instant payments
2. Mobile Devices are Driving Change….
…was the key message from Luca Cassina, Paypal General Manager – Western Europe. I think we all know this from our own personal experiences, but Luca presented some interesting stats which clearly illustrate the point:
- Mobile Phones Account for 17% of Global Web Usage
- 64% of smartphone owners make mobile purchases because of mobile ads
- 79% of shoppers prefer to receive vouchers on their smartphone – source: Shoppers would rather use smartphones than consult store associates, survey finds
- A smart phone user checks it on average 150 times per day
Unsurprisingly Luca was all about innovation and the pace of technological change. He goes on to say that the innovation in the EU would be facilitated by a future proof, technology neutral regulatory environment.
3. Social Networks & Technology are Changing Behaviours
..according to the EPC Chair, Javier Santamaria. Javier looked ahead at the following developments:
- Physical and virtual worlds will converge
- The personalisation of purchasing and payments
- Payment Service Providers, including bricks and mortar banks, will refocus their business models around payments
- Key players are not European
- A European single market must be a priority – pursuing this objective would require intervention
4. Key Focus Areas:
Mobile Payments – Participants felt that payments via mobile phones would be the future in Europe, but consumer concerns around security and data protection were hindering widespread adoption. While national solutions are being developed, a pan-European mobile payments offering is lacking…
Instant Payments – Again a pan-European instant payments solution is highly desired, but current offerings and proposals are restricted to individual nations
Regulation – a healthy balance of regulation seemed to be the hot topic. Regulatory ‘intervention’ has been highly debated already, what the participants seem to agree on was that regular consultations were required to ensure that regulation didn’t hinder competition and innovation in the EU
The Future of Payments In Europe…
Hindsight is a wonderful thing. The article SEPA – Did we solve a payments problem that no longer exists? illustrates the point perfectly. Andrew Owens highlights emerging technologies that offer global, cheap and almost instant payment systems. Andrew concludes by asking if these technologies were available 15 years ago, would we have had a Single Euro Payments Area? Now that we have SEPA and the emergence of various technologies, some disruptive, I feel we have a perfect opportunity. The question is, will the European Commission embrace these emerging technologies and trends?
Well that’s the European stance on the future of payments, what do you think…?