November / December 2018
COVER STORY THE DEATH OF CARDS?
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PaymentsCARDS & MOBILE November / December 2018 Volume 10, Issue 6
I have a conundrum. Is it possible to get through Production Team this issue without mentioning Money 2020? Alexander Rolfe Editor-in-chief and publisher Tel (+44) 1263 711 800 Damn it! So easily fooled. Oh well, it would have been remiss not to mention the [email protected] Greatest Show on Earth especially as many of the PCM team dedicated themselves to the trip to Vegas and during the time they were there squeezed in 28 meetings – I think James Wood Editor this is some kind of record…or perhaps justification for the expenses. [email protected]
As with all our issues, we try to offer some analysis and insight into topics that Wendy Sanders Head of Business Development deserve more column inches. Alternatively we try to tackle a new subject that is Tel (+44) 1263 711 801 perhaps under-represented in some form or another. November/December is no [email protected] different. First, we had the on-going War on Cash. Now, everyone wants to predict Gemma Rolfe the death of cards. In this article, we see that the major card networks still dominate General Manager the modern payments landscape and have been a driver of global commerce over Tel (+44) 1263 711 800 the last fifty years. Recent statistics confirm this dominance – but there is a growing [email protected] trend towards the disintermediation of both the payment networks and traditional Gemma Haywood banks. Our cover story looks at recent developments and whether they represent the Subscriptions and General beginning of the end for the plastic card. Tel (+44) 1263 711 800 [email protected]
AI is taking centre stage on a global level and every forward-thinking government Adam Unsworth is keeping a very wary eye on the technology, not only with a view on how it can be Graphic Design Tel (+44) 7932905744 harnessed but also to make sure that concerns on an electoral level are allayed. The [email protected] payments industry has a keen view on the abilities of AI — but is it really as useful as some people claim, or are we in the middle of a hype cycle? Printing Micropress Printers
Finally, and perhaps happily so for the Millennials, the new marketing focus is zoomed right in on Gen Z. But who are these phantom beasts and what do they want? They Editorial Advisory Board have never known a world without mobile phones and tablet computers, have their own unique expectations, and a different attitude to any generation before them, but John Berns what does Generation "Z" mean for the payments business? Managing Partner, Accourt
Sylvie Boucheron-Saunier SVP Financial Institutions, North America & Europe, ACI
Robert Courtneidge CEO, Moorwand
Alexander Rolfe, June Felix President – Europe, Verifone
Denise Gee AlexRolfe Director, Magna Carta Simon Hardie Editor-in-chief and publisher, Director, Magna Carta Payments Cards & Mobile
All rights reserved. No part of the publication may be reproduced or transmitted in any form without the publisher’s prior consent. While every care is taken to provide accurate information, the publisher cannot accept liability for errors or omissions, no matter how caused. Payments Cards and Mobile The Stable, Hall Yard, Kelling © PaymentsCM LLP 2018 Holt, NR25 7EW, United Kingdom Payment Cards and Mobile™ is owned and published by PaymentsCM LLP ISSN 1759-829X +44 1263 711800 / paymentscm.com contents
06 - 07 PAYMENTS NEWS EXPERTS PREDICT BLOCKCHAIN 26-27 MOBILE PAYMENTS PAYMENTS BY 2025
NEWS IN BRIEF Speaking at the recent Money2020 UPI LEADS VIBRANT INDIAN MOBILE WALLET All the latest news from the past 60 days. conference in Las Vegas, a number of industry RANKINGS experts predicted that public concern over Unified Payments Interface (UPI), a system 08 - 13 CARD NOTES recent data security breaches would which allows for instant bank-to-bank fund lead to the creation of a comprehensive transfers is gradually taking the lead over the EMERGING MARKETS STELLAR GROWTH IN blockchain-based payments network by 2025. vibrant mobile wallet market in India. NON-CASH PAYMENTS The World Payments Report 2018 from 24 - 25 ISSUING & ACQUIRING YOYO STRIKES $30 MILLION PARTNERSHIP Capgemini and BNP Paribas predicts noncash AGREEMENT FROM HARD YAKA transactions will accelerate over the next CONTACTLESS CARDS ACCOUNT FOR 50 Yoyo Wallet has secured $30 million in a five years. PERCENT OF ALL CARDS partnership agreement from Twitter and Contactless payment card issuance is set Coinbase investor Hard Yaka. PAYMENTS INDUSTRY SET TO BE WORTH to hit 1.5 billion units in 2018. $110 TRILLION ALTERNATIVE PAYMENTS ESSENTIAL AT New research from sharespost.com SWEDEN’S CENTRAL BANK PREPARES TO POS IN ASIA PACIFIC describes the global payments industry as LAUNCH DIGITAL E-KRONA Consumer desire for convenience is reshaping a business opportunity worth $110 trillion. Sweden’s central bank is preparing to launch a the retail sector, where retailers are scrambling cryptocurrency, according to reports. to offer a seamless shopping experience. BANKS MUST CHANGE OR MISS OUT, ACCENTURE WARNS UNIONPAY STAYS ON TOP AS THE WORLD’S ASIA OUTPACES WEST IN TERMS OF MOBILE Accenture has warned traditional banks that LARGEST SCHEME WALLET ADOPTION new entrants have arrived as significant New research reveals that the number of Mobile wallet adoption in Asian markets like players in banking, and that the industry is payment cards in circulation worldwide China, India and Taiwan is much higher than now seeing revenues shift towards these reached 15 billion at the end of 2017. their Western counterparts such as the US, the new players. UK and Germany. MASTERCARD, AMEX AND WORLDPAY JOIN FIS REPORT TRACKS GLOBAL TREND TO INAUGURAL CYBER WAR GAME 29 CONTACTLESS FASTER PAYMENTS Mastercard, WorldPay and AmEx were among The 2018 edition of FIS’s annual Flavour of the payment processors who took part in a THE CASHLESS SOCIETY – MAINTAINING Fast report has revealed a world in full ‘cyber war game’, in a bid to test their systems TRUST IN PAYMENTS migration towards faster payments. amid rising IT security threats. Lack of trust in the payment system remains a fundamental obstacle to a cashless society.
COVER STORY P14-16 THE DEATH OF CARDS?
4 payments cards & mobile magazine - november / december 2018 www.paymentscm.com contents
31 E-COMMERCE DEUTSCHE BANK DIGITAL CHEQUE OPEN BANKING EXPO PROCESSING PLATFORM 27 November, London www.openbankingexpo.com RETAILERS SET TO LAUNCH VOICE Deutsche Bank is to migrate its cheque COMMERCE - ARE WE READY? processing operations to a digital, cloud-based TRUSTECH platform run by India's HCL technologies. Argos has become the first retailer in the UK to 27-29 November, Cannes offer a voice commerce and search shopping www.trustech-event.com service via the Google Assistant platform. 33 CONTRACTS BRANCH TRANSFORMATION PAYMENT TECH BRANDS CONNECT WITH UK INGENICO AND NATIXIS EYE STRATEGIC 27-28 November, London CONSUMERS MERGER www.rbrlondon.com/conferences/bt/ Half of the most significant brands in the UK The French bank Natixis is reported to be are associated with payment technologies, reviewing a potential deal with Ingenico as GSMA MOBILE 360 LATIN AMERICA 4-6 December, Buenos Aires according to an index recently launched by the companies look to expand in the rapidly www.mobile360series.com/latin-america/ Opinium Research. consolidating payments sector.
FDATA 2ND ANNUAL GLOBAL NCR STEPS INTO PAYMENTS WITH JETPAY 32 PRODUCTS Open Banking Summit ACQUISITION 6-7 December, Edinburgh NCR announced a definitive agreement to BIOMETRIC CARDS FOR LIMITLESS Fdata.global/summit/ CONTACTLESS PAYMENTS. acquire US based JetPay, a provider of end-to- Societe Generale is trialling a card end payment processing. PARIS FINTECH FORUM with a built-in fingerprint reader that enables 29-30 January, Paris users to make contactless payments of TRUSTLY PARTNERS WITH LARGEST www.fintechforum.com unlimited value. EUROPEAN P2P MARKETPLACE MINTOS Trustly has partnered with Mintos, a global MERCHANT PAYMENTS ECOSYSTEM 19-21 February, Berlin “DATA BLEACH” TECH PROTECTS online marketplace for loans which provides merchantpaymentsecosystem.com CUSTOMER PAYMENTS retail investors with a way to invest in loans from around the world. Elavon announced its Secured Point-to- MEFTECH 2019 Point Encryption (P2PE) solution has been 38 CONFERENCES 25-26 February, Riyadh successfully validated by the Payment Card www.meftechksa.com Industry (PCI) Security Standards Council. MONEYLIVE SUMMIT 2018 MONEYLIVE SPRING 2019 26-27 November, London HITACHI AND SBI LAUNCH NEW INDIAN 11-13 March, Madrid www.marketforce.eu.com/money-live/ PAYMENTS PLATFORM new.marketforce.eu.com/money-live/ event/summit/ State Bank of India, with more than 420 events/spring million customers and 600,000 POS terminals GSMA MOBILE 360 MENA is the largest merchant acquirer in the Indian 26-27 November, Dubai market in terms of terminals has linked a JV www.mobile360series.com/MENA/ with Hitachi for a new payments platform.
FEATURE P22-23 FEATURE P18-20 THIS DIGITAL LIFE: PAYMENTS AI’S ON THE PRIZE AND GENERATION “Z”
www.paymentscm.com payments cards & mobile magazine - november / december 2018 5 news in brief global payments news from the last 60 days
DIEBOLD NIXDORF has partnered with leading have been used by the fintech to originate FINASTRA WILL launch its Fusion Global technology providers, including Google and nearly $5 billion in loans to more than 600,000 PAYplus solution for tier three and four Mastercard, to create Vynamic Engage and people. The platform has been customised to financial institutions (FIs) in the EU and US Vynamic Demand, two software products HSBC's specifications, including the bank's from Q2 2019. This product allows smaller FIs aimed at accelerating convergence between proprietary risk models. Customers will be to access the benefits of the cloud without the digital payments, online customer behaviour able to complete the application process cost and infrastructure requirements which and retail advertising. Retailers increasingly online and, if approved, get the funds - up to have previously barred their entry. Based acknowledge that the consumer journey now $30,000 with terms of up to five years - the on Microsoft Azure, Finastra’s offering will starts at home or remotely on mobile, with next day. Pablo Sanchez, regional head, retail enable central updates, ensuring all users pre-purchase advertising needing to keep banking and wealth management, US and benefit from the latest changes or new product pace with content consumers review on a daily Canada, HSBC, says: "By adding personal functionalities immediately, including SWIFT basis. Diebold Nixdorf’s new products enable loans to our expanding product suite, we’re and clearing scheme updates. Banks will be retailers to combine customer browsing and meeting the needs of today’s consumers able to get up and running in just a few months shopping information to offer highly-targeted who want a safe, fast and easy way to borrow with standardized pricing and onboarding promotions and incentives linked directly to money online." processes. Sagive Greenspan, SVP, General consumer’s interests, shopping habits and Manager, Payments at Finastra, said: “We will geo-location data. enable small and mid-sized banks to compete in the cloud environment with this hosted payments solution.”
AEVI ANNOUNCED its new product, AppFlow, at the recent Money2020 conference in Las AMERICAN EXPRESS will be working with Visa Vegas. Merchants are looking for applications and Mastercard to advance the EMV Secure that transform the consumer checkout Remote Commerce (SRC) specification, experience, but often find these apps are not EVERCOMPLIANT HAS launched eKYC which allows card payments to be made in interoperable, resulting in costly and intensive Discovery, a tool that addresses potential gaps a consistent way across websites, mobile integration efforts. AppFlow aims to remove in Know Your Customer (KYC) processes that apps and other digital platforms. With SRC, this pain by standardising and automating could leave financial institutions exposed to merchants will be able to offer a common the integration and interoperability of apps criminal activity. EverCompliant claims to have checkout process on their websites in the in an open environment. The company says used its AI-powered technology to identify form of a payment button that would deliver its AppFlow software development kit more than one million sites that appear to be a familiar experience to the consumer and the will “deliver on the promise of SmartPOS engaged in improper and potentially illegal merchant. This button eliminates the need systems to offer choice, flexibility and activity with its AI technology. EverCompliant for consumers to repeatedly type in their card strategic value to merchants.” Developers says its eKYC Discovery product allows data and billing information when checking and acquirers will be able to provide a better financial institutions and government officials out on a website or mobile app, and unifies the experience for merchants and consumers by to “gain deeper insight into a corporate way card data is securely stored and handled. delivering apps and services that work with customer’s complete profile by analysing the other apps available on AEVI’s marketplace Internet for hidden connections to sanctioned and on AEVI-enabled third-party devices, countries, illegal businesses and risky ensuring developers do not have to rework business associations.” their integrations.
HSBC'S US arm is rolling out technology from Avant to move into the online personal lending market. HSBC is tapping Avant's Amount technology and digital capabilities, which
6 payments cards & mobile magazine - november / december 2018 www.paymentscm.com news in brief
FINN AI, the provider of smart “ChatBot” E-COMMERCE AND payments-focused digital services for banking, has closed a second currency Dash has integrated Uphold, a digital funding round for US$11 million and money platform, into its digital wallet. This will announced the hire of financial services enable Dash Wallet users to buy and sell Dash veteran Linda Wittich as Managing from the Dash Wallet itself, meaning users will Director, Global Sales & Strategic Account not have to use another app or cryptocurrency Tough decisions for Acquirers Management. The new funding will allow exchange for these transactions. This allows and PSPs in 2019. Finn AI to extend its core product to users to buy and sell Dash easily through the support additional banking and personal push of a few buttons. The Uphold feature is In 2018/2019 both merchants and payment providers face pressing, finance capabilities for existing customers currently available on Android wallets, and will strategic questions related to the including ATB Financial, Bank of Montreal, soon be available on iPhone. Ryan Taylor, CEO selection of payment methods they Commonwealth Bank, and Fidor Bank. The of Dash Core Group, commented: “Our goal of support that need to be answered. round was led by Yaletown Partners and Flying achieving widespread adoption can only be European regulatory initiatives like Fish Partners, and joined by new investors made possible by making the user experience PSD2 promoting instant payments, open banking, and data sharing have BDC Capital’s Women in Technology Fund as easy and intuitive as possible. With this created a new payment ecosystem. (WIT), and New York-based 1843 Capital, an wallet integration, users can acquire and use Acquirers and PSPs and card schemes, early stage technology venture firm. Lending Dash more easily than before.” threatened by the risk to be bypassed facilities were provided by Comerica Bank. by Third Party Providers, are looking now at the new business models and the roles they can play in this new ecosystem. However, the key questions remain, whether to continue playing in the traditional card acquiring space or to take full advantage of PSD2 by opting for PISP/AISP licensing? What can be done in-house, what in collaborating with partners for those opportunities that lie outside the expertise? BRITISH AIRWAYS has warned that another GEOSWIFT AND PAYEASE have jointly created 185,000 customers may have had their Other questions relate to the future a cross-border payment solution for China payment card details stolen in a data breach. direction of European Card Acquiring. which enables overseas merchants to settle The airline says that customers who made In 2018, cards continue to grow their funds more rapidly. The integrated solution reward bookings with payment cards between share of the European payments market carries out domestic collection in Renminbi April 21 and July 28 are at risk. It is contacting but the increasing scheme fees are (RMB). It also settles cross-border and the holders of 77,000 payment cards to warn eroding the benefits of interchange overseas mass payment in multiple major that their names, billing addresses, email regulation. British Retail Consortium warned in 2018 that scheme fees currencies across the world's top financial addresses, and card payment information, increased 39% in 2017. Various consumer centers. "Joining hands with Geoswift will including card number, expiry date and CVV, groups ask the European regulators to help us deepen and widen the reach of our have potentially been compromised. A further step in to protect merchants from hidden product offerings, leveraging their strong 108,000 have had the same information fee increases. The UK Payment Systems global banking relationships, comprehensive compromised minus the CVV. BA only Regulator (PSR) announced in July 2018 a market review into card-acquiring end-to-end compliance approach and discovered the breach while investigating a services, including a public consultation robust technology infrastructure across similar hack that was carried out later but whether there is effective competition the world. This joint solution will enable uncovered in early September. That attack and supply of card-acquiring services. us to better serve our clients to meet their was initially thought to have involved the card What’s next for Card Acquiring, Scheme growing needs for cross-border and overseas details of 380,000 customers, although BA fees and Interchange Fee Regulation in Europe in 2019? settlement," said Frank Zhou, CEO of PayEase. has now revised this down to 244,000. The Future of card acquiring, fees evolution, company says that it has had no verified cases new merchant payments options, Open of fraud related to these incidents. API technology are among the key topics to be discussed at the MPE 2019, Europe’s Largest Merchant Payment Acceptance Conference in Berlin, February 19-21.
Request the Agenda & register at merchantpaymentsecosystem.com
www.paymentscm.com payments cards & mobile magazine - november / december 2018 7 card notes GLOBAL
EMERGING MARKETS STELLAR GROWTH IN NON-CASH PAYMENTS
The World Payments Report 2018 from Specifically, the US is predicted to lose successful strategies adopted in recent years Capgemini and BNP Paribas predicts non- leadership in non-cash transaction volumes that have led to demonstrable step-changes in cash transactions will accelerate over the next to China by 2021. the adoption of non-cash payments, including five years to reach a compound annual growth Looking ahead, the report predicts rapid Australia’s New Payments Platform (NPP), rate (CAGR) of 12.7 percent globally, with the growth in e-wallet transaction volumes. In which is driving non-cash transaction growth world’s emerging markets growing at 21.6 2016, e-wallet transactions accounted by enabling real-time payments with added- percent over the same period. for almost 8.6 percent of all non-cash value features. Likewise, Singapore has Emerging markets, which currently transactions, or 41.8 billion transactions established a Payments Council, developed a account for about one-third of global non- world-wide. According to Capgemini and BNP common QR code for payments, standardised cash transaction volumes, are expected to Paribas, significant opportunities lie ahead for POS terminals and mandated cashless contribute nearly half of global non-cash “Big Tech” (Google, Amazon, Facebook, Apple, payment for public transport, while Japan has volumes by 2021. Over the next five years, Alibaba and Tencent) if they are able to create focused its efforts on the introduction of more global emerging markets are predicted to grow further partnerships with established financial global standards to facilitate smoother cross- three times faster than the mature markets institutions. Alongside seeking to create border payments. of Western Europe and North America. In partnerships with technology companies, the Alongside more flexible and forward-looking particular, emerging Asian markets are report recommends that banks and insurance regulation, these collaborations and initiatives expected to grow at 28.8 percent CAGR, with companies should seek to emulate Big Tech’s led by governments can create demand and growth led by sustained digital innovation, the approach to the development of new products, facilitate supply in the market, leading to the adoption of mobile payments, and financial and invest in technology platforms in an effort acceleration of non-cash payments in markets inclusion initiatives modelled on successful to mirror their successes. around the world. Non-cash payments are strategies already launched by Australia and As regards future strategies for growth, of strategic importance to any country’s Singapore, among others. the authors reject the notion of a one- economy, the authors argue, because they Reviewing the recent past, the report found size-fits-all approach to evolving non-cash speed up the velocity of money, facilitate that global non-cash transaction volumes grew transactions business in markets around the international trade, reduce cost and help to by 10.1 percent in 2016 to reach 482.6 billion, world. However, the report notes a number of combat fraud and corruption. with emerging markets in Asia, Africa, the Middle East and Central Europe leading this NUMBER OF NON-CASH TRANSACTIONS IN THE TOP TEN MARKETS growth. Notably rapid growth was achieved (BILLIONS), 2015–2016 in India (33.2 percent), China (25.8 percent) Growth and South Africa (15.1 percent), figures which 6.9% 25.8% 1.6% 9.0% 9.9% 36.5% 10.4% 5.1% 2015–16 5.7% 11.1% compare favourably with more solid growth of 148.5 7.1 percent in mature markets such as Japan, 150 140.5 Australia, North America and Western Europe. 120
Globally, the leadership of mature markets is 90 74.5 in decline, but they still transact the majority 69.7 60 48.0 of non-cash payments, accounting for 66.3 38.1 28.7 29.1 30 22.7 24.8 21.1 23.2 17.3 15.3 percent of the world-wide total. Over the last 12.7 13.9 12.0 12.6 9.610.6 0 ten years, mature markets have lost around Non-Cash Transactions Billions US Euro one China Bra il UK South Korea Russia Japan Canada Australia 20 percent of their market share to emerging 2015 2016 economies that are able to leapfrog the legacy Note: Some numbers may differ from data published in WPR 2017 due to previous year data updated at the source. payment systems of mature markets and Source: The World Payments Report 2018 adopt more advanced payment technologies.
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STRATEGY | DELIVERY | OPERATIONAL EFFECTIVENESS card notes GLOBAL
PAYMENTS INDUSTRY SET TO BE WORTH $110 TRILLION
New research from sharespost.com RISE OF THE MACHINES BANKS ARE LOSING M-COMMERCE describes the global payments industry as REVENUES a business opportunity worth $110 trillion, Prior to the advent of the internet, banks including domestic non-cash payments ($55 around the world enjoyed virtual exclusivity Over the next five years, Sharespost predict trillion), cross-border payments ($25 trillion), in payments, sharing revenues with the card mobile commerce transaction values to retail payments ($25 trillion) and smaller networks and processors as necessary. rise by 52 percent, with mobile becoming segments such as e-commerce ($2.8 trillion), Over the last decade, however, consumer more popular thanks to enhanced security remittances ($1 trillion) and bank-to-bank preference for mobile payments via messaging features such as biometrics and security payments ($1.3 trillion.) and e-commerce platforms has grown, chips embedded in mobile devices. According Sharespost’s research predicts revenues providing genuine competition for traditional to this report, most of this growth will come from payment transactions will break the banks and payment networks such as Visa from emerging Asian markets, specifically $2 trillion barrier by 2021, noting that they and Mastercard. Companies such as Ayden from companies such as AliPay, WeChat and will constitute 36 percent of total banking and Square are growing their revenues rapidly Paytm, which have already siphoned some revenues world-wide at that point – up from by partnering with technology firms in deals $40 billion in revenues away from the banking 27 percent in 2011. Sharespost identify the that bypass traditional banking networks and sector. Noting that these companies are leading actors in payments as being banks and deprive the traditional financial services sector adding deposit accounts to their functionality, the major card networks, with P2P and money of revenue. Although tech-based payment a development which “spells big trouble for transfer companies following them in terms of firms are smaller than the card giants, they banks who rely on consumer deposits to fund market capitalisation. are able to command higher shares of revenue their operations”, Sharespost speculate that Within this competitive environment, because they do not have to share revenues Facebook, Google, Apply and Samsung are however, this research highlights two with banks and other processors. all well-placed to bring these functionalities important trends – firstly, the rise of mobile Sharespost’s report sees blockchain as a to Western markets – and threaten banks’ and other non-traditional payment methods, significant potential disruptor for the payments traditional dominance in the payments sector which pose a threat to the traditional sector, noting that cross-border payments and across the developed world. dominance of banks and established payments remittances have already become significantly In regard to the threats the industry faces, networks; and secondly, the dynamic growth of cheaper and faster. Sharepost single out sharespost note that they expect to see the emerging Asian markets, which are also most cross-border blockchain start-ups Ripple and current wave of industry consolidation continue familiar and comfortable with non-traditional Circle as companies to watch, and see the as existing players use M&A to improve their payment technologies such as WeChat, AliPay developing legal and regulatory framework market share, or partner with emerging players and Tencent. around blockchain as a further spur to growth. to better serve their customers.
VISA AND MASTERCARD ARE THE TOP NON-BANK TRANSACTION VIA MOBILE DEVISES RISE STEADILY PAYMENT COMPANIES IN THE WORLD THROUGH TO 2012
Market Capitali ation, September 2017 Billions Global transaction value in the Mobile Payment segment Visa Inc. $ Millions Mastercard 22 2 American Express 8 PayPal FIS 2 Fiserv 22 Discover Cielo 52% First Data Global Payments 2 F EETCOR
Vantiv Worldpay Grouo Wirecard Square 8 22 Stripe 8 Western nion Edenred Ingenico United States Bra il Worldline United Kingdom Germany Euronet Worldwide 2 2 2 8 2 2 2 2 2 Germalto France The Netherlands Nets A/S NCR Denmark Source: Sharespost.com
10 payments cards & mobile magazine - november / december 2018 www.paymentscm.com GLOBAL card notes
BANKS MUST CHANGE OR MISS OUT, ACCENTURE WARNS
Accenture has warned traditional banks that percentage of new institutions found in the UK underline the dramatic shifts taking place: in new entrants have arrived as significant players (63 percent), Canada (47 percent), and Australia China, AliPay and WeChat collectively account in banking, and that the industry is now seeing (38 percent). for 94 percent of mobile payments. In the United revenues shift towards these new players. States, banks originated only three percent of According to Accenture’s new report, Beyond MORE THAN SKIN DEEP the new corporate credit extended in 2017, with North Star Gazing, “banks must act before it 97 percent coming from the capital markets or is too late, rotating quickly to new models to Traditional players will often try to pass new investment funds – both intermediated by new, compete in a fragmented, highly competitive entrants’ offerings off as being nothing more than technology-based credit platforms. and open landscape.” digital versions of their services, with attractive Using the example of Ant Financial in China, the Accenture cite specific examples of how Graphical User Interfaces, or “skins”, being added parent company of AliPay which has migrated the industry is changing in their efforts to to them. While accepting that this is sometimes successfully into retail banking accounts, encourage banks to move more quickly to the case, Accenture claim that this argument investment management and credit scoring, open, collaborative digital business models. ignores the extent of genuine, customer-led Accenture’s report urges banks to identify their Although some press comment has positioned innovation being offered by new entrants – such strategy based on an analysis of their current the EU’s second Payment Services Directive (PSD2) as a damp squib, Accenture note that it has allowed Deutsche Bank to create a THE MAGNITUDE OF STRUCTURE CHANGE VARIES BY COUNTRY partnership with airline group IATA that cuts