building the future of digital payments · shared economy will drive adoption of new mops using...

Chris Hill General Manager

ACI Worldwide (Pacific)

FST Summit Sydney – 10th of November 2015

Chris Hill

Vice President, Sales Pacific, ACI Worldwide

BUILDING THE FUTURE OF DIGITAL PAYMENTS

3 Confidential MEETS THE CHALLENGE OF CHANGE

RA

TE

OF

CH

AN

GE

History of payments The road ahead is unrecognizable……

You will be here

COMPETITORS’

OPPORTUNITY

GAP

PAYMENTS MARKETS

UNPREDICTABLE AND

VOLATILE

PAYMENTS MARKETS

PREDICTIVE AND STEADY

REGULATIONS REAL-TIME

PAYMENTS

NON-BANK

COMPETITORS

ANY-TO-ANY

PAYMENTS

CUSTOMER

EXPERIENCE

MOBILE

1980 2000 2015 2020

You are here

MANAGED CONTINUUM

SOCIAL

t

CARDS CHEQUES


Fintech disruption Are new entrants eating your lunch?

2014 was the year for

FinTech, with worldwide

investment jumping over

200%

Seriously under-estimates

FinTech growth in

China

Payments,

banking & corporate finance

represent the key areas of

investment

Source: McKinsey


“…innovation is a very difficult thing in the REAL world…”

Richard Feynman, Physicist

Where are the Opportunities in Payments?

Changing face of the Customer (Adapt)

Always On, Everything Now, Social & Less Private

Customer Experience is king

Technology (Leverage)

Mobile (NFC, BioMetrics, Security Element)

Blockchain

Regulation (Advantage or Disadvantage??)

Capital Ratios & Liquidity

Security (Fraud/Privacy)


Asia Pacific consumers drive demand for new MoPs Less visibility as third parties become closer to the customer

82% Used a new

Method of

Payments (MoPs)

29.4% Used a

contactless wallet

accessed through

a Smartphone

71.5%

29.4%

11.0% 16.8%

Online paymentservices

Smartphone wallet Mobile money/featurephone

Others

14.2%

70.9%

39.4%

17.3%

28.2%

10.4%

22.4% 25.6%

Australia China India Indonesia Japan Malaysia Singapore ThailandSource: ACI Worldwide & IDC Survey, September 2015

HAVE YOU EVER USED ANY OF THE ALTERNATIVE PAYMENT METHODS,

NOT PROVIDED BY A TRADITIONAL BANK?


60% of Australians

intend to use New

Methods of Payments –

closing the gap of

Mature Vs. Emerging

Markets

66.4% of Australians

have used online

payment services such

as PayPal and Google

Checkout to purchase

goods or services online

Rise of online & mobile payments for e-commerce

Source: ACI Worldwide & IDC Survey, September 2015

77.8%

46.4%

35.2%

85.5%

73.7%

59.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Online payment services Smartphone Wallets Mobile money services

Mature Markets Emerging Markets

CONSUMER INTENTION TO USE NEW METHODS OF PAYMENTS – MATURE VS.

EMERGING MARKETS (ASIA PACIFIC)

41% of Australians

would prefer to use a

smartphone wallet to

purchase goods online

The swell is rising…..who will meet this demand?


Consumers diversify their payment behaviors 18 to 34 year olds are very sophisticated payers

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

18 – 24 25 – 34 35 – 44 45 – 54 55 – 65 65+

Purchase order Loyalty account Cash-On-Delivery (COD)

Online payment services Bank transfer Debit card

Credit Card Linear (Online payment services )

WITHIN THE PAST 6 MONTHS HAVE YOU USED ANY OF THE FOLLOWING PAYMENT METHODS TO PURCHASE GOODS

OR SERVICES (ASIA PACIFIC) ?

ON

LIN

E V

IA D

ES

KT

OP


Demand for FASTER payments is already here Primary driver for adoption of new MoPs is speed and efficiency

16%

47%

21%

13%

3%

Better rates

Faster more efficient

Trust these services more

Do not have access toregular banks

Other

Because the customer is looking for faster

experience and trust these services more…

NOT because they offer a better rate


80% Were aware of

internet sharing

services

62% Were USING internet

sharing services

60 - 75% Were planning to use

in the next 6 months

Behavior driven by the rise of internet of services adoption


Shared economy will drive adoption of new MoPs Using mobile to pay “in-app”

0%

10%

20%

30%

40%

50%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Paid for virtual pdts

Shop online

Pay for bills

Pay for tickets

Pay for mobile top up

Giving money

to f&f

Shop offline

Pay for services

MO

BIL

E

ONLINE

Nearly 46% of

consumers paid for

services such as Taxi fare

with a mobile wallet

Nearly 25% used their

mobile wallet for paying

for services regularly on

a weekly basis


IF YOU MADE ANY OF THE FOLLOWING PAYMENTS, WHAT ARE THE THINGS

YOU WOULD TYPICALLY PAY FOR?


The internet of services A revolution in the making

39.8%

26.9%

17.0%

9.6% 7.5% 7.3%

4.6%

Taxi hire services Online meal delivery servicesRoom and accommodation Car sharing services, iCarsclubNeighbourhood community Meal hosting and sharing servicesChores and other home

All MoPs were being used.

Big opportunity to displace

cash for in-app payments

Use of mobile payments in

the younger generation

catching up with cash or

card


PRIMARY USAGE OF SHARED ECONOMY SERVICES - % OF CONSUMMERS

THAT HAVE USED


The new online economy: xCommerce Convergence continues to create a new platform and ecosystem

THIS WILL BE AN

IMMEDIATE PAYMENTS

ECOSYSTEM


The new online economy: xCommerce New MoPs will be an integral pillar in developing the new ‘ecosystem

13

Increasing

convergence of

the ecosystem

especially in Asia

Pac. where digital

payments and

social will be

integral pillars

supporting future

growth



Building ecosystems - Facebook community Convergence of social, commerce and payments


From analogue to digital payments Transaction banking may see even more disruption

ONLINE BANKING

40%

FRAUD

DETECTION

34%

PAYMENTS

RECONCILIATION

29%

CORE BANKING SYSTEM

30%

GLOBAL

REMITTANCES

25%

SUPPLY

CHAIN/TRADE

FINANCE

25%

PAYMENT ENGINE

40%

AML

40%

% INDICATES BANKING

TECHNOLOGY BEING

REPLACED BY 2018 BY THE

TOP 250

• Immediate Payments - Need

fee-based income

• Liquidity Management

• BASEL III

• PSD2

• Mobility

• ISO20022

• Regulatory pressure

• New entrants / disruption

• Rise of emerging markets

• Winning SMB

• Efficiencies / Hosted

• Legacy Systems


Disrupting models - Blockchain Banks move to POCs and investigate use cases

PAYMENTS VALUE CHAIN - TRANSACTIONS

• Greater

transparency leading

to better reporting

• Significant

opportunity to

reduce the cost of

payment processing

• Reduction in errors

and exceptions

• 7-10 second

windows would

greatly increase the

speed of transaction

clearing

TRANSACTION BANKING

CROSS BORDER


FIDOR BANK

The first API bank.

Partnership with

Ripple Labs to use its

payment protocol to

provide customers

money transfer

services in multiple

currencies at a lower

cost ING BANK

POC into

blockchain with

the aim to

improve the

speed of

transaction.

WESTPAC

In early stages of pilot

testing a Ripple proof

of concept with its staff

for making low-value

cross-border payments

SANTANDER

Claims to

have 20-25

use cases for

blockchain

CLAIMS THAT AROUND

AU$12 BILLION

COULD BE SAVED IN

BANKS INFRASTRUCTURE

BY SWITCHING TO THE

BLOCKCHAIN

Disrupting models - Blockchain Banks move to POCs and investigate use cases


Do you speak payments? What banks and merchants need to consider to compete in Australia?

POWER SHIFT

The customer is

driving demand!

FLEXIBILITY

Displacement is slow/limited

Adoption is moving fast

INNOVATION

Enable new payment types (MoPs)

to stay ahead of new competitors

FRAGMENTATION

Are you losing the direct

relationship?

CONVERGENCE

Payments, social, mobile,

eCommerce, retail & wholesale

REAL-TIME FRAUD

Faster, immediate payments

requires real time fraud

management


The Framework Any to any, real time payments with the UP Framework

CHANNELS

BATCH

MOBILE

ONLINE

BRANCH

POS

ATM

Bill Pay

P2P

FI Core

Systems

Batch

Network

Debit / Credit

Remittances

SOA Business

Services SOA Business


Services

SOA Business



Services

SOA Business



Services

Payment

Information

Model

Monitoring

Management

Templates

Session

Orchestration

Reporting


The ONLY

thing that

is CONSTANT

is CHANGE Heraclitus

We once believed that…….

BUT…..Change is no longer constant, it’s speeding UP.


ACI Worldwide and IDC survey http://www.aciworldwide.com/campaign/2015/ap-digital-payments/

building the future of digital payments · shared economy will drive adoption of new mops using...

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