What tech is shaping the future of payments?

We had a great second session of The Hub series 2021 last week, where we heard thought-provoking insights from Kiwi futurist and serial tech entrepreneur Melissa Clark-Reynolds, and our panel of experts on ‘What tech is shaping the future of payments?’  

Our international panel comprised of facilitator Soumya Srinivasan (Consultant – Payments and Strategy, Split Payments), and panellists Mac Wang (Head of Australia and New Zealand, Stripe), Tom Greenwood (CEO, VOLT, UK) and Ivana Tranchini (Head of Products and Solutions, Visa New Zealand & South Pacific). 

We also heard from the Minister of Commerce and Consumer Affairs, Hon Dr David Clark, who shared his thoughts and aspirations about the wider digital economy and digital enablement in New Zealand. 

This future-focused session offered compelling thought leadership on the evolution of payments. Below we’ve compiled some of our top insights and our Session 2 sponsor Buddle Findlay have also summarised their own key takeaways on their website.  

If you missed Session 2, you can now watch the video recording and read answers to audience questions asked to Melissa.  

Session 2 highlights

There are no disruptive technologies, only disruptive business models 

Keynote speaker Melissa Clark-Reynolds, who has spent 25 years of her career working in the technology space and is a trained futurist, says disruption is never due to technology alone. Technology takes a long time to bubble along before the right opportunity or business model presents itself and allows it to become ubiquitous. Melissa says it’s not the technology that changes a sector, but the passing of time which then causes a shift in thinking and consumer behaviour. For example, the subscription model of business, where people pay a monthly fee but never actually own a product or software, is a disruptive business model which is now seen everywhere. 

We need to make all payment experiences frictionless  

The panellists discussed the need for payment pain points to be removed. This could mean the increased use of APIs to embed payments within the shopping experience, so the consumer never has to worry about stopping to pay, like Uber.  

Visa’s Ivana Tranchini talked about the evolution of existing tech for new use cases or, as Melissa talked about, business models. For example, the use of tokens which can be used in place of card numbers and are more convenient and secure as the numbers can be easily changed. Ivana says tokens can be managed centrally through an app or platform, and this offers an added layer of security for customers and can reduce friction in the payments process. 

Stripe’s Mac Wang thinks the focus of any future technologies should be on removing customer pain points. Notably, two that they’ve found at Stripe are how to help businesses successfully convert and maximise acceptance rates, but at the same time protecting from fraud. 

The next big things in the industry 

What are the next big things after subscription based business models? Melissa thinks there’s two: the gifting economy, where people buy something for themselves and automatically gift something to someone else; and pre-orders, which is where the consumer pays for something in advance of production. Examples of both business models can already be seen in use by companies like Patreon, Kickstarter, Nespresso, and Disney. The rise of these business models will be concurrent with the popularity of social shopping, where payment systems are integrated with social media, allowing consumers to see and buy what other people are seeing and buying on their social feeds. 

The future is not cash, economies are going digital 

The pandemic has driven a drop off in the use of cash and a rise in mobile payments, says Melissa. She said during the pandemic digital wallets eclipsed cash at point of sale globally for the first time and she doesn’t see that going back. Melissa thinks the future of cash is that it will become something collectible rather than something we transact with, much like stamps.  

Minister of Commerce and Consumer Affairs Hon Dr David Clark says it is the government’s expectation that open banking will deliver payment methods that again put New Zealand at the forefront of future payment technologies. The government is currently working on two pieces of legislation, the Digital Identity Framework and Consumer Data Right (CDR) that he believes will help Kiwis as they transition to the digital economy. 
 
VOLT’s Tom Greenwood thinks what we’re seeing now is the rise of real-time payments. As the line between online and the “real” world becomes increasingly blurred, payment infrastructures also need to evolve. For example, 86% of the world’s central banks are looking at digital currencies, says Ivana, so it’s not a question of if countries will implement a digital currency, it’s when. 

Thank you to our speakers and sponsors 

Thank you again to our keynote speaker Melissa and panellists Soumya, Tom and Ivana and Mac for their time and sharing their expertise and insights with the industry. And thank you to all our sponsors of The Hub Series 2021: Session 1 Sponsor FIS, Session 2 Sponsor Buddle Finlay, Session 3 Sponsor Tax Management NZ and Series Supporter Sponsors SWIFT, Middleware Group and Westpac.