Who’s shaping the future of payments?

In June, we kicked off the first online session in our The Hub Series 2021. The first session, sponsored by FIS, focused on insights from our keynote speaker Dave Birch from the UK and a panel of experts on ‘Who’s shaping the future of payments’.

Our Chief Executive Steve Wiggins opened the session by introducing the topic and our speakers. We then moved on to Dave, beaming in from the UK, who shared his thoughts around the inter-pandemic payments era and what he believes will come next. He was then joined by our panellists, panel facilitator John Ryan (Director General Policy, EPA Asia), Andy White (CEO, Auspaynet), and Maxine Elliott (CEO, Paymark). The panellists each offered a regional perspective (New Zealand, Australia, Asia, UK/Europe) and a wealth of knowledge and experience on the topic of ‘who’s shaping the future of payments’.

Dave’s presentation and the robust panel discussion that followed was interesting and thought-provoking, sparking a lot of questions from the online audience. In no particular order, we’ve pulled out some highlights from this first session below.

If you couldn’t make the live session, you can now watch the full video recording.

Session 1 highlights

1. Going cashless needs a strategy

The COVID-19 pandemic has accelerated the trend towards going cashless in most economies, but there is also a need to have a plan for those who are at risk of being marginalised or excluded including the unbanked and underbanked. Dave said research showed that the amount of cash in circulation during the pandemic in the UK went up significantly even though payment transactions using cash collapsed. This could mean people were holding on to cash for security reasons but not spending it. He believed that now was the time to design setups for merchants and consumers which meant everyone will have access to the tools of the future. Limits in the current payments infrastructure or prices should not be used as an excuse.

2. CBDCs are the way of the future

And it’s coming faster than we thought. Dave said many central banks including the Bank of England and the People’s Bank of China are now looking into central bank digital currencies (CBDCs). He said there are six key drivers for digital currency and those are sovereignty, cashlessness, resilience, influence, sustainability, and innovation. Dave believes that a new currency cold war has already begun between public, private and individual interests when it came to digital currencies, and the conversation that needed to happen was a complex one involving the larger digital identity space, and payments vs the traditional role of banking.

3. The future of payments will have many players

The panellists believed that the future of payments will look significantly different and be shaped by many different players. Both regulators and private sector interests would play important roles. They discussed that one of the key challenges for the industry will be how to keep the big tech players e.g. Facebook or Google from completely dominating domestic payments spaces.

It was important to ensure smaller players survive, as they had the experience and expertise for local markets, and this was an area that regulation, including the opening up of consumer data, could help with as it has done in Australia and the UK. What they saw in Australia, which was already a heavily contactless market, was a switch from digital card to wallet. So even though the Australian market did not initially see the need for QR codes, that has now changed.

The panel also discussed how the best solution to sub-scale markets would be to find ways to allow more competition. Digital currency could allow this in some ways, which is why regulators are cautiously moving into this new scene. The panel wrapped up by talking about how open banking was no longer enough, and open finance, banking as a service and embedded finance, is where the industry has to go next. The organising principle for these changes should be financial health and wellbeing.

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.