Industry Views: 2015 Game-Changers, Priorities for 2016
To kick off the New Year, we asked payments industry thought leaders to tell us what happened in 2015 that will most influence payments in 2016 and to discuss their hottest priorities for the next 12 months. Responses run the gamut from a combined Visa/Visa Europe to compliance, wearables and the impact of Chase Pay.
Which partnership, deal, launch, IPO or acquisition from 2015 will have the biggest effect on the payments industry in 2016?
Two agreements involving JPMorgan Chase likely will cast long shadows in 2016 and beyond. First, the creation of ChaseNet, which links the bank’s card issuing programs and its merchant acquiring business, will probably alter POS acceptance economics by creating “on-us” transactions when Chase cardholders frequent Chase-supported retailers. Second, thus far, Chase has been the only major card issuer to embrace m-POS network symmetry by striking a deal with CurrentC, the digital wallet offering created by 50 of the country’s largest merchants. While neither transaction will change the macroeconomics of the payments industry in the short term, they are significant suggestions that the decades-old freeze in relationships between bankers and retailers might be entering a phase of global warming.
—John MacAllister, Principal, Dorado Industries
Visa Inc. acquiring Visa Europe. On the face of it, it’s a simple merger of two geographic regions, but it could have far-reaching implications. Visa Europe will change as it becomes a global commercial organization rather than a membership organization with power held by the largest members. Expect to see significant changes in operating rules, speed/orientation of decision making and commerciality.
The acquisition will get the Europeans amongst us thinking again about a European Card System. Visa Europe argued (with limited success) that it represented such a system and that the EU didn’t need to encourage another. Given the U.S. ownership of both major card schemes operating in Europe, somewhere in the EU and possibly in the board rooms of EuroZone banks, there will be some head-scratching going on to see if the idea of a European/Eurozone alternative payment system can be dusted off (again). Russia seemed to manage it quickly!
—Alex Reddish, Business Development, Europe, Raphaels Bank
For me, the most important development last year has to be PayPal’s IPO. It’s an ambitious company, having gone on the record as wanting to dominate all areas of digital commerce, and the spin-off from eBay signals that PayPal is going full-focus on that plan. Since then, it’s come out with some interesting and innovative things like PayPal.me, and it’s likely to be able to pursue these directions in 2016, more fully under its own guidance.
As a self-contained payments network, PayPal is in a good position to adapt to shifts in the wider payments market. So long as the user base remains high and the service remains reliable, the technologies and funding sources involved almost don’t matter. So I think we’ll see PayPal stay prominent and produce a lot more new services in 2016.
—Sam Murrant, Analyst, Verdict Financial
There isn’t one. Rather, there is a larger, generational infrastructure and business model shift occurring within many areas that have an impact on payments. These changes are all centered on technology modernization. We’re seeing disruption in payment processing, traditional banking models, mobile adoption and alternative lending. How consumers now expect to do business and interact with financial institutions coupled with new technologies and providers are driving a major shift in business models. Next-generation platforms and architectures are needed.
—Marc Winitz, Chief Marketing Officer, i2c
What is the No. 1 priority for your business in 2016?
Aside from continuing to grow our business and our portfolio, our No. 1 priority in 2016, which is the same as past years, is excel in the compliance arena. Compliance has always been the top priority for Sunrise Banks and will continue to be. We have seen more pressure on our industry over the last few years and with the anticipated release of the final CFPB Prepaid Card Account Rule in 2016, we likely will see more challenges. As we continue to work with our partners to add more features and functionality, and as regulatory requirements are enhanced and changed, keeping our products and services compliant will always be our top priority.
—Joan M. Herman, Senior Vice President, Sunrise Banks
Our focus in 2016 for our Card and Comprehensive Payables business is to continue growth in a sustainable manner to benefit our clients, our firm and our shareholders. Specifically, we’ll concentrate on doing business with clients that value a long-term partnership with Bank of America Merrill Lynch and the investments we are making on their behalf in technology, service and compliance.
—Kevin Phalen, Head of Card and Comprehensive Payables for Global Transaction Services, Bank of America Merrill Lynch
In 2016, MasterCard will continue to deepen our dedication to driving financial inclusion. Two billion people still don’t have a bank account. That’s about half the planet. We believe that to solve for this means being business-driven and purpose-driven. That’s why we’re committed to combining the power of innovation, technology, and public-private partnerships to connect 500 million consumers and merchants to the financial mainstream by 2020.
To make that happen, we’re working with governments, banks and international development organizations like the United Nations and the World Bank, as well as foundations like The Bill and Melinda Gates Foundation, which is funding our MasterCard Innovation Lab for Financial Inclusion in East Africa.
To make the Internet of everything meaningful, we need the inclusion of everyone. Our world is more technologically connected than ever, and we have a once-in-a-generation opportunity for people to become more financially connected than ever.
—Michael Fiore, Group Executive, Global Prepaid Solutions, MasterCard
2016 is a huge year for PPS. We are targeting $10 billion of processed volumes and will be truly international with major launches in the U.S., Brazil, Mexico, China, UAE and Qatar to build on our comprehensive European footprint. This takes our in-country presence to 30 countries globally.
Additionally we are servicing many diverse verticals, including retail, corporate payment, benefits, FX, expense management, fuel cards and banking—all from a single processing platform.
My main priority is to ensure we continue to deliver the quality and innovation we’re known for at these volumes across many borders and time zones. What makes this a special achievement is that unlike many in this space, it’s not just processing we deliver cross-border. PPS is unique in providing true value-added services; such as BIN sponsorship and compliance, FX provision, risk management services, load and distribution channels, and supply chain management.
—Ray Brash, CEO & Chairman, PrePay Solutions
We continue to focus on the global growth opportunity in payments. It’s just massive. The launch of offices in Sydney and London this year along with our new global operations center in Montreal support our efforts worldwide.
—Marc Winitz, Chief Marketing Officer, i2c
At Global Processing Services (GPS) we envisage that many more of our program managers will launch programs in 2016 that offer the use of wearable payment devices. In preparation for this, GPS in 2015 integrated with DigiSEq, the world’s first company to be certified by MasterCard to remotely provision the M/Chip Advance application.
The wearables industry is growing rapidly. By 2018 more than 250 million smart wearables will be in use and shipment of smart wearables is expected to grow from 9.7 million in 2013 to 135 million in 2018, according to CCS Insights global forecast.
The use of wearables for events is particularly interesting, and we expect that over the next 12 months these payment devices will operate at all major events globally.
—Neil Weeks, Chief Commercial Officer, Global Processing Services
Paybefore’s goal is to present many points of view to offer readers new insights and information. The opinions expressed are not necessarily those of Paybefore.
