1. Vol 1. Issue 7
Dec. 2015
YOUR GATEWAY TO THE WORLD OF PAYMENTS
PCM
Exciting stories about developments in the payments world 2016 | + Deep insight into omni-channel strategies
Blockchain
awakens
2. Welcome to Vol.2 - 1st issue
You are reading the first issue of the Payments & Cards Magazine in 2016. In order
to keep our clients, associates, subscribers and all payments professionals in the
loop, we have decided to create a monthly magazine.
The first issue of 2016 features an expert interview on omni-channel payments,
thought leader articles, top jobs and more! We’re also introducing a new section
in this issue where we present and discuss insightful infographics provided by our
partners.
The magazine is also a good way for you to keep in touch with what is happening
in the Payments world as well as like minded professionals. If you haven’t checked
in with us lately, we think you will be surprised and excited about all the wonderful
things happening in the industry.We hope to hear from you soon, and we welcome
your feedback!
Throughout each issue, there will be descriptions and lists of events within the
Payments industry happening this month, as well as announcements and the latest
developments & partnerships. If you are a thought leader and would like to be
featured or present your thoughts, please get in touch.
What is more, as a business, the magazine offers you various advertising
possibilities. Want to learn more? Just contact us!
For any questions, suggestions, or concerns, please address them to the editors:
Amir Abdin - amir@paymentsandcardsnetwork.com
Duc Dang - duc@paymentsandcardsnetwork.com
The Payments & Cards Network team wishes you good reading!
002
3. Letter from the CEO2015 was a year of change and the beginning of accelerated consolidation in the Payments & Cards
Industry.
We saw some very large processors acquired and new initiatives from innovative merchants as they
build in house payment teams as well as their own platforms.
The Payments & Cards Network was able to strengthen existing relationships with large, international
players as well as gain new clients both on the Merchant, Consulting, Scheme & Processing sides of
the industry.
From a talent perspective, it’s impossible to work with every single business involved in payments so
we have strategically chosen to work with select companies who share their values with us and vice
versa. With this strategy in mind, the Payments & Cards Network has grown 40% as a business in
2015 which has led to an increase of 62% in revenues.
We are very proud to announce our new locations as London and soon to be US offices which will
bolster our offering across the world as we maintain our goal of being the number one global supplier
of talent to the Payments & Cards Industry.
With the increased uncertainty of the political climate in South Africa, despite a very successful year
for us, we have taken the decision to cease our operations in the region and will continue servicing
South Africa & Sub Sahara remotely from our EMEA HQ in Amsterdam. This has not been an easy
decision to make but in the interest of servicing our existing customers globally, we feel resources
can be put to better use elsewhere.
PCN also launched Payment.jobs this year which is the only truly international job board dedicated
to the industry. Early results are good but such as any board of this nature, it will take time to gain
full traction. As every year, it is most important to reflect on goals unrealized and realized but most
importantly the people involved in the success.
It has been our mission from day one to hire individuals who are capable of taking our business to the
next level and work as a team that not only contributes ongoing value to the industry but are proud to
work along side each other. Perhaps our greatest achievement this year has been the continuation of
this success and hiring some very talented individuals who have been able to hit the ground running
and already add to the sterling reputation of our company.
As CEO I could not be happier to be working alongside these individuals and look forward to
welcoming additional members of the team in 2016.
In closing I would like to thank our customers who have supported us from day one as well as new
clients who have just started working with us. We will be issuing our annual quality survey in Q2 of
2016 and I trust results will be even an improvement of 2015.
See you in 2016 and we look forward to seeing you in the network.
Jordan Lawrence
CEO
Payments & Cards Network
003
4. thoughtleaders
STORIES
spotlight
Contents
Thought Leaders: Unlocking Wallet Payments in Sub-Sahara
Jide Akindele continues the series about the development of the mobile
payments industry in a promising part of Africa.
Spotlight: Toast
This time we talk to the Asian P2P money
transfer application maker of Toast.
Hot Jobs
Looking for a new role and exciting challenges
in 2016? Check out our latest job opportunities!
Events
Here we showcase the most exciting upcoming
events in the payment industry.
Infographic: The State of Fintech Investment in Africa
mondato looks at the opportunities in the African Fintech market.
Thought Leaders: Southeast Asia: 34.5 billion e-commerce future
Aung Kyaw Moe discusses the e-commerce potential in Southeast Asia and
the reasons why the ASEAN powerhouse looks promising.
8
004
3
14
Thought Leaders: Forget Uber moments, Are we witnessing a napster moment?
Mark Taylor gives us an insight into the perspectives and challenges of the
ever more relevant cryptocurrencies.
5
8
10
13
21
24
25
10
Infographic: Trends in payments solutions
PAYTOO shows us what impact the growth
in mobile phone usage has on the payments
world.
18
Expoert Interview: A roadmap to omni-channel payments
Juspal Manic dives into the world of omni-channel payments and discusses
critical factors when designing this new type of strategy.
15
6. forgetting feature phone users (USSD driven) who
equally participate in mobile commerce, except
not via the internet and can also receive such
incentives via SMS if they do not have access to
the internet. For the USSD users incentives would
be more off-line driven incentives typically driving
them to brick and mortar stores.
According to some live case studies, particularly
in Sub-Sahara Africa, where off-line incentive
programmes associated with mobile wallets took
place over a sixth month period, have shown that
over the campaign period mobile wallet usage
increased transaction payments exponentially.
It was also observed that new adopters also
joined the service due to the incentive offerings,
in addition the retention rates remained
exceptionally good with a reduction of inactive
accounts. We have seen similar case studies in the
USA and it shows this new wave to be an effective
way of maintaining consumer satisfaction as well
as increasing loyalty, transaction growth and
adoption.
Prediction for 2016, Sub-Sahara Africa will see
more merchants accepting mobile payments
due to transaction growth. We expect known
international brands to start testing the waters
in the African markets in various forms in the
m-commerce space, and expect consumer micro
payment thresholds to increase as they gain more
confidence in the payment medium.
MMIT, Mobile Media Info Tech, is a mobile payment processor with a mission to
revolutionize the mobile payment process.
MMIT focuses on the Sub-Sahara Africa market and partners with financial institutions
and international merchants to provide value added services to mobile wallet providers
and users. Please visit MMIT at www.mmitonline.com.
Jide Akindele, Founder,
MMIT
Jide is a visionary entrepreneur with a deep and wide
knowledge of technologies based in the mobile money and
payment transaction space. Mr. Akindele has held various
directorship positions for companies in West Africa and has
worked in USA, Nigeria and the UK since 2007.
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7. Advisory Panel
Sponsors,Exhibitors & Partners
Co-Founder, Jumia/CEO &
Co-Founder, Supermart
An award winning and
celebrated businessman in
Africa, Raphael heads up the
biggest online retail platform
in Nigeria, Supermart and has
taken the African business
scene by storm. His previous
work with one of the biggest
online companies, Jumnia,
launched him to success, and
cultivated his passion for Africa
and its development.
Co-Founder and CEO,
Gyft
Most will instantly recognise
Vinny straight from the small
screen and his position on
South Africa’s Dragons Den,
and others will know him
as the co-founder of some
of the biggest initiatives in
online tech in South Africa:
Clicks2Customers, Gyft and
Silicon Cape Initiative. He
has since moved to the actual
Silcon Valley and is rubbing
shoulders with big names
like Richard Branson among
others.
Principle, Digital Growth
Africa & Middle East
Emilian’s passion for
eCommerce and online
trends shines through when
he speaks. He describes
himself as an eCommerce
and global entrepreneur and
has headed up some of the
biggest companies in South
Africa, as well as the rest of
the world including Rocket
Internet, Groupon and Zando
among others. He is currently
living between South Africa
and the Middle East with his
investment initiatives.
Internet Strategist,
Naspers
It has been said that anything
that this man shares will be
deep and thought provoking.
Joe used to be Mary Meeker’s
right hand man, and was part
of the team that took LinkedIn
and MailRu public. Described
as the most experienced man
in internet in Africa, his skills
and expertise are in high
demand and he was pounced
on by Naspers to hold a
position here in Cape Town.
RAPHAEL AFAEDOR VINNY LINGHAMEMILIAN POPA JOE OKLEBERRY
DiGAME
CEO,
MIH/ Naspers
Former CEO of Kalahari.
com, Caren was relocated
to Cape Town from Berlin,
with prior roles including
a nine year stint at eBay
as general manager for
shopping.com Germany, and
as a director and GM for eBay
Express Germany. Caren
has also worked as COO
at brands4friends, an eBay
subsidiary in Germany.
CAREN GENTHNER-KAPPESZ
Founder and CEO,
Konga Online Shopping
Sim is the Founder and
Executive Chairman of
DealDey Limited. He has over
13 years experience in New
Media & Investment Banking
and worked with leaders such
as MicroStrategy, Lucent
Technologies and Real
Networks. Sim also served
as the Africa lead for Google.
He graduated from George
Washington University,
Dartmouth College & holds an
MBA from Harvard Business
School.
SIMDUL SHAGAYA
eCommerce
Africa Confex
Follow @eCommerceConfex and @KineticEventsSA on
Twitter for daily updates and news feeds.
17 & 18 FEBRUARY 2016 | THE CTICC, CAPE TOWN
WWW.ECOMMERCE-AFRICA.COM
commerce
Africa
WATCH OUR VIDEO
The eCommerce Africa Confex gathers 1500+ Exhibition Visitors, 70+ Sponsors & Exhibitors, 500+ Conference
Delegates and 90+ Guest speakers.
Connecting the regions’ leading merchants; major retailers; brands; developers; designers and eCommerce
experts, the summit is focused on exchanging inspired and innovative ideas, discussing emerging trends and
making lasting connections.
Organisers, Kinetic, have secured some of the best global solution providers who are ready to provide the African
continent with great products and services at the most exclusive and by far the largest Commerce gathering on
the African continent.
To get involved with the show, fast track your sales or even network with industry leaders;
Click here to get your free expo pass OR Register for a full delegate pass at 15% discount.
For general enquiries and/or information about sponsorship, contact marcia@kineticevents.net
007
8.
9. About mondato
Mondato is a boutique consultancy specializing in the provision of strategic,
commercial and operational support across the mobile finance and commerce
(MFC) ecosystem. Established in 2008 on a foundation of years of experience in the
telecommunications, technology and financial sectors, Mondato possesses a unique
Global investment in financial technology continues to increase exponentially, confirming that
“fintech” is on the rise. While the majority of funding has been dolled out to North America
and Europe, the most unmet need for innovative digital financial services lies in emerging
markets. The bottom of the pyramind (BoP) in regions like Sub-Saharan Africa lacks access to
traditional financial services, making consumers more open to new technologies. Many fair-
weather investors are reticent to engage entrepreneurs targeting the poorest members of
the population, which in turn, creates more value for those who do invest. Beyond the BoP,
Africa’s economic growth, increasing middle-class and Internet penetration makes her a worthy
candidate for investment. Contrary to the prevailing opportunity, less than 1% of private equity
and venture capital funding went to Africa in 2015.
To learn more about opportunities for investing in African fintech,
please visit www.mondato.com
Infographic description
009
10. Southeast Asia’s $34.5 billion e-commerce future
does it check out?
A
rose by any other name,
according to Shakespeare,
would smell as sweet. And
whether the ten-member
cluster of nations surrounded by
economic powerhouses Australia,
China and India goes by the Association
of Southeast Asian Nations (ASEAN),
or simply as Southeast Asia (SEA),
the region’s star is set to shine.
Comprising ten member nations (Brunei,
Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Singapore,
Thailand and Vietnam), ASEAN looks
to become an economic powerhouse
in its own right. It is home to around
625 million people, 744 million mobile
devices, nearly 200 million Internet
users and a GDP of over US$2.6 trillion.
It will also boast a 400 million-strong
middle class by 2020 (Nielsen).
Amid the backdrop of political rhetoric
transforming into economic reality,
McKinsey attributes ASEAN’s rise to
three powerful socio-economic trends
– rapid economic growth, urbanization
and technology adoption (notably
Internet penetration and mobile
technologies). Moreover, with the
wheels in motion for a unified ASEAN
Economic Community (AEC) - set to
come into force as early as end-2015 –
the region has embarked on perhaps its
most exciting phase of integration and
cross border trade in the association’s
48 year history. Together these factors
are transforming the region, its people
and its economies, with e-commerce
and m-commerce leading the way.
Building momentum in a fragmented
region
With rising online connectivity, with
improvements in financial, logistical,
security and alternative payment
infrastructures, with more and more
e-commerce M&As and with the AEC
kicking in, ASEAN is ripe with potential.
Frost & Sullivan estimates the B2C
e-commerce compound annual growth
rate (CAGR) of Indonesia, Malaysia,
Philippines, Singapore, Thailand and
Vietnam at 37.6 percent from 2013
to 2018, growing from US$7 billion to
US$34.5 billion – a number that would
be even higher if we were to include the
remaining five member states.
ASEAN holds such promise for
governments, businesses and
investors for a number of reasons:
Online connectivity
Southeast Asia comprises 744
million internet connections, with 119
mobile subscriptions per 100 people
(WeAreSocial, 2015). It already accounts
for 7% of global internet users, catching
up to Western Europe (12%) and the US
(11%). Internet penetration has risen
414% in Cambodia, 346% in Myanmar,
47% in Thailand – year-on-year – in
FY2014. The average person in the
Philippines spends 6.3 hours a day
online, in Thailand 5.5 hours, in Vietnam
5.2 hours, in Indonesia 5.1 hours and in
Singapore 4.7 hours. These are ahead of
China’s3.9hours,SouthKorea’s3.4hours
and Japan’s 3.1 hours. The proliferation
010
By Aung Kyaw Moe
Dezember 29, 2015
11. 011
of tablets, phablets, smartphones and
3G – even 4G – services will play a role
in further driving internet penetration
rates, as technological advances
continue to make devices affordable
even to the less-affluent, key to enabling
the region’s e-commerce future.
Financial infrastructure
What’s remarkable about the 2014
US$7 billion estimate of ASEAN’s B2C
e-commerce is that it has achieved this
despite a financial infrastructure that
has a lot more potential – and need –
to grow. An estimated 70 percent of
SEA residents lack access to traditional
banking services (McKinsey). Moreover,
with credit card penetration in some
markets below 5 percent, e-commerce
in ASEAN is understandably
underdeveloped. Consequentially,
SEA online retail accounts for around
1 percent to 2 percent of total retail
sales, compared to China, at 11 percent
(FT Confidential Research). However
this figure for China was, as recently as
2010, 2.5 percent – a growth trajectory
many anticipate SEA will follow in the
coming years, against this backdrop of
rapidly evolving financial infrastructure.
Logistical infrastructure
Logistics and ecommerce have so far
proven to sometimes be a mismatch for
SoutheastAsianshoppers,asonlyasmall
proportion receive free delivery. This
means shoppers are incurring logistical
costs that retailers would usually, in a
competitive market, help to absorb.
Southeast Asia’s landscape poses a
unique set of challenges that is slowing
the momentum e-commerce should
be seeing. These include late delivery,
damaged or lost packages, the prevailing
practise of cash-on delivery, lengthy
return procedures, and a lack of special
services such as trial or installation –
particularly when given the geographical
barrier between buyer and seller.
In response, firms can either build
their logistics systems, or partner with
logistics companies. China’s Alibaba has,
for example, acquired a 14.51% stake
in Singapore Post, which will spend
US$145 million on building a regional
ecommerce hub. Alibaba’s ecommerce
site AliExpress is seeing tremendous
growth across the region. Meanwhile
Uber has partnered LBC Express in
the Philippines to deliver Christmas
presents on-demand. And that’s the
role private and public sector actors with
deeper pockets play – the ‘uberfication’
of the region’s under-developed
logistical sector, in turn building
intra and cross-border commerce.
Transaction Security
Rapid progress has been made in the
domain of payment infrastructure and
online security. Consumers are, however,
put off from buying online – the Financial
Times recently estimated that 90 per
cent of visits to ecommerce sites do
not result in sales. Part of the reason is
because e-retailers are bound by Caveat
Venditor, where governments impose
strict regulations to hamper illegal
money laundering operations across
borders, indirectly turning off shoppers,
who are required to provide credit card
information to transact. Consequentially,
AT Kearney estimates that 67% of
digital buyers in the Philippines, 62%
in Thailand, 60% in Indonesia, 55% in
Vietnam, 52% in Malaysia do not trust
giving their card information online –
compared to the global average of 49%.
While this can be overcome as
governments promote non-cash
transactions and coordinated
e-payment regulations, security
laws needs to catch up with what’s
commonplace in developed markets.
ASEAN countries are responding,
developing and enforcing security laws
and regulations for ecommerce data
protection and electronic transactions.
Singapore’s Monetary Authority of
Singapore (MAS) has, for example,
made the 2-factor authentication (2Fa)
process mandatory for any transaction,
local or overseas. The movement
towards intra-regional coordination of
shared cybersecurity, best practices,
and legislative frameworks will allay
these fears, boosting ecommerce.
Alternative Payments
E-commerce requires a healthy and
robust payments infrastructure,
together with integrated innovations,
to overcome deficiencies in a region
underserved by traditional banking. In
SEA, where well over 400 million people
are unbanked, compounded by existing
security concerns among digital buyers,
alternative payment solutions are rising
in importance, building the robustness of
the payments infrastructure. They are a
necessary option for businesses to reach
out to un-banked customers, through
new ways to complete transactions
via ATMs, online banking and over the
counter payments. Alternative payment
solutions will also play a facilitating role
in converting unbanked to banked users.
Rise in M&As
Southeast Asia is already drawing
global e-commerce players, including
Germany’s Rocket Internet, with
investments in online marketplace
Lazada along with online fashion retailer
Zalora, Japan’s Rakuten, Softbank, and
China’s Alibaba, JD.com and Tencent.
The pace of e-commerce and payment
innovation in Southeast Asia is certain
to accelerate. Rising investments are
expected over the next few months,
developing the region’s e-commerce
through investment, acquisition
and subsequent consolidation.
Advent of AEC
The word “fragmented” is used
consistently by economists,
politicians and business visionaries
alike to characterize ASEAN – not
without reason. With ten countries,
ten languages, ten currencies and
economies with varying (often too high)
levels of economic nationalism, ASEAN is
indeed made up of ten very unique parts.
Some are highly developed – Singapore,
for example, has a 2014 per capita GDP
of $60,410 (IMF), while Myanmar’s was
$1,405. Singapore presents one of the
most friendly business environments
in the world, whereas Myanmar was,
as recently as 2013, twinned with
Sudan in an article by The Economist.
For AEC to hold any meaning, even in
less erudite circles, it would need to
address the notion of piecing some of
these fragments together, by opening
up cross-border trade. And then, there’s
the bigger context – where ASEAN fits
in the broader Asia-Pacific narrative.
12. About 2C2P
2C2P (Cash and Card Payment Processor) is a leading Southeast Asian comprehensive payment services
provider, transforming millions of everyday payments across Asia. The company offers a number of services
tailored for the needs of ecommerce and mcommerce merchants, banks and financial institutions of any size.
Founder and Group CEO , 2C2P
Aung is the founder and Group CEO of 2C2P, a Southeast Asian
payment services company revolutionizing payments for financial
institutions, ecommerce and mcommerce merchants and consumers
across Southeast Asia. He hails from Myanmar, but has been based
in Singapore and Thailand for the past fifteen years.
by Aung Kyaw Moe
Love thy neighbour
ASEAN’s awakening lies not only in more
efficient and transparent intra-regional
trade, but also in doing business with its
neighbours, particularly China.
That’s the biggest challenge, and even
greater opportunity, one which is
particularly attributable to e-commerce.
China’s trade with ASEAN is estimated
at US$224.38 billion in H1 2015, up
1.6% year-on-year. More crucially, since
2010, over sixty percent of its outbound
investment has been into ASEAN, with
internet and e-commerce cited as key
areas of interest.
With better infrastructure, and with
trade efficiencies, e-commerce has the
potential to drive the 21st century’s
rendition of the Maritime Silk Road.
ASEAN’s future is bright!
012
14. Mark Taylor
Senior Journalist for
PaymentsCompliance
Mark’s regulatory coverage of the
payments industry touches on
a wide variety of subjects from
cryptocurrency, international
sanctions and anti-money
laundering laws to innovation
eventually gravitate back towards the Bitcoin blockchain once
the banks finish testing and realise they cannot possibly match
the computing power of an open, global network.
Given that Christmas has passed, let’s try a seasonal analogy.
You have picked out a wonderful gift (Bitcoin) for a small child
(the banks), something new and sparkly that you are convinced
they will enjoy as it enhances their life and that of their friends.
However upon opening it the child throws ignores the gift
completely and starts playing with the box it came inside
(blockchain). The reality is more likely somewhere in between.
Perhaps the final analogy for us is less the Internet, and
more Napster, and what that did to the music industry. The
humble file-sharing site brought major record labels and
conglomerates to their knees, completely altering how we the
consumer accessed and bought (or didn’t buy) music.
The shockwaves reverberated far beyond the tired music world,
and now a generation has matured, file-sharing and streaming
are slowly being monetised, but not without casualties (HMV
being one). There is perhaps is an element of “that could be
us” from a nervous, insular banking community traditionally
fearful of change and of new technology. Crashed cash
machines in the UK often greet bemused customers with the
sight of Windows XP re-booting, hardly a cutting edge process
or a reassuring sight (Microsoft stopped updating XP some
time ago). Are the banks looking at Bitcoin and deciding they
don’t want a Napster moment, and are buying into blockchain
without fully understanding it, or what it can do? Only time
will tell.
About PaymentsCompliance
PaymentsCompliance is part of ComplianceOnline. ComplianceOnline is the leading provider of business
intelligence for the gambling, payments and blockchain industries. We specialise in providing high
level and independent news, analysis, data, eLearning and research through our primary services
GamblingCompliance, PaymentsCompliance and BlockchainBriefing. Request your free 14-day trial at www.
014
15. ARoadmapto
omnichannel
payments
Juspal Manic is the Director of Specialist Services
function for the International Services segment
of TSYS, a leading global payments provider,
focused on enabling clients to optimise their
payments technology. Juspal has more than 14
years’ experience in the payments space and has
worked across multiple geographies in various
technology roles across the payments value chain.
Juspal Manic
Director of Specialist
Services at TSYS
International
What is omni-channel?
Put simply, Omni-channel as a concept is
a seamless experience for the customer
through a sales process or a process
in terms of making a transaction or
engagement, which could involve mobile,
web and or physical channels.
Omni-channel tries to force an
organization into having a seamless
approach. When you look at the origins of
that concept it dates back to the 2000s.
When mobile devices like smartphones
occurred a lot of retailers were in a
price war situation. At that point, certain
retailers realized that they can’t compete
for price, so what they wanted to do was
change the shopping experience. That’s
why it became more about changing the
experience of the customer and thus,
becoming customer centric. Therefore,
the increasing usage of smartphones
has driven the omni-channel approach.
Obviously you also have the rise of apps
within the smartphone ecosystem and
then you also have the fact that we’re
more connected nowadays. Overall the
customer is the focal point of omni-
channel, with the customer driving the
journey forward in terms of engagement.
It’s also about collaboration because
it forces an organization to pay more
attention to collaboration. In this context
it’s no longer just about physical stores
vs. the digitization, they have to work
together now.
To sum up, the omni-channel concept
is about the seamless integration of all
customer touch points. Looking at the
trends and where this development all
came from, the retail industry gathered
the most momentum for the omni-
channel approach over the last five
years. Since retailers had physical stores
but also digital footprints, they wanted
to merge those together.They were the
forerunners and early proponents of
this concept. After that, a lot of service
providers / IT providers came into play,
but if you think about the next evolution,
there are other industries who have
realized its potential.
For example, it’s no surprise that in
the automobile industry there is a lot
of work going on espacially in the car’s
dashboard landscape about who is
going to be the focal point in your car
(when you get in your car). You have
Google, Microsoft and Apple doing a
lot of investment in this area with the
objective of providing a single ecosystem
with your connected devices. You can
also take wearables as an example, and
now you have the health factor kicking
in. All these industries are getting
bolder in the space because they see
an opportunity to be more connected
with the customer. What is more, you
are going to see great integration of
the omni-channel concept. No longer
will you just have companies looking
at themselves. They’ll look at partners
and vendors that can contribute to make
the customer experience richer. They’ll
also seek strategic alliances with other
vendors or other channels to see if they
can integrate these even more into their
offering. That’s why the trend in retail
very likely kicked that off more than
anybody else, positioning them ahead
of the curve.
When looking at the whole value chain,
there are startups coming in that are
challenging the traditional value chain.
So you have the payments value chain
in which a lot of startup companies
are emerging. These companies want
a chunk of the pre-purchase to post-
purchase market share. Thinking about
all these value chains being disrupted
and then factoring in the influence of
social media, companies have to provide
a seamless experience because it’s
015
16. not only about the product or service
anymore.
If I had to summarize it in very simple
terms, there are a couple of things I
would focus on. There is a piece around
social media, which is going to upsurge
a challenge on the omni-channel piece.
Another piece pertains to the payments
piece. With mobile wallet and other
means of payments, the acceptance
piece is fundamental. It needs to be
secure, it has to provide high acceptance
level and you need to make sure it’s
frictionless. No more of this two factor
or three factor authentication, that
landscape will change. So when you go
to purchase, all that happens will be
so seamless that perhaps you go back
to your device, you do your biometric
and it’s done. No additional passwords
needed.
There is a non-profit organization called
Fido. It’s about fast identity online.
Effectively you’ve got a lot of the big
players involved, such as Microsoft,
Visa, and Netflix. This organisation is
trying to create a standard for online
authentication. In fact, they are trying
to establish a standard for the removal
of passwords and authentification via
additional means (devices). And then
you think about the connecting piece.
It’ll push the landscape to be a slicker
and more frictionless process.
The loyalty piece also embodies a
challenge for merchants and providers.
For me the biggest part of all of this is
with you being connected, and omni-
channel being effective in the digital
ecosystem, is about real time analytics.
That is what the game changer is. The
reason I’m saying this is if you look at
payments, the analytics is normally on
the fraud —post transactions on the use
of pre transaction in terms of the piece of
authenticating the card holder. However,
now it’s about changing the cardholder’s
behavior to make a purchase.
What kind of organizations are going to
be challenged with this? Some have a
better position to cope with this than
others. A good example is Amazon; they
are fantastic when it comes to analytics.
They have the ability to not only do real
time behavior analytics, but to push
products which they think either you
as a demographic would be interested
in, or you as a customer buying that
product would be interested in.
Today the trends in omni-channel are
around social media, agile supply chains
and frictionless payments. There is
going to be great integration of partners
and alliances, it’s always about being
connected and it’s about the analytics.
That is the front end.
If you look at back end for organizations,
they have to collaborate. The
fundamental element is collaboration.
Internal organizations are not about
bricks and mortar against the digital side
of the business. It’s one single system
now. You have to remove the barriers.
You have to work together. You can also
over-collaborate, which can have the
reverse effect so you need to get the
balance.
How is the new Internet of Things
concept influencing the way people
work with omni-channel and its
strategy development?
Whenyouthinkaboutitverysimplistically
there is a saying ‘always on and always
mobile’. That to me summarizes the IoT.
Research shows that there are about
13.4 billion connected devices around
the world today. By 2020 it’s expected
to grow to 38 billion. When thinking
about the opportunity to be always on
and always mobile it does open huge
opportunities for engagement but also
adds a huge amount of complexity. You’ll
see people coming into the game who
are not here today but you’ll also see the
traditional players evolve and change as
well.
One potential new industry, which can
utilize the IoT, is healthcare. You look at
a person walking around with a Fitbit or
you have some type of health connected
device but also the Apple Watch. All
those kind of things are collecting
data on you. The question is what the
next evolution of wearables is. At the
moment they’re still at an early stage.
Via wearables, you can now make a
transaction. With Apple Watch you can
actually make a contactless transaction
via a point-of –sale device. I think that’s
only the first part of the journey. The
next part is going to be more interesting
because you are always connected.
When you walk into a store and you have
your device enabled, you go walk past a
piece of clothing or a product, which has
a RFID or NFC connect tag on it, it will
have the ability to push an offer to you
in real time. If inventory is high and you
have a surplus on these goods and they
aren’t selling, you can put a real time
offer to that customer and if they do a
purchase, it supports the management
of your inventory management, which
can make organizations more efficient
and lean. If you are a retailer and you
can offer a price point there and then,
which is competitive, which will make
the customer react, it will likely to be
beneficial to both parties. In this way
your inventory management as well as
your supply chain also become slicker,
but the customer feels the value.
If you look at where intelligent devices
are: what will happen is that the
layers between the customers and
organization will become much thinner.
Typically, when you launch a strategy,
the marketing people of an organization
have an idea of a concept and push it
to the business guys. The business guys
then verify on the marketing campaign
or the proposed approach. It moves
across the other departments like IT,
Finance and Logistics. These guys then
become enablers in making that strategy
happen.
This has changed, and in reality, it’s no
longer only initiated by product and
marketing. It’s about product, marketing,
IT and the enabling functions that
support the business because it has to
be a collective vision not just a singular
vision. You could have the best product
in the world but (from an architecture
perspective) if you can’t support the
distribution or the channels of selling it,
it’s not going to be successful. Companies
have to be much more agile in their
approach. A lot of banks, IT providers,
IT divisions within major corporations
like retail, automobile; these guys are
enablers. But they traditionally follow
a waterfall development life cycle.
Then you have a lot of startups which
come into the industry who use agile
development so they’re able to deliver
quicker. That’s because they don’t have
the same kind robust processes in their
organization.
The traditional organizations when
they go into omni-channel and IoT, they
are going to have to be more agile. If
you don’t have the agility, and strategy
development you are going to suffer
016
17. because other people are coming to the
market much quicker than you.
The fundamental premise of the,
always on and always mobile mentality,
is that it gives organizations access
to the customer but also provides a
lot more data points. It’s important
since the strategy has to be built on
understanding your customers. The
challenge (where strategy development
becomes very difficult), is how the data
is central to your strategy development.
With the collection of data and the
huge pool you have and the investment
in data scientist it’s about making the
data relevant for you, your product and
your value chain. If you mine the wrong
data, then in fact you could move your
product or the value chain in a way
where you will be outcompeted in the
market. It’s about the data collection, its
analysis and the utilization within your
strategy development. If you can do that
and you can distribute your data to the
certain area of the business where it’s
relevant you can build a more cohesive
strategy.
What are the key challenges in the
omni-channel strategies?
You need to understand your customer
beforeyoustartthejourneytoprovidean
omni-channel approach. So you need to
look at your strategy when implementing
an omni-channel approach to make sure
it’s cross-functional, cross-channel and
cross-platform. These three things
are fundamental in an omni-channel
strategy. However, you need to ensure
that it’s also an agile strategy and it can
be executed upon. Otherwise you’re
going to be behind the market. It also
goes down to the integration of not
just your own services but third party
services.
So the market is going to a state where
companies are willing to work more with
third parties and strategic partners or
vendors. What they’re asking for is the
ease of integration. APIs or headless
APIs need to be integrated in a seamless
way by making them very non- complex,
because if they are not, the problem
is that you become very hard to work
with. Then in fact, you might loose
your opportunities because the omni-
channel concept as well as the IoT is
about connectivity. It’s about ease of
integration. Speed to market and ease
of integration are key factors as well as
the enablement of third parties. With
all these factors to take into account,
you make your own environment more
complex and that’s where collaboration
comes in.
If internally you’re not aligned to
collaborate, and externally you are
a difficult partner to work with, then
your chances of finding opportunities
to collaborate will be limited. In simple
terms, if your execution is slow and poor
you will start finding pressure within
your business, which you then have to
outsource or diversify further.
The barriers of entry in payments at
the moment is low because companies
are entering the value chain and
causing disruption easily because they
only focus on a specific element . The
question is when the regulators start to
become much more aggressive on the
end to end value chain. At the moment
it focuses on the core piece, which is
making the transaction securely and
treating the customers fairly with their
data protected.
An omni-channel strategy allows you to
manage the customer journey. However,
if you don’t manage the customer
channel, somebody else will do that for
you.
What makes omni-channel payments
special and why?
I think even if you can have the best
product or service in the world, but have
the most cumbersome and disjointed
way to make a payment, or the lack of a
seamless experience on your payment,
you won’t succeed. Customers will be
turned off and go elsewhere. That’s
the beauty; they have the choice to
go elsewhere. The element that links
the customer with all these things is
payments. That’s one of the unique
identifier. In the past customers were
unwilling to give their details. However,
if there is a benefit for them then they
are happy to give you that information.
Apple Pay has come into the market and
changed the dynamic by authenticating
using your biometric and NFC. PayPal
can be mentioned as innovators in
this context. Their strategy is to open
themselves up from an API perspective
so that they can easily integrate into
what ever the payment vehicle is.
Amazon Payments is trying the same,
moving into that space. Their advantage
is that they have a large footprint, they
possess diversity in terms of their stalls,
and they could challenge the payments
landscape when implementing payment
authentication with their own Amazon
authentication approach, i.e., just using
your Amazon credentials.
An omni-channel strategy enables you
to collect more data points than just
on the card payment / transaction.
Consequently, you will be able to control
and manage the customer journey and
experience more effectively. The reason
that payments are so valued in omni-
channel is that when considering micro
services and APIs you can now easily
integrate with partners. Hence, you
can have a better loyalty and reward
program, whereas in the past they were
separate services.
What is the future outlook for
omni-channel?
It’s about building micro services,
which are available to integrate, very
simple but at the same time secure and
reliable. Being cross-channel is also a
fundamental factor. Wearables will have
a significant impact on omni-channel
in the future too. They will get more
intelligent, more sophisticated and add
many more functions like GPS. On top
of that, many other industries will come
into the market, including automobile,
utilities and healthcare.
On the marketing side, there are the real
time analytics, which will help companies
to obtain better insight into the customer
and push more relevant products and
services based on the gathered data.
Another aspect that organizations
have to pay attention to in the future
is payments. Ease of integration will be
required, high acceptance as well as
security. The last factor I find most vital
for the future is the agility of the logistics
and the supply chain to cope with the
demand.
017
18.
19. With this infographic, we wanted to highlight a significant growth in mobile phone usage, as it
has become a conduit for payment solutions worldwide, and leading this trend are users from
emerging countries.
The top five receiving countries, for money transfer and family remittance, are China, Philippines,
Mexico, India, and Nigeria. These countries have contributed to the big impact in the market’s
numbers. Because the remittance market in the developing countries is among the most
expensive in the world, the mobile wallet industry has opted to become one of the most
advanced, with mobile phones penetration at an all-time high.
As a result of this trend, we have been able to observed a substantial growth in usage of mobile
phones, due to the growth of the mobile payment service, the actual number of mobile phone
owners, and the money spent in mobile apps and browsers.
Infographic description
About Paytoo
PAYTOO is a brand of PAYTOO Corp., a US Corporation founded in 1999. Since then,
PAYTOO has expanded its line of products and launched in 2009 the first mobile
solution to combine telecommunications and payments into one single account, the
PAYTOO Mobile Wallet™. This unique mobile wallet offers not only an alternative to a
bank account, but also a complete range of financial services such as direct deposit,
money transfer, gift cards, bill payment, cell phone top ups, prepaid and virtual
MasterCard, paying a merchant, and its two newer products, the cardless ATM and the
multi-service profit center kiosk.
019
20. Using Your
Spotlight
Think you have what it takes to start a business in
a super-hot market?
PCM takes a close look at some of the most
innovative and promising startup companies in the
payment industry.
21. Aaron Siwoku, founder & CEO, Toast
021
“IT’S NOT JUST
ABOUT SENDING
MONEY, IT’S
ABOUT BEING A
TRUE FINANCE
PLATFORM”
A
recent study shows found that
Southeast Asia has a large
inbound remittance market
that was worth US$56.8 billion
in 2014. However, there are many
inefficiencies in the remittance market.
One of those problems is the way money
is sent by overseas workers.
We speak with Aaron Siwoku, founder
and CEO of Toast, a startup using
blockchain technology to provide a fast
and cheap alternative to traditional
money senders.
Where did your idea for Toast
originate?
So, basically we started off developing a
digital currency platform, CRYPTOSIGMA.
We decided that the real problem we
are trying to solve is not making it more
easy to buy and sell but we wanted to
actually create a more efficient finance
platform. When we started thinking
about that, simultaneously we also came
across something that’s a big problem
here in Singapore and it’s replicated
in Hong Kong and numerous other
cities across the world, especially in the
United Arab Emirates. We saw domestic
helpers and migrant workers, queueing
up at Western Union to send money
and the queues would be down the
street. One thing that struck me about
this queue was that everybody had a
smartphone, with 3G data connection
and was chatting on Viber and checking
Facebook. Then I thought, there must
be an easier way to send money, rather
than queueing up and handing physical
cash over counter.
So, there is a couple of problems to solve
there. The problem that a lot of people
think is relevant is the moving of money
from one place to another - but this is
actually the easiest part of the equation.
The most difficult part of the equation is;
how do you get money from somebody
who doesn’t have a bank account? How
do you get that money into a digital
application and represent it as a digital
balance in an eWallet and do the KYC
and AML checks?
What we decided to do is to change
the name of the platform from
CRYPTOSIGMA to TOAST, because we
felt that sending money should be as
easy as it is to make a piece of toast
and we really wanted to simplify the
remittance experience. We felt that
was a great place for us to start and get
our foot in the door, but as the money
remittances’ business is not terribly
profitable, we knew that this was only
the initial problem we wanted to solve
and eventually (the aim is) to look more
like a digital Bank.
There are lots of good examples of
digital Banks in the UK and Europe but
not in Asia. So, we really felt there was an
opportunity to become a digital bank in
Asia, starting with remittance because it
is a very relevant problem that affects a
wide demographic of people that starts
with migrant workers but goes all the
way up the chain to white collar workers
and even businesses. So we thought that
we can make it efficient to send money
and make the user experience simpler.
What is your core product or service
and what makes it different?
One of the things we are planning to
launch in Q2 is Direct Bill Payment,
because the second biggest problem
after queueing up to send cash back
is the fact that when you actually get
to the front of the queue to send that
cash wherever you want to send it, often
you are sending it to a (now) estranged
fiancé, partner, husband/wife who is
looking after children. Perhaps you’ve
been away for two or three years
working as a maid in Singapore or Hong
Kong and you are now seeing somebody
else, the recipient person is also seeing
somebody else and the money that you
send actually doesn’t all make it to where
it is supposed to go.
22. A snapshot of the Toast app.
022
So, we are now in Q1, setting up Direct
Bill Payment, which means that using
TOAST in Singapore and Hong Kong a
Filipino migrant worker will be able to
do to bill payments over 390 different
providers in the Philippines - that’s
everything from government, utilities, to
insurance, healthcare, loans, education,
etc.
From there we feel going forward into
the future we can hopefully then do
advanced pay day loans, interest on
fixed deposits and then we can start to
look very much like a digital bank. So,
we just see money transfer and being
a mediator as a way to build a finance
platform that people rely on, trust, and
does the things that people want it to do.
My bank, apart from keeping my money
and allowing me to spend it on a debit
card, doesn’t really provide me with any
interesting products that I need. For
example, I want to buy iTunes credit,
pay for gaming credits, buy stock, and
that’s me and my needs and desires, but
my bank doesn’t understand me, and it
don’t make it easy to do those things
that I want to do through my bank, and
that’s a problem.
So, the platform we are building really
understands the demographic that
we are targeting. We understand that
they want to do money transfer, Direct
Bank Depositing, Bill Payment, load the
prepaid mobile phone number with
credit for a family member, they want
loans, interests on deposits, and so on.
These are the very specific modules that
we are building within TOAST so that we
end up with this model banking system,
where people can say, well, I want to do
money transfer and I want to load the
prepaid mobile number of my grandma
so we can talk together on Whatsapp.
Someone else might say, I don’t want to
do money transfer but I want to do Bill
Payments to keep the electricity on and
I want to buy gaming credits for my kids
to play games after school. This is where
we are going with it, it is not just about
sending money, its about being a finance
platform with multiple applications. Not
just a transaction processor but about
being a true finance platform. I think we
just really care about getting it right, we
care about understanding our user. To
go back to what I was saying before, my
bank does not understand me because
they cannot process and interpret the
data and say, why are you moving money
to a competitor bank? What can we do
better, to keep you as a customer?
Banks have got into quite a funny place
where they actually spend more money
on user acquisition and very little
money on existing users and if you are
going to keep existing users, you have
to understand that it is a relationship.
Your relationship with your users or
customers is the same as a relationship
with boyfriend, girlfriend, or a brother
or sister. If you do not understand that
person and you cannot communicate
with them (it can quickly) result in a
relationship breakdown. The reason
I think TOAST is so special is because
we put a great deal of emphasis on
understanding our users, we speak to
them, we ask them “what do you want?”.
We try to look at the things that are
happening, the way they are interacting
with the platform, the way the money is
moving toward what is popular, and (also
what is not so) popular. If its not popular,
lets remove that module. If there is
something that people require, lets
figure out how we can build that module
into the platform to continue forward
with this modular based banking system
that I envision where people can pick
and choose what products they want
to use and what’s most very relevant.
So, I think its just the fact that we are
looking at the data, we care about what
the date is telling us, and through this
we are really listening to our customers.
Because of this, we care not so much
about acquiring a ton of new users but
we care about serving the existing ones
23. Aaron Siwoku (left) at the FinTech Innovation Forum 2015.
023
we have very, very well and making the
platform very relevant for those people.
What kind of year do you foresee for
your company and the industry as a
whole?
I think there are a lot of people coming
into the payments space now - it’s a
crowded space, FinTech is popular,
Remittance is popular. There are lots
of people out there pitching remittance
ideas; remittance companies, and digital
remittance companies. However, the
majority of them aren’t licensed, they
are just pitching an idea, and there is a
big difference between pitching an idea
and actually having licenses and then
having more licenses in progress and
application.
Ontopofthat,therearesomecompanies
out there that have licenses but they do
not have the right product or the right
systems. It is a complicated business,
once you have the license you have to
actually be able to move the money,
you have to in detail understand how
to move the money, you have to have
the systems in place to track that money,
to do the transaction monitoring and
reporting, you have to be able to do
AML and CFT cross checks. I think what is
going to happen is as a lot of these other
startups that are in this space don’t get
licensed and as we continue to acquire
licenses (we just acquired our license
in Hong Kong, we are in the process
of acquiring our license in Singapore,
we just started our application for our
license in the UK, for example), some of
the larger companies, (e.g.) Transferwise,
Azimo, maybe some of the banks are
going to start to pay attention and they
are going to look at us in more detail.
I would imagine over the next two years
we will be an interesting acquisition
target for some of these bigger players,
but acquisition is not what we are looking
for. We want to build this platform, and
it doesn’t make sense for us to work
so hard on this product simply to be
acquired a year or two later. I think this
is something that might make sense in 5
or 6 years but we have got a lot of work
to do. So, I envisioned over the next 5
years a lot of very hard work, a lot of
growth on the platform and I think you
will see a lot of innovation in terms of
these products that we develop and how
relevant they are to our demographic.
We are building a pre-eminent finance
platform for Filipinos.
What are the key hurdles for growing
your business in the coming years?
The big growth barriers for us of course
are around regulation and licensing
because we are dealing with money. I
think for us, our growth and becoming
popular as a platform will just be based
around the fact that we are deploying
a great product, its easy to use, its
intuitive, the user interface is very slick
and there is a demand for a product
like this. It is very difficult to move
money. Speaking to many people they
expressed their frustration whether
doing it at WesternUnion or via an online
banking system. I have a desk full of
banking tokens and it’s a nightmare. I
think for somebody like us to come in
and to remove a lot of friction from that
process, to have the licensing and to
have the systems in place to move the
money efficiently and safely gives us a lot
of room to grow in this space.
All in all, I think that growth comes
through solving (popular problems).
Growth is then a natural result of
solving a problem that is long overdue
to be solved and that’s what we have to
focus on. We do not need to get carried
away with ourselves, thinking about how
much we are going to spend on user
acquisition or what kind of TV campaigns
we are going to have. No, I think we just
have to continue to build a product that
people want in their hand and solves the
problem which is sending money from
A to B – which currently is a nightmare!
Any recent exciting news you would
like to share with the payments
community?
Pretty much just the fact that we
are going to be launching some new
products in Q2, to expand on this
modular based banking system that
we are building. That will enable Bill
Payments and to load prepaid mobile
phone in the Philippines, directly from
your TOAST app or directly from the web
interface.
24. 024
Hot Jobs
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25. Events
025
This event will examine why the
importance of a good strategy
has never been more significant,
especially with the large increase
in new market players competing
with the traditional banks. The
conference will also discuss the
future of real-time payments
and possible risks banks need to
consider.
Nordic MCP 2016 will feature 8
keynote presentations, 2 interesting
tracks, 600 minutes of networking.
After years of doubt whether
mobile payments will take off,
now we believe this argument is
finished. Nordic MCP will focus its
attention on what this means for
retailers, what are the true benefits
and what are the changes in
consumer behaviour as a result.
Date: Jan 27-28, 2016 | Stockholm
Date: Jan. 25-26, 2016 | Copenhagen
The conference will cover numerous
topics such as ‘Innovation and
Emerging Technology in Retail
Banking’, ‘Understanding your
Customer: Why it’s not an option’
and ‘Challenges in moving from
a product-centric to a customer-
centric organisation’. Delegates will
have the opportunity to network
with professionals from industry
leading organisations.
Date: Jan. 27-29, 2015 | Kuala Lumpur
The event brings together over
700 global public transport
executives, government officials
and service providers - all looking
to kick-start their year with the
latest technologies, research and
knowledge, while networking with
clients and valuable new contacts.
Use promotional code “PCN20” to
claim 20% discount on ticket price.
Date: Jan. 26-28, 2016 | London
26. Youhave any suggestions or ideas for the
next issue of our PCM eMagazine?
Get in touch today and maybe you will
be featured in the next edition:
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