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Payment trend scouting - Kurt Schmid, Netcetera

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Payment trend scouting

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Payment trend scouting - Kurt Schmid, Netcetera

  1. 1. Kurt Schmid, MD Digital Payments @ Netcetera Payment Trend Scouting «Payspektiven»
  2. 2. Trends we have seen so far Success of contactless card based payments • Despite media criticism on security and data privacy a few years ago • Germany still lagging behind compared to other countries 2 2018 data
  3. 3. Trends we have seen so far 3  Success of Mobile Payments / Wallets (e.g. Apple Pay)
  4. 4. Trends we have seen so far Use of biometrics for authentication into / within banking apps Open interfaces to banking to comply to PSD2 via Berlin Group et al API • All banks expose services • Some banks consume services to offer view over all bank accounts 4
  5. 5. Trends we have seen so far Online payments increasing Merchants app with payment included Better UX and trends for invisible payments (Uber, FreeNow…) 5
  6. 6. State of PSD2 SCA 6
  7. 7. Ideas and topics without breakthroughs Blockchain for standard payments, Asset Tokens, DLT Payment with Wearables (Cloth, Rings….) IoT Payments Walk out in-store payments (like Amazon Go) Access to Account (Statista: In a 2019 survey in the United States, 42 percent of respondents were not aware that some apps used third parties to access users' bank account information, while 19 percent knew that some apps worked like this and 38 percent responded that they were somewhat aware of it. ) 7
  8. 8. Banking in Germany where to go? 8 Geschätzt: 300 Banken in 2030
  9. 9. Fintechs as challengers: Perception of threat (Source: Cap Gemini World Payments Report 2019) 9
  10. 10. Fintechs as challengers: Actual status 10 Source: CAPCO DIGITAL SWITZERLAND
  11. 11. The play of the GAFAs (and BATs) 11
  12. 12. Bigtechs as real threat 12
  13. 13. Readiness 13
  14. 14. How much to invest? 14
  15. 15. Where to go? 15
  16. 16. Clustering Payments Trends 16 Examples: European Scheme Examples: Tokenization Examples: In App Payments New Checkout standard: SRC Trends Card related ID&V, KYC related Technology related UX & Functional Ecosystem related Account related
  17. 17. Trend: European (card) scheme 17
  18. 18. Initiatives 18 CPACE (ECPC) EMPSA EPI (PEPSI)X PAY #DKHIPPOS
  19. 19. Technology trend: tokenization 19
  20. 20. Token Requestors Tokenization now also for merchants 20 Token Service Provider OEM Wallets IoT Card Issuer IssuerWallets Merchants new
  21. 21. First results ~ 6% increase in approval rates communicated by two schemes Approval rate tokens vs. PAN at benchmarked samples Approval rates vary by country, merchant and issuer *Scheme 1: sample of over 50,000 transactions across participating online merchants during 2019, compared to overall ecommerce transactions during the same period 2018. *Scheme 2: Authorization rate lift from decline codes within a sample of 17 merchants. 4 - 9% increased approval rate in randomized comparison between token to PAN-based authorizations at a global PSP (Sept. 2019) PAN TOKEN ~ 6% Increase T
  22. 22. UX and functional trends 22
  23. 23. EMV® Secure Remote Commerce: Key points of EMV SRC framework Future standard to make card based e-commerce checkouts more seamless and secure Pay securely via single, consistent SRC checkout button Scheme neutral (EMVCo) successor of Masterpass & Visa Checkout to help interoperability
  24. 24. EMV® Secure Remote Commerce framework Secure Remote Commerce 24  SRC shall be the future standard to help card based e-Commerce checkouts to be seamless and secure  Will be scheme-neutral (EMVCo) successor of MasterPass & Visa Checkout  Targeting guest checkout situation by avoiding entering card data again and again by device and user recognition
  25. 25. What it looks like: See it live in the US SRC button
  26. 26. What it looks like: Already live in the US 26 SRC Button
  27. 27. SRC User Experience #1 27 First time enrollment Identified user
  28. 28. SRC User Experience #2 28 automatic device and user recognition
  29. 29. Push Provisioning (from issuer app to merchant apps) 29
  30. 30. Checkout today 30 Merchant app Issuer app (3DS) Merchant app
  31. 31. Checkout tomorrow (based on delegated authentication) 31 Merchant app
  32. 32. Ecosystem 32
  33. 33. Stages in ecosystem journey of banks 33Source: World Payments Report 2019
  34. 34. The German situation 34 Many players and bodies in Germany Moderate speed, conservative towards innovation Defending where the battle is already lost? Source: World Payments Report 2019
  35. 35. Workshop invitation Brainstorming on Payspektiven (trends) Assign trends into big picture Select top three trends Asses these three trends: Why, why not? 35
  36. 36. Europaplatz4 4020Linz Austria kurt.schmid@netcetera.com +43664 11211 00 Kurt Schmid Managing Director Digital Payment Kurt.Schmid@netcetera.com https://www.linkedin.com/in/kuschmid/

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