Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Challenges and Opportunities in PayTech
Proprietary & Confidential 2014-15
• Anand Ramakrishnan, President and CEO
• Debor...
OPUS CONSULTING SOLUTIONS − A SNAPSHOT
• A retail payments industry focused consulting company headquartered in Chicago
• ...
• The FinTech sector is dominated by PayTech, which promises to change the industry
• Both PayTech and traditional industr...
Agenda
• Executive Summary
 Overview
– Regional Landscape for PayTech
– SWOT Analysis
• PayTech Landscape
• Effects of Pa...
The FinTech sector has grown by leaps and bounds,
record funding in 2015 of more than $20B globally, up
65% from 2014
5
NA...
Agenda
• Executive Summary
• Overview
 PayTech Landscape
– Invisible Payments
– Modern Faster Payment Rails
– Financial I...
PayTech landscape encompasses frictionless
“invisible” payments, financial inclusion, modern
rails, risk and FinTech banks...
Frictionless “invisible” payments streamline the
consumer experience, transforming payments to
digital
In-app payments • m...
Likely the most visible PayTech segment, mPOS solutions
disrupt traditional POS solutions across all retail segments
• The...
Domestic and international person-to-person and
prepaid innovations promise to serve underserved and
white spaces, or disr...
Reimagining a payments system from the ground up
results in real-time secure payments with dramatic
improvements in operat...
Finally, a proliferation of innovations around identify,
fraud and credit risk shows potential for a safer
payments system...
As traditional banks become more risk averse, a
number of pure play FinTech banks provide access for
PayTech start-ups int...
Agenda
• Executive Summary
• Overview
• PayTech Landscape
 Effects of PayTech on Financial Services Industry
The PayTech revolution will reshape our industry by
cutting costs, improving quality, and innovating
around risks
15
Never...
INDIA OPERATIONS: PUNE AND CHENNAI CORPORATE HQ: CHICAGO
THANK YOU
Upcoming SlideShare
Loading in …5
×

PayTech Trends 2016

1,071 views

Published on

Opus Consulting presentation at the PeachPay event hosted by the Federal Reserve Bank of Atlanta, Jun 14 (2016)

Published in: Technology
  • How we discovered the real reason nice guys don't get laid, and a simple "fix" that allows you to gain the upper hand with a girl... without changing your personality or pretending to be someone you're not. learn more... ◆◆◆ http://scamcb.com/unlockher/pdf
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Earn $90/day Working Online. You won't get rich, but it is going to make you some money! ●●● https://tinyurl.com/y4urott2
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • ➤➤ How Long Does She Want You to Last? Here's the link to the FREE report ●●● http://ishbv.com/rockhardx/pdf
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

PayTech Trends 2016

  1. 1. Challenges and Opportunities in PayTech Proprietary & Confidential 2014-15 • Anand Ramakrishnan, President and CEO • Deborah Baxley, Practice Leader, Domain Specialist Federal Reserve Bank of Atlanta / PeachPay June 14, 2016
  2. 2. OPUS CONSULTING SOLUTIONS − A SNAPSHOT • A retail payments industry focused consulting company headquartered in Chicago • US Locations - Atlanta, SFO, New York, Houston, Austin ; India Development Centers – Pune and Chennai • Established in 1997, currently 800 consultants strong • Divested Card Issuing and Acquiring Product “ ElectraCard” in 2014 to Mastercard to focus on Services Marquee Client List Cards – Issuing, Acquiring and Prepaid Remittance Industries we serve FinTech Our Services Advisory Digital Data & Analytics Testing Product Development Payment Devices • One of the top payments network in the US market • Leading provider of fully integrated ATM and financial kiosk products and services • Leading remittance company • Top 5 acquirer in the US market ……and many more
  3. 3. • The FinTech sector is dominated by PayTech, which promises to change the industry • Both PayTech and traditional industry face challenges in cooperation, regulation and innovation • The PayTech landscape comprises invisible payments, financial inclusion, modern payment rails, risk and FinTech banks – Frictionless payments transform the customer experience, while mPOS disrupts traditional POS solutions across all retail segments – P2P and prepaid innovations serve underserved, high-fee markets and white spaces – New payment rails are faster, with much lower operational costs – Space aged innovations around identity, fraud and risk secure the payments system – Pure play FinTech banks provide access to the financial service ecosystem • Industry transformation provides hidden opportunities for payment providers PayTech leads the FinTech revolution, posing threats and opportunities in mobile, P2P, faster payments and risk management PayTech Overview
  4. 4. Agenda • Executive Summary  Overview – Regional Landscape for PayTech – SWOT Analysis • PayTech Landscape • Effects of PayTech on Financial Services Industry
  5. 5. The FinTech sector has grown by leaps and bounds, record funding in 2015 of more than $20B globally, up 65% from 2014 5 NA Silicon Valley, LA, NYC EU London, Amsterdam, Stockholm APAC China, India, Australia, Singapore MEA So. Africa, Kenya FinTech Hubs $2.5 $2.9 $4.0 $12.3 $20.3 2011 2012 2013 2014 2015 Annual Global FinTech Financing $B 298 398 492 593 679 470 624 771 957 1191 2011 2012 2013 2014 2015 Annual Global FinTech Financing # deals VC-backed PayTech & FI SWOT FIs PayTech Strengths • High barriers to entry • Consumer/ millennial vs profit focus Weaknesses • Regulation thwarts innovation • Investment in legacy • Complexity of compliance Opportunities • Partnering/ acquisition • Frictionless payments • Underbanked + smart phones Threats • Disintermed- iation • Funding bubble Commerce start-ups always underestimate the complexity and challenges of payments Ca Aus NY Af UK Neth Nord China Ind Sing Ken So Af NA AP Brz Germ 12 PayTech “Unicorns” Regional FinTech financing, 2015 est
  6. 6. Agenda • Executive Summary • Overview  PayTech Landscape – Invisible Payments – Modern Faster Payment Rails – Financial Inclusion – Risk – FinTech Banks • Effects of PayTech on Financial Services Industry
  7. 7. PayTech landscape encompasses frictionless “invisible” payments, financial inclusion, modern rails, risk and FinTech banks PayTech Landscape 7 Invisible payments Modern payment rails Financial inclusion RiskFinTech banks
  8. 8. Frictionless “invisible” payments streamline the consumer experience, transforming payments to digital In-app payments • mCommerce in-app payments ease checkout and eliminate friction • Amazon, AliPay and PayPal leveraging their substantial presence to expand into in-app • Adyen global payment rails 250 payment methods 187 currencies incl. phone bill, bar coded cards, supporting AirBnB • Klarna offer M-commerce one-click checkout for apps like Uber, assumes payment risk for delivery use cases • Paytm is India’s largest mobile commerce platform Mobile wallet • ApplePay, AndroidPay & SamsungPay realize the security & convenience promise of NFC technology • Merchant issued wallets such as Starbucks & Dunkin Donuts integrate loyalty and couponing • Wallaby recommends which card to use to optimize reward points APIs • Open issuer processing payments APIs let developers integrate payments within their website or apps • Users sign up within applications, get instant approval, merchants process transaction IoT • “TOS” operate on smart TVs & smartwatches, & enables mobile payments • Brillo for low-power IoT devices like lightbulbs & cameras • Visa prototyping “connected car” to pay for fuel, parking, drive-through, tolls Invisible Payments 8Frequent payments are moving from cash, to contactless, to invisible
  9. 9. Likely the most visible PayTech segment, mPOS solutions disrupt traditional POS solutions across all retail segments • The original mPOS innovator, started as simple audio-jack mag stripe dongle, now accepts chip cards • Underlying innovation was how to price and manage micro-merchant risk • Aggressive expansion into wallets, SMB lending, marketing, payroll • Developer-friendly payment point of sale that accepts everything contactless mobile wallets, magstripe & chip-based cards, featuring 2 touchscreens – 1 each merchant and customer facing • 2-screens, all payment forms, integrates with existing payment systems for larger merchants • Makes money on subscription software business $49/month/register & interchange plus pricing • Cloud-based multi-channel commerce for SMBs, linking accounts with card acceptance • Sophisticated analytics & web site management, partnering with Uber on same-day delivery • Pay-at-table tablet technology dramatically reduces wait time, optimizes server trips to table, and offers bill-splitting and biometric authentication features • 2-screen tablet POS system with wide array of features including deliveries and shipping in addition to payment processing • Integrates with beacons to recognize customers • Recently introduced new readers ranging from free to $124 • Bluetooth, wired, NFC, faster, etc. 9 Invisible Payments  mPOS mPOS players in the US are leveraging the EMV shift to get merchants to swap out legacy POS
  10. 10. Domestic and international person-to-person and prepaid innovations promise to serve underserved and white spaces, or disrupt high-fee markets P2P • Payment messaging service M-Pesa >13m users 40% of Kenyans, 42% GDP, no need for bank accounts • Venmo, wildly popular with millennials, P2P app used to split bar tabs & bills, sending $1b/mo • Telepin software powers most of the world’s mobile money deployments in emerging markets Social • Facebook Messenger allows users to send money between debit cards right inside the chat • Fastacash sends international transfers among social networks e.g. Facebook, WhatsApp or WeChat • Wildly popular in China, WeChat allows 639m active users to send money or gifts over chat Remittances • Transferwise sends money with no currency conversion charges, 8X cheaper vs banks, supporting 300 currency corridors, avoiding actual transfers by netting in each market • Currency Cloud allows any company to offer customers access to foreign exchange through a simple API • Xoom allows transfers to 50 countries with delivery options including cash, bill payment • Remitly is the US largest digital transfer business charging a fraction of fees compared to legacy providers • Payoneer provides cross-border transfers, online payments, and reloadable MasterCard Prepaid • Aims to replace check-cashing services and checking accounts, wants to be where bank branches are not as prevalent • Prepaid debit card and mobile banking service empowering young people to manage their money responsibly by instilling good financial habits from an early age Financial Inclusion 10
  11. 11. Reimagining a payments system from the ground up results in real-time secure payments with dramatic improvements in operational cost Faster Payments • Dwolla is an instant payment network based on FiSync, a communication and interoperability protocol for banks and credit unions • Zapp offers real-time payments on mobile phones in the UK Blockchain • Align Commerce uses blockchain technology to enable international transfers • Ripple connects banks on a permissioned network to leverage distributed ledger technology for bank-to-bank transfers • Coinbase is a secure online bitcoin exchange for buying, selling, sending, receiving, and storing bitcoin • Bitcoin exchange and wallet service Coins.ph for Filipino transfers including ATM cash payout option Cryptography • Instant payment network secured by cryptography Global Interoperability • Earthport is a global hub & spoke payments network that interoperates with any payment format, reducing time/cost of international transfers and providing tracking • Transpay’s API connection lets businesses perform straight-through mass payouts in 120 countries Modern Payment Rails 11These modern payment rails threaten traditional payment networks over the long-term
  12. 12. Finally, a proliferation of innovations around identify, fraud and credit risk shows potential for a safer payments system Authentication • Socure uses machine learning, biometrics plus big data to verify identify • IdentityMind risk platform provides fraud prevention, Know Your Customer (KYC), & payments to assist online merchants & FIs • Trunomi software for financial institutions to comply with know your customer (KYC) regulations • Nok Nok provides strong FIDO-compliant authentication using PKI cryptography • SayPay authenticates customers using voice recognition • Biocatch authenticates users via touch and phone’s accelerometer Fraud • Feedzai & Signifyd leverage big data from non-traditional sources to instantaneously detect & address fraudulent transactions • Iovation and InAuth prevents fraud through device fingerprinting and pattern recognition • DataVisor detects global fraudulent attack campaigns in real time before they result in any damage Instant Credit • Parameters covering credit score, social media data, merchant data and others • Appeals to millennials who shun credit cards, and countries with low card penetration like India or Germany Risk 12
  13. 13. As traditional banks become more risk averse, a number of pure play FinTech banks provide access for PayTech start-ups into the financial services ecosystem White Label Banking • The Bancorp Bank offers “Banking as a Service,” supporting Simple all-digital checking account designed for mobile plus first-rate mobile banking tools Banks Powering PayTech • CBW plus its technology arm, Yantra, aims to reinvent banking and it is the bank powering “Moven” • Varo Money is a mobile-only banking app that offers financial advice, with the unusual stated intention of seeking a banking license • FINO Paytech is Indian financial inclusion bank using biometric & smart card technology for micro customers especially in rural areas, now classified as a new “payments bank” by RBI FinTech Banks 13
  14. 14. Agenda • Executive Summary • Overview • PayTech Landscape  Effects of PayTech on Financial Services Industry
  15. 15. The PayTech revolution will reshape our industry by cutting costs, improving quality, and innovating around risks 15 Never mind if PayTech fails to take over the world, its emergence is changing the face of payments How will PayTech impact traditional players? Consolidation: In-app payments push transactions to “lodged” card, whose wallet share increases - differentiators like card brand & design decline Potential Scenarios: Fragmentation: Digital wallets displace physical cards & optimize card usage, proliferating niche / merchant issued cards, splintering wallet share Displacement: Customers elect POS financing, credit card usage erodes as transactional users migrate to payment seamlessly linked to bank accounts Venture capital investment • Santander, HSBC, Sberbank, BBVA Ventures Accelerator programs • ATDC, FinTech Innovation Lab, Barclays, Citi Ventures Plug and Play FinTech Program, Level39, Westpac Innovation Challenge Collaboration • UBS Blockchain Innovation Lab, BNY Mellon MyIdea, RBS, Bank Leumi, ING FinTech Village Consortium • R3 Acquisition • First Data & Clover, PayPal & Paydiant, Xoom FI and Processor Responses
  16. 16. INDIA OPERATIONS: PUNE AND CHENNAI CORPORATE HQ: CHICAGO THANK YOU

×