The first conclusion, shared by the executives and managers of the means of payment interviewed, is that even today nothing is written about the success of the new payment solutions. Each country has a context and a culture that are key to determining which innovation will have traction to universalize, and which will not. It also coincides with the view that it is probable that at least one of the successful solutions “comes from outside”, as a solution of global reach or, on the contrary, of local origin but with a clear spirit of territorial expansion and that has already demonstrated its ability to generate radical changes in adoption and payment habits in other latitudes, such as in China.
The second conclusion is that, in this context, the changes already perceived in the status quo of the payment industry, which has also proved to be the gateway to other financial services verticals traditionally provided by banks, are not yet perceived by customers, because nobody has explained them or helped them understand. This task of dissemination is still a pending issue for an increasingly busy sector, but especially for banks that already have established relationships with clients who obviously do not wish to share, but who also do not “prepare” for them to be able to distinguish between agents who, although they are not identical, are similar to their non-expert eyes. Financial education continues to be an insufficiently attended task, and it can not be conceived today in a dissociated way from digital education.
In addition, the new attribute of the portability of payment accounts – already experienced by other industries such as communications – can facilitate the disconnection of dissatisfied customers if they do not perceive substantive differences in the value and quality of the services offered by some (banks).
And others (fintech, bigtech), some of which are very important: trust in the care and protection of sensitive data, the ease, and convenience of use. In other words, the user experience, for whose upgrade many market agents are incorporating artificial intelligence solutions, starting with chatbots and secure authentication mechanisms, biometrics.
An additional point (of the writer) is to analyze if there is a reasonable balance between the ease and convenience of digital onboarding and the opposite action, offboarding or, without reaching a total disconnection, the use of a mechanism for claims and conflict resolution equally digital.
The brief recourse to the facility of financing of credit cards
Scaling the financing function on the payment function as a way to improve profitability remains a challenge in Spain, where credit information systems or bureaus normatively maintain an exclusive focus on negative information. Does PSD2 enable alternative ways to build a credit scoring based on the payment behavior of the IBANs, or the basic payment accounts?
Good for basic payment accounts
Very good for the approval of RDL 19/2017, of November 24, of basic payment accounts, transfer of accounts and comparability of commissions. The basic payment accounts are those designed to encourage the discouraged to hire at an affordable price a bank account that allows a large number and type of transactions, at least those necessary to meet the daily payments of families in Spain.
Paying is an everyday act that we can do comfortably and safely, making use of digital channels, or physical and face-to-face, analog. That paying digital is an option accessible to all, as is cash.
The challenge of supervision
From the perspective of the financial authorities, very dedicated in recent months to the regulation function, the challenges today are focused on the exercise of the supervisory function, for which new skills and abilities are needed, new deadlines, new rhythms, tools, and profiles.
And balance the positions of the binomial “safe ecosystem vs easy ecosystem”, which can constitute a real trade-off for the system, with new risks of draft such as cybersecurity.
Cash is still king
While, nevertheless, the demand and adoption by the public of the new payment solutions continue without advancing at the expected pace, far from being accompanied by a rampant offer in which the fintech of payments are occupying more space day by day.
We do not know how much because there is no prepaid public data or electronic money. Example of this slow adoption, not to call it backward, is the new claim that digital native services have recently announced in Spain: “cash payment is accepted”.
The Barometer that opens the eighth edition of the Minsait Report yields very interesting results related to innovation trends in the sector.
The difficulty of identifying proficiently trained Big Data and Data Analytics profiles in the market, recognized by 8 out of 10, may be slowing down the pace of investments and developments, considered mostly strategic ones.
It will be a reality, no one doubts. The rapidity in which the widespread adoption of this standard takes place does accept a greater diversity of responses depending on the country in which we are located.
About blockchain: it will only marginally or partially change the current means of payment schemes in the coming years, according to 93% of the responses, so that a blockchain revolution in payments is not anticipated in the coming years, especially in the retail dimension.
The market research this year asks individuals in their status as banked Internet users, as it is a segment of growing relevance to which many of the innovations in payments are directed.
The analysis from the perspective of the demand allows addressing recognized issues such as current challenges in the sector such as knowledge and adoption of new payment methods, knowledge of fintech or the perception of security of transactions in relation to the protection of sensitive data, and the disposition to its assignment.
It also allows deepening on the online purchase, the most used payment methods in that channel and the degree of trust they provide.
And like every year, the market study investigates the obstacles that condition the speed of adoption of digital payment among the population, including the financing of card purchases.
Everything indicates that we are on the way to a new paradigm of Open Banking, driven by regulation and technological innovation. The Open Banking will mean that the new normal is the aggregation of information and portability, value-generating attributes whose impact capacity is directly proportional to the number of information sources susceptible to aggregation and inverse to the loyalty to the financial services provider.
Under this premise the Spanish banks have a stable relationship with their main bank (14.5 years), much higher than that registered in Latin American countries, and operate with 1.6 banks on average, a figure also lower than that declared by the population of reference in Latin America.
Also published on Medium.