Payments - the battleground of finance?

By : Nav Kullar

January 11, 2018 01:00 PM

The past decade or so has brought unprecedented evolution and competition growth in the payments landscape. Brands and transaction methods unknown just a decade ago like Apple Pay and contactless cards are becoming commonplace in many regions.


What this means is that consumers have more choice - and therefore higher expectations of their providers - than ever before. Established financial institutions must be prepared to invest in meeting their customers' demands in the payments space, particularly as the consequences of PSD2 and open banking are more keenly felt across the industry.


According to the CEO of one of the world's biggest banks, payments is fast becoming the "battleground of finance".


Keeping up with change and competition
mobile payment options becoming increasingly established in some key markets and new transaction methods constantly in development, banks are well aware that they have a fight on their hands to maintain a satisfactory share of the payments market.


Jes Staley, CEO of Barclays, emphasized this point during a panel discussion at the annual meeting of the Institute of International Finance in Washington. He said there are some "tectonic shifts" underway, partly as a result of technological and geopolitical trends.


"All the banks are very focused on the payments space," said Mr Staley. "That may be where the battleground of finance is fought over the next 15 years."


One of the key competitors in this ongoing battle is Apple Pay, with the US tech giant leveraging the global popularity and presence of the iPhone to make inroads into the payments space.


Jennifer Bailey, vice-president of Apple Pay, said merchants and others that have partnered with the service report that Apple Pay now accounts for 90 percent of all mobile contactless transactions in markets where it is available.


"Apple Pay is the future of everyday spend," she said at the recent Money 20/20 conference in Las Vegas.


It has also been revealed that there are plans to launch Apple Pay in India, which could mark a major milestone in its global expansion.


Overcoming obstacles
As the payments industry continues to expand and diversify, there will be new questions to answer and challenges to overcome, particularly with regards to regulation, data privacy and 


Taking PSD2 as an example, the new rules will give third parties greater access to customer account information to complete transactions, but there must be adequate protections in place to ensure that data is kept safe and properly managed.


Citing cybersecurity as a primary concern for financial institutions, Mr Staley argued that consistent growth in the number of competitors in the payments space means regulators will have to "extend their reach".


He noted: "A customer can come into Barclays and require us to download every piece of financial information for the last three years, and the issue is, 'Who is this being downloaded to?' The regulators have woken up. They are increasingly going to have to be governing who gets access to that data."


Regulatory compliance and stronger cybersecurity standards could prove to be two of the guiding principles for firms of all sizes as the payments industry continues to grow and evolve. It will be those businesses that have taken the earliest action to prepare for these challenges that will be the best-placed for success.

Nav Kullar

Payments Marketing Manager

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Nav is a marketing manager for Payments at NCR and is based in the UK. She is responsible for the marketing of NCR Payment solutions, with a specific focus on the transaction processing platform Authentic. Nav has over 15 years of experience in the payments business with previous marketing roles at Visa and Elavon.