Is Your Wallet Ready for 2020?

By Alyssa Arredondo, Entrust Datacard

From bartering goods to the gold-backed dollar, history has seen payment methods come and go on more than one occasion. Over the past few years, yet another chapter has emerged within the evolution of payments. The launch of Apple Pay in 2014, followed by Android and Samsung Pay just a year later, has sparked a rapid shift toward mobile. Global mobile wallet spend is expected to rise nearly 32 percent to $1.35 trillion this year alone, according to a Juniper Research study.

It’s safe to say mobile is just getting started. By 2020, Visa predicts consumers will primarily rely on mobile payments for buying goods and services, sending money and conducting business. While mobile is sure to grab headlines throughout the next three years, it won’t be the only way consumers pay during checkout.

Physical cards will still have a place in our wallets—they may just have a more personalized, luxurious feel. Take, for example, Chase’s Sapphire Preferred credit card. Overwhelming demand for the metal credit card following its release last summer is representative of a larger payments industry trend centered around customization. Rather than dishing out generic credit or debit cards, banks and retailers are inviting consumers to create highly personalized cards that not only meet their unique needs, but also serve as physical complements to the mobile wallet experience.

Among the payment industry’s most common personalization features are custom labels. Banks and retailers have the opportunity to enhance the consumer experience by printing full-color, edge-to-edge images, text and graphics on almost any credit or debit card out there. Targeted information and high resolution visuals can now be included on credit and debit cards, thereby giving consumers an up close and personal look at current marketing campaigns. Perhaps even more importantly, financial card issuers and government agencies can use such labels to draw consumer attention toward products, solutions or services that are relevant to their specific demographic.

In addition to custom labels, QR codes are also bringing personalization to the payments industry. By simply snapping a picture of their own unique QR code, users can securely and automatically generate transaction data. This extra convenience will go a long way toward speeding up the checkout process for consumers in a hurry.

Mobile is taking the payments industry by storm—and for good reason. Quick and easy to use, mobile offers convenience few other payment methods can. Although much will be made about mobile payments now and in the future, banks and retailers should remain conscious of the fact that physical cards aren’t going away anytime soon. From custom labels to QR codes, taking steps to incorporate personalization will enable banks and retailers to accommodate both mobile wallets and physical cards for years to come.

Alyssa Arredondo is the director of financial vertical marketing at Entrust Datacard. She has more than 12 years of experience in the financial services industry with expertise in credit card account acquisition, portfolio management, lifecycle marketing and loyalty marketing and analytics. Before joining Entrust Datacard, Alyssa held marketing roles at U.S. Bank and HSBC Card Services.

In Viewpoints, payments technology professionals share their perspectives on the industry. Paybefore presents many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.

Mobile Contactless Hits £370 Million in U.K. in H1 2017

Mobile contactless transactions in the U.K. topped £370 million (US$476 million) in the first six months of 2017, a whopping 336 percent year-on-year increase, according to the latest transaction data from payments processor Worldpay.

Although the use of mobile devices to make in-store payments has been growing steadily since the U.K. launch of Apple Pay in 2015, Worldpay says it’s really in the past 12 months that the technology has begun to take off beyond “early adopters.” The launch of Android Pay in 2016 and Samsung Pay earlier this year has helped boost takeup.

“Mobile spending has shaken off the novelty tag, and is breaking its own spending records virtually every month,” says James Frost, U.K. CMO, Worldpay. “Granted there’s still some way to go before we start cutting up our cards and chucking away our wallets, but it’s easy to see why everyone from startups to tech giants is eager to have a stake in the technology.”

Monthly spending on mobile devices has risen by 57 percent in the past six months to £74 million (US$95.2 million), while mobile’s share overall in-store transactions has risen from 1.18 percent at the end of 2016 to 2.04 percent in June 2017.

Spending on all forms of contactless systems now accounts for 38 percent of all noncash transactions in the U.K. Total contactless spend in 2017 reached £9 billion (US$11.6 billion) up to June, compared with £10 billion (US$12.8 billion) throughout the whole of 2016.

Supermarkets and grocery stores continue to dominate the mobile tap-and-pay market, accounting for 55 percent of total spend so far in 2017. Londoners still spend the most on their mobiles, but the proportion of transactions concentrated around the capital has dropped from 32 percent at the end of 2016, to 28 percent in 2017, as adoption becomes more widespread across the U.K.

London-based Worldpay announced on Aug. 9 that it has agreed to a $10.4 billion merger with Vantiv. The combined company will operate under the name Worldpay.

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PIF Welcomes GPS

The Prepaid International Forum has added another member to its roster, following eMerchantPay earlier this month. Global Processing Services (GPS), whose managing director Suresh Vaghjiani is an Industry Achievement Award recipient in the 2017 Pay Awards, also has joined the nonprofit trade group.

GPS, which is the largest prepaid processor for Mastercard in Europe, also won three other 2017 Pay Awards for Best Design, Best Benefits Delivery and Gift Card Innovation. The company operates in more than 60 countries and supports many startups, including Monzo, Revolut and Starling Bank.

PIF is an 11-year-old organization that advocates on behalf of the prepaid/e-money industry in Europe and has a local chapter in India.

Top 5 Best Challenger Banks: Revolut

Last month, we asked visitors to vote for the Best Challenger Banks—the ones shaking up the status quo with a legitimate chance to become preferred consumer accounts, not just a stepping stone to the big banks.

For the next few weeks, we’ll be sharing our spotlight articles on these challengers. Up first is Revolut, which ranked No. 4 in the voting.

Flagship product: digital banking alternative designed for a global lifestyle.

Location: Headquartered in London but offices globally including New York; Moscow; Krakow, Poland; Berlin; Paris; Milan; Amsterdam; and Vilnius, Lithuania.

Opened for Business: July 2015

Banking License: No, but not ruling this out for the future.

Investors/Funding: $88 million to date from Index Ventures, Balderton Capital, Ribbit Capital and two record-breaking crowdfunding campaigns.

Secret Sauce: Global fee-free spending, interbank exchange rate, free international money transfers, holds up to 16 different currencies in-app and future product launches including cryptocurrency integration, spare change investment platform and travel/device insurance.

Target customers: Men and women, typically between 25 and 35 across Europe.

Active customers: 800,000 (on target to reach 1 million by the end of 2017)

Growth strategy: Global expansion and new features, including cryptocurrencies and investment platforms, updating in-app technology to include faster P2P payments, budgeting tools, gifts and points, etc.

Why do you deserve to be on this list? 

  • In just two years, Revolut is on target to reach more than 1 million customers by the end of 2017
  • One of the fastest-growing fintech startups in the world
  • Innovative and unique services such as cryptocurrency integration and AI support bot
  • Global expansion to North America, Asia and Australasia

Fintech Funding Roundup: Instamojo, AnyPay, Aegon, Funding Circle

We’ve got your back if you want to keep track of financial backing. Our latest fintech funding roundup features Options, Instamojo, AnyPay, Aegon and Funding Circle, as first reported by Banking Technology (Paybefore’s sister publication).

Options, a provider of cloud-enabled managed services to capital markets, has received nearly $100 million in investment from New York-based private equity firm Bregal Sagemount. The money will be used for growth and platform innovations. Options’ website makes no mention of any specific recruitment plans – but according to The Irish Times, Options, which opened an office in Belfast three years ago, is intending to double headcount locally (from 75 to 150) over the next 18 months.

It was founded in 1993 and began life as a hedge fund technology services provider. More than a decade ago, it started offering cloud services to the financial sector. The firm has offices in London, New York, Hong Kong, Singapore, Toronto, Dublin, Geneva, and the Caribbean.

Instamojo, an India-based digital payments platform for SMEs, has raised undisclosed pre-Series B funding from Japanese payments company AnyPay. This is AnyPay’s first investment in India.

According to Instamojo, it plans to expand its suite of offerings and introduce e-commerce-related services such as cataloging, logistics, shipping and GST compliance assistance. The firm was founded in 2012 and allows users with a mobile device and a bank account to accept payments using credit and debit cards, e-wallets and via UPI (Unified Payments Interface). In 2014, it raised $2.6 million in Series A funding.

Dutch financial services provider Aegon is partnering with online lending platform Funding Circle. The four-year co-operation sees Aegon bring in £160 million (US$206 million) of investment. U.K. firms will receive funding over the first 12 months of the collaboration and Aegon reckons this in turn could create up to 6,400 new jobs. (Aegon has also collaborated with other funding platforms such as ZopaAuxmoney and Younited Credit.)

Using data analysis, Funding Circle assesses whether a company has “potential and provides immediate clarity to entrepreneurs about a possible loan.” It was founded in 2010 and says it has provided more than 26,000 British companies with funding, and it has more than 65,000 current investors.

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Image Credits: Shutterstock/SergZSV.ZP