Yesterday we attended an event organized by Lloyds Banking Group in London about the evolution of payments. Returning from 2020, five experts in the field of payments and blockchain gave contrasting insights into what they thought the future of payments held. The panel was composed of Aaron Baker, Digital Payments at Lloyds Banking Group, Volker Breuer, Co-Founder & CEO at Payfriendz, Robert Courtneidge, Global Head of Cards & Payments at Locke Lord, Mike Rymanov, Founder & CEO at DSX Technologies, and Vaidas Adomauskas Founder & CEO at WoraPay.
THE FUTURE OF RETAIL
One of the main topic approached was the evolution of payments in retail. Some were more futuristic in their hypothesis claiming humans will become payment cyborgs with chips implanted in their hand. Others were more moderate claiming it won’t be people who will do the buying but another item or entity – for instance, an intelligent fridge would buy the food and have it delivered.
An interesting consideration was raised about the rising “Uberisation” of the buying process, where the action of paying is taken away from the process of paying. Indeed, we are already getting accustomed to apps such as Uber which render payments seamless, instantaneous and almost mindless. Why should we cue to pay? Why should there be a machine or a cashier to take a payment when you can check out on your phone? Some, like the founder of Worapay, argued phone scanning will be the way forward and that middlemen could disappear from the payment experience.
UBERISATION AND BLOCKCHAIN
The Uberisation of finance also implies an increasing prominence of the sharing economy. A return to a system of value transfer where everyone has a supply chain and a buy chain, with currencies slowly disappearing and losing meaning. This transformation would probably have a negative impact on several sectors and make several industries redundant. The example was given of the abolishment of ownership of cars which would negatively affect insurance companies.
Some speakers were sceptical of the concept of uberising economy and phone based payments, raising questions about the security and desirability of these potential solutions. As an alternative, blockchain systems could offer faster, cheaper and safer solutions to businesses and could penetrate all aspects of transactions. Currently in Russia blockchain is progressively being tested and integrated by central banks, starting with messaging systems.
A recurring topic underlined the discussion concerning our ability and desire to change our habits. Certain members of the panel supported the idea that people like what they know and that the technological evolution of payment depended on a slower and more complex cultural change around the value and use of money. It was pointed out that some countries have a much more advanced integration of innovative payment solutions than others, particularly the Baltic countries with Norway aiming to be 100% cashfree by 2020.
Other interesting themes were touched upon such as the future of payment for B2B transactions, which might rely on the company’s reputation and ratings based on past transactions. The role of the gaming and adult industries in driving innovation of payment solutions was also discussed. Finally, the potential role of developing countries in the technological revolution was briefly approached.
So what does the future of payments look like? The panellists resumed this in one word each: seamless, ubiquitous, customer, value, convenient. The rising value of data is undeniable and we can foresee that data could become more precious than currencies. We can also predict the near future will probably be quite messy, as businesses and customers struggle to select and choose between the myriad of possible payment options. Only time will tell what solution will prevail.
This event was part of Lloyds Banking Group’s monthly ‘Espresso Martini’ series of fintech panel talks, open to everyone via Meetup.com