What to expect in fintech innovation

By Bill Gajda, SVP, Innovation & Strategic Partnerships • Visa Europe

January 19, 2017

As many of us come back to work after the holidays, in addition to trying to remember our office passwords, we’re thinking about the incredible developments that we saw in 2016 and anticipating the changes that are to come.

At Visa, we’re no different. Last year, we successfully enabled millions of Visa cardholders to take advantage of the expansion of Apple Pay and Samsung Pay as it launched throughout Europe. We also launched the Visa Digital Enablement Programme to make it faster and easier for banks who use the Visa Token Service to join these third party payment services. As we look to 2017, we think that mobile tech will continue to play a crucial role in the development of digital payments.

Point of sale

At the top of the list of the trends we expect to see in 2017 is acceleration in the transformation of POS payments. In the last year, there have been tremendous strides made in payments made with mobile. Now, we expect to see similar growth in acceptance, as well. The expansion of affordable mobile tech – as well as the expected expansion of popular names such as Square and iZettle will mean that mPOS will become increasingly popular for small to medium businesses, many of whom lose up to 25% of their footfall because they do not currently accept payments, according to a Visa consumer survey.

MPos isn’t the most revolutionary moves to come to point of sale, however: POS could disappear altogether, moving to the cloud. Last year, Amazon announced the Amazon Go app to work with stores who implement the system. It is a “prime” example of one of the trends Visa has been talking about for the last year: the move from check out to check in. When customers shop at participating stores, they check in upon entering the store, then, as they add items to their basket, the price is added to the shoppers Amazon account and deducted when the shopper exits the store.

Push payments

Outside of the retail environment, we expect to see the continued uptake of push payments. In the 2016 Digital Payment study of more than 36,000 consumers in 19 countries, we found that 59% of the people surveyed have used their mobile device to transfer money to friends or family. Whilst we think that person-to-person payments will continue to grow, the key driver will come from new payment models enabled by the sharing economy, such as Uber, Lyft and AirBNB powered by innovative payment platforms such as Stripe and Square. In these propositions, the customer uses tokenised card on file services to pay the company which then distributes payment to the providers of the services (e.g., the Uber driver or AirBNB host).


In addition to the consumer-facing experience, the technology behind the scenes will continue to grow in importance during 2017. Tokenisation is a key technology that makes mobile payments simple, safe and secure by substituting a series of numbers for sensitive payment details. Tokenisation currently supports Apple Pay, Android Pay and Samsung Pay as well as a number of payment services offered by banks.

Looking ahead, we see tokenisation as an enabler that will become more than just the technology that makes mobile payments safe and secure. We think that tokenisation will also be a crucial supporting technology for authentication, as well. For example, by creating the ability to safely manage use cases and limit the payment permissions attributed to a tokenised account, it becomes possible to say that payment will only be accepted if certain conditions are met. This token will only work for mobile payments on this mobile device, which can only be activated by that device’s biometric authentication. These degrees of specificity cannot be replicated by the piece of plastic we are used to carrying in our wallet.

And, because tokens can also be used at the merchant level, we think that the growth of “token on file” solutions will accelerate this year as companies look to new ways to make their data more secure and less of a temptation for hackers. By replacing sensitive consumer account data with tokens, merchants would effectively be “desensitising” the information they keep on file. If digital thieves steal this data, they could not use it with any other merchant nor could they use it to backtrack into the primary account information – rendering it useless.

Driving innovation

Just as 2016 was the year that mobile payments final became reality in Europe, reaching the consumer market at scale with the expansion of Apple Pay, Android Pay and the launch of Samsung Pay, 2017 is going be a year of serious change brought about by mobile technology, as well. From person to person payments to user authentication, we see large companies and entrepreneurs, alike, looking to new ways that they can leverage it to continue making payments faster, easier and safer than ever. We also think that microservices such as tokenisation will enable the developments of customisable solutions based on consumer need rather than a “one-size-fits-all” approach.

And we at Visa will continue to drive this innovation, making new ways to pay available to banks, businesses and consumers throughout Europe.

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