The Climate, Weather and Payments – What the Winds Tell Us?
I am sitting in my home watching snow fall, it’s April and I just spent the weekend prepping my yard for the upcoming summer season. To say the weather patterns are odd is an understatement. The global climate is warming as we know. And though you don’t see it on a day to day basis, it seems to hit more regularly than in the past, with freakish events, colds snaps, warm spells and snow storms in April. And on this occasion, it had me thinking about our current environment in payments. We are seeing a fundamental change to our ecosystem with technology advancements like Open APIs, big data, AI and foundational changes like Immediate Payment initiatives and regulatory pushes.
For the most part, the average consumer won’t notice the shifts happening on a day to day basis because they don’t change their habits. Maybe it’s an occasional new app or dipping their card in the POS terminal verses swiping, but slowly and surely, those habits are changing, just like the warming climate, however they don’t happen all at once—it’s an experience and if that experience is enjoyed, they do it again and again until the habit is formed (or in the EMV example, they didn’t have a choice, the swipe was no longer accepted). The changes that seem small or insignificant at the time, as a new app launch or new tech startup offering a new way to pay, can quickly take over and make the old way of transacting slowly obsolete, just look at what is happening to cash in a place like the Sweden. What seemed impossible 3 years ago is now a real reality, cash is not king, in fact, it is barely accepted.
The fundamental foundations of the ecosystem are changing in payments, the central infrastructures are being modernized to reflect the real time reality in which we live—24x7x365 always-connected always-available. With those foundations being laid today, it only stands to reason we are at the beginning of our warming trend, tomorrow’s reality won’t look like today’s reality, and much like the warming climate has created weather patterns that aren’t recognizable in the traditional sense, April is supposed to feature showers that bring me May flowers! A payment at the POS used to only be in cash or card; now we have mobile, direct from account and who knows…maybe even a wink and nod will do soon.
The changes are happening, and unlike the climate warming, we not only are welcoming the changes we are seeing in payments, we are cheering them on, because each leap and bound forward will get us to a more secure and inclusive payments environment, which in the end benefits all of us—lower fraud, lower transaction costs to consumers, quicker advancements in technology, etc. These are all things that create great new experiences and opportunities. And unlike actual climate change, which is moving (or melting or shifting) things that are measured in years and decades, we are measuring changes in weeks and months! So change is certainly blowing in, and I hope spring and summer aren’t far behind!
Related Blog Posts
Instant Payments in Italy – And Beyond: Lessons from Il Salone dei Pagamenti
ACI was invited back to Il Salone dei Pagamenti – Italy’s premier payments event organized by the Italian Banking Association (ABI) – to participate in a panel, “SEPA Inst – the Future.” As expected, the session was packed with stats and advice for a more efficient roll out of instant payments – in Italy and beyond.
To Regulate Or Not To Regulate – Is That Thy Question?
Debates are healthy, and as someone who spent a little time during my college years dabbling around the edges of the speech and debate team, I can tell you it’s something that I personally relish. A chance to really talk through the pros and cons of an argument and lay out the bare facts… and then be judged based not only on those facts, but on the presentation and power of persuasion—sign me up!
Request for Pay – What Does It Mean For Financial Institutions?
What do banks – one with $60B+ in assets, one a mid-size regional bank, and one, a small innovative credit union – have in common with payment networks and the ‘Big 4’ consulting firms? They were all part of the first ACI #PaymentsForBreakfast event in North America! The theme was real-time payments, but the focus was more specifically on Request for Pay.
Why Open Banking Might Need to Rely on a Magic Illusion of 24x7 Availability
The adage “the more things change, the more they stay the same” appears to ring true when applied to the early phases of the evolution of open banking (or open payments). Especially when you contrast it with the early days of ATM withdrawals; particularly those made in the dead of night so you could pay cash for your after-party greasy feast.
Sibos Preview: The Five Trends Transforming Real-Time Payments
Real-time is now a reality, with more than 30 schemes live around the world. And real-time is in the spotlight as banks and financial service providers make their way to Sydney for Sibos 2018. What better time to look ahead at the key trends that are going to shape the ongoing development of real-time payments.
Winners and Losers in the Regulation Vs Competition Debate? How About New Business Models?
As Summer has abruptly turned to Fall, I have found myself daydreaming of a European vacation (and yes, I realize it’s Fall there too… or rather, Autumn). Maybe it’s the Instagram feed full of friends on a summer sojourn to Italy, France, or Germany, or the constant barrage of Premier League kickoff commercials on the NBC Networks (Let’s Go Gunners!), but yesterday it was something else entirely that had me drifting off into a memory-induced Nutella-crepe state of euphoria.
API Management: The Reason Digital Open Banking Can Fly
When it comes to thinking about the different roles that an API Manager can play for an organization, I personally think that an airport provides the perfect analogy. The customer is the passenger, the third-party organizations using a bank’s APIs are the airlines and the airport itself is the bank. I also think this analogy helps to visualize the variety of API management capabilities – including the role of an API gateway.
The Mexican Fintech Revolution – ¿Qué onda in Open Banking?
Mexico has joined an elite group of nations, being amongst the first to pass open banking regulations. Specifically designed to open up its financial services and technology sector, the so-called ‘Fintech Law’ appears to have taken notes from PSD2, UK Open Banking, Singapore’s ‘organic’ approach, and others – and balances these against Mexico’s unique context and aims.
ACI’s Lu Zurawski, one of the industry's foremost open payments experts, and Sonia Gomez, a Latin America payments authority, discuss this balancing act; including the drivers, the regulation and the potential benefits.
Working Up An Appetite for APIs in Australia
This week ACI hosted the latest installment of our #paymentsforbreakfast forums in Australia, with the early birds catching the open banking worm in both Sydney and Melbourne.
Given the similarities between the Australian and UK open banking movements, we enticed ACI’s UK-based Lu Zurawski (Solutions Practice Lead - Retail Banking) to Australia to share his learnings from being heavily involved in the UK Open Banking working group.
APIs and Cash Management (Harnessing the Hammer, Part 2)
In my last blog post, we talked about the hammer and the nail; the hammer in this case being open APIs, and the nail being the market need to adapt to changes in customer behavior and expectations from our commercial market. We laid out why the US is in a different position when it comes to open APIs—it has to do entirely with the regulatory environment, which is allowing us to start with the largest revenue opportunity first. Finally, we challenged you, the reader, on how you can begin on your journey. And that is where we are going to pick things up. What steps can you take today, and what use cases can you explore as we start getting our hands dirty?