EXCLUSIVE – Major European #payments #regulation, #PSD2 is set to go live tomorrow in #Europe. #Banks across the European Union have been preparing for the revised Payment Service Directive or PSD2 since it was first passed in 2015 by the Council of the European Union. The main objective of this new regulation is to level […]
Bank Innovation
While #mobile banking has become normal for the majority of Americans, mobile #payments remain less ubiquitous in the U.S. To change that, merchants and consumers are going to have to find a way out of the “chicken-and-egg” #syndrome that is slowing #adoption, a report released last week by Federal Reserve Bank of Boston found. While […]
Bank Innovation
EXCLUSIVE— Ant Financial’s proposed merger with American #company #MoneyGram is officially dead: and, as of now, the money transfer service is out of suitors for a potential acquisition. The company’s other potential option for an acquisition, electronic #payments #provider #Euronet, is hesitant to make another offer even after yesterday’s reports that U.S. regulators blocked Ant […]
Bank Innovation
#Mobile #payments have been a major trend in 2017, especially for China. This comes as no surprise, with China’s expanding tech-savvy middle class causing e-commerce apps such as Alipay, WeChat and e-commerce mammoth JD.com to grow tremendously over the latter quarters of 2017. According to a report released by internet research firm Analysys yesterday, the […]
Bank Innovation
EXCLUSIVE – #Blockchain in cross-border #payments will be big in #2018, at least that’s what IBM’s Rajesh Venkatraman, director of worldwide payments solutions sales at IBM, thinks. “Blockchain #technology has many applications, but I believe cross-border payments is especially going to see tremendous traction,” he told Bank Innovation. Perhaps that’s also because IBM has started numerous […]
Bank Innovation
Real-time #payments open up some new business opportunities for #banks and their clients.
Financial Technology
The Faster Payments Task Force received 16 proposals for faster payment solutions using different #technology approaches to increase the speed of payment in the United States. Some of the proposed solutions work similarly to traditional payment systems, while others involve significant changes to the way we think about cash and the roles that #banks play in the payments ecosystem.
Among the less traditional entries were proposals submitted by WingCash and nanoPay, which suggest creating #digital #currencies that would enable consumers to conduct digital transactions without the need for a bank account or payment card. While both involve the introduction of digital currency, one would replace the existing fiat currency for digital payments, while the other would be a digital exchange of value tied to the existing currency.
WingCash proposes creating a digital fiat currency. Under its proposal, the Federal Reserve would own the Faster Payments Network (FPN) and issue Digital Fed Notes, similarly to its issuance of cash notes today. Each Digital Fed Note would be a unique and unchangeable URL with a single monetary value, and it would include the issuer’s URL, the current holder’s URL, a currency code and unique identifier (like a serial number). Payments would be conducted by changing the owner of the URL.
The Faster Payments Network could be used for both in-person payments and remote payments (for example, using “digital cash” to pay for online purchases). The exchange of digital notes would occur without transfer fees, with funds immediately available, similarly to how physical notes are exchanged today.
As with cash notes, Digital Fed Notes would not require a bank account or credit card. One of the advantages WingCash highlights in its proposal is that a digital currency solution could increase access to the electronic payments system, opening the door for users who may have been excluded from the traditional banking system. However, potential barriers to implementation include regulatory changes that would allow the Federal Reserve to issue a digital fiat currency.
nanoPay also proposes a digital currency, but the system of value would operate outside of the Federal Reserve. nanoPay proposes a good-funds, collateralized bearer-asset transfer system in which users would exchange fiat currency (collateral) for nanoPay’s MintChip (asset). The fiat currency would be stored in a pooled account, while the equivalent MintChip amount would be stored in a Secured Asset Store (SAS). Transactions completed in the MintChip ecosystem would be a transfer of value between two SASs using Value Transfer Messages.
In the MintChip model, an Asset Manager would protect the pooled funds of fiat currency and invest the funds in instruments where the principle is guaranteed. Depository institutions would act as brokers that pre-purchase MintChip “coins” and use APIs to provide end users access to the MintChip platform. Regulated non-bank providers and larger retailers could also participate as Brokers.
nanoPay’s proposal does not depend on the Federal Reserve’s willingness to create new monetary policy or serve as the originator of digital currency. As a non-fiat currency, however, nanoPay could face challenges of perceived trust and security, particularly regarding the management of the pooled funds that serve as collateral for the digital currency.
As highlighted in the two proposals, digital currency solutions could increase the speed of payments while decreasing payments system costs and expanding financial inclusion. However, WingCash and nanoPay acknowledge that their proposals could pose a threat to traditional payment card revenue streams. Despite these challenges, central banks in other countries like China, Canada and the Netherlands are exploring digital currencies, and the US may follow suit.
Whether replacing fiat currencies, creating a digital exchange tied to existing currency or another idea yet unknown, payments solutions built on the faster, more efficient digital form will transform payments and banking. #Industry players need to prepare for the pending change and their role in it. To discover more about how other digital currency forms will #disrupt the industry, read our report on The (R)evolution of Money.
The post Digital currencies to disrupt the payments industry appeared first on Accenture Banking Blog.
Over the last several years, fleet payments have seen significant evolution with quickly expanding use of electronic payments, mobility management and other value-enhancing paradigms. And the journey has just begun. Driving fleet payments’ future forward are three key trends with significant industry implications: specialist transformation, fleet card globalization, and technology disruption.
Fleet payments have been an attractive market for specialists, particularly in the US where they have increasingly built scale and synergies with partnerships and acquisitions. The two largest providers have rapidly grown their businesses, and Accenture anticipates just three specialists – FleetCor, US Bank, and WEX – will generate US$ 3 billion or more in US purchase volume in 2017. While down from seven in 2012, these remaining providers’ portfolios have grown more sophisticated with enhanced functionality in serving fleet fuel, and increasingly non-fuel, spend needs.
With high large fleet (greater than 100 vehicles) penetration, small-to-medium-sized fleets are attracting greater industry focus. Accenture estimates these fleets (fewer than 100 vehicles) make up roughly 90 percent of the incremental North American vehicle opportunity. While continuing to build revenue per vehicle with existing fleets, fleet card specialists could position themselves for near-term penetration of this segment and long-term value through the expanded base.
But the small-to-medium segment is different. Like other small-to-medium businesses, these fleets prefer competitive pricing and fees, fast implementations, DIY configurations, and interoperability with other vehicular technology investments which can provide that “Uber-like” experience to which small-to-medium fleets are so close. This new experience requisites a reexamination of provider business models across many different drivers to fit customer and internal needs while aligning with relevant shifts observed from global interactions.
The recent price environment has left integrated oil companies in the US and globally looking for ways to streamline operations and release tied-up capital, particularly as they move towards major legacy technology decision points. Moreover, US and Canadian fleet card partnerships, in many cases, have proven beneficial to major oils and to their fleet customers, unlocking value for all involved. This could catalyze new waves of fleet card globalization.
Building on US and Canadian successes, FleetCor and WEX (the two largest global fleet card specialists) have penetrated similar markets (such as Australia and the United Kingdom), expanded value chain presences, and won major programmatic deals in Europe with Shell (FleetCor) and ExxonMobil (WEX).
Considering global commercial vehicle fleets, fuel demand and revenue yields that frame the fleet payments universe, Accenture analysis suggests potential for at least US$ 7 billion in revenue outside the US and Canada, with global fleet card specialists having reached just a fraction (roughly one-tenth) of that opportunity.
The key architectures to maximize cross-border efficiency are moving closer to readiness, and if executed effectively, several new avenues of growth may result. As examples, FleetCor is progressing its second-generation Open Loop solution; WEX and others are enhancing fleet management technologies; and providers of all sizes are experimenting with more open approaches inspired by liquid consumer expectations. But globalization will require much more.
Overseas markets are each distinct, with complex economic dynamics and entrenched local and regional market participants. Current participants weave a complicated web for new entrants; and while new entrants, including global fleet specialists, have started to gain share, they have a long way to go to create conditions closer to those in the US market.
To drive timely global fleet payment transformation, providers of all sizes will need to focus, message and execute effectively to receive the trust of potential customers and partners in the value chain while protecting against being disrupted themselves.
To keep pace with market expectations and remain competitive, providers are embracing disruptive technology. Digital and mobile are among many technologies helping companies better manage their fuel and vehicle-related expenses and have become increasingly popular in the past few years.
Mobile applications allowing fleet card drivers to find fuel locations have been around for several years; however, mobile functionality for fleet managers is relatively new. EFS (an affiliate of WEX) recently announced its CarrierControl Mobile app which allows fleet managers to load cash onto driver cards, view real-time card transaction details and activate/deactivate driver cards in real time. Others are investing in similar on-the-go fleet card management features, expecting that the vast capabilities available online (for example, setting daily transaction limits) will increasingly become available on a mobile phone.
Technological advancements beyond cards, such as telematics integration, are in progress and provide opportunity and threat to current providers. As technologies to integrate data from third-party systems (such as open APIs) progress into market, fleet card providers will have even more tools to offer end-user organizations.
In the US, innovative international players such as Radius are entering the market and start-ups are offering alternative forms of payments. New mileage reimbursement technologies, meanwhile, are being marketed as alternatives to traditional fuel cards. And new partners, such as hypermarkets and c-stores, while willing to partner with existing providers, expect a certain experience for their customers in line with the retail trends they experience globally today.
Providers across the value chain—payments specialists, fuel providers, and fleets—have the opportunity to embrace these trends in the context of their own prisms. To build future-oriented, agile business models that positively re-define value creation, each player must consider strategic and tactical actions:
With ever-growing market sophistication, those who embrace the thematic trends impacting fleet payments can proactively chart their journey with knowledge of how to read signposts along the way. I invite you to reach out to me to find out more.
The post Revving the fleet payments engine appeared first on Accenture Banking Blog.
Businesses and developers will soon be able to accept #payments directly through voice apps on #Amazon’s #Alexa device, the company announced yesterday during its re:Invent event in Las Vegas. This essentially works the same way as a mobile in-app purchase would: after reaching a limit of free content on participating voice skills, users can now […]
Bank Innovation
#Payments processor #Mastercard is continuing its focus on innovation and partnership, announcing the #latest 11 companies to join its ‘Start Path’ program as well as the expansion of its NYC Tech Hub. The latest companies to join Start Path, a Mastercard program aimed to support later-stage fintechs across the globe, including #blockchain, health, and payment […]
Bank Innovation
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