Payments

Fintech innovators have developed innovations in payment systems ranging from mobile payments, low cost remittances to real time payment settlements. A specific focus is the emergence of cryptocurrencies which rely on a decentralised ledger (the “blockchain”), of which bitcoin is best known.

The fintech intrusion into the payments space has been to improve the customer experience whether it is in speed, convenience or accessibility through a myriad of channels.

It is not just in the transactional aspect of payments that there is innovation but at more fundamental level, notably the influence of blockchain technology as well as the use of data analytics to enhance security of transactions.

The use of data analytics extends further into the domain of fraud prevention and corrective action such as early warning of potential credit card breaches through to modelling each client’s payments history to detect outliers.

Personal identification for the receipt of payments has also been significantly enhanced with the usage of various biometric identifiers that have been integrated within the new payments technologies

The proliferation of smartphones has lent itself to multiple solutions centred on convenience, e.g. mobile wallets, as well as a plethora of other smartphone based apps, e.g. using the phone camera as an identification tool

Person-to-person (P2P) mobile payments generally allows the transfer of value between individuals via mobile devices which previously was the exclusive domain of banks, particularly through the EFT process

Remittance and forex exchange are large turnover segments for which banks are being disintermediated by non banking providers and using technology to do so at lower cost

Fintech innovators have also begun to address the issues in real time settlements of payments, which traditionally used to be done in batch processing

The emergence of cryptocurrencies and the associated blockchain technology that underpins these, are a largely unknown factor but one that cannot be discounted, considering its potential to disintermediate banks as a gatekeeper of transaction data and processing

Payments are arguably the most transactive aspect in any banking relationship hence there are multiple fintechs active in this space – however many of them address only a part of the payment process, i.e. a fintech innovation itself may not look to be payment related but may enhance the payments process in terms of speed, efficiency or customer experience

To this end, it is left to financial institutions to imaginatively combine multiple innovations to create a solution, an example of this is the use of a geolocating data analytics provider to confirm a customer’s location via their mobile and triangulate this with the location of the card transaction, thus increasing the validation of the transaction and preventing fraud.

Some solutions

Mobile payment solutions

These extend from fully mobile P2P payment mechanisms to micropayment systems that allow bill splitting at restaurants

• Mobile app for ordering and payments for restaurants
• Interactive card payments without the need for physical infrastructure especially for small cash based transactions
• Mobile payments using QR codes for microtransactions and bill splitting
• Payments system for mainly SME to automate payment, debit or and credit processes
• Payment service through which online classified users selling goods can electronically receive money from buyers

Smartphone enabled transactions

The increasing penetration of feature rich smartphones have led to innovative use of such features, particularly the camera when allied with Optical Character Recognition (OCR) technologies

• Photographs bills and digitally processes payment through smartphone
• Pay paper bills by using a photograph and paying online
• Deposit cheques using a smartphone camera

Point of Sale (POS) payment systems

These are usually smartphone enabled payment solutions that are allied with a POS device

• Card payment app with card reader that allows sales analytics and split bill payments
• Mobile POS hardware that integrates with mobile devices for payment checkout

Specific payment systems

Several fintech innovators have combined multiple technologies and created a bespoke solution for specific issues. As an example, smaller amounts depending on their risk appetites. In some cases, funding is theme based where investors have higher risk tolerances for companies in particular sectors or serving specific segments.

• Collection of premiums from multiple payment systems than a single bank account
• One platform and that has the ability to invoice , record, collect and pay advisors
• Allows banks to control digital payment relationship with customer online and in-store when using a digital device.
• Combines money from different sources into a one time use digital card
• Payment system especially in remote areas using fingerprint authorisation through a device
• Mobile payments for out of store ordering and payments of goods from retailers and restaurants
• Automates corporate account management for B2B eCommerce buyers and sellers - "PayPal for business"
• Global Wallet Interchange for End-to-End Wallet Collections & Payments

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