Innovations in the world of payments

Season 1, episode 5

The world of payment is being disrupted like never before, accelerated, in part, by the recent economic and societal changed imposed by COVID19.

Contactless payments, rise in online transactions coupled with increased concerns around fraud and cybersecurity mean that the sector is undergoing some unprecedented changes.

In this episode we explore what those changes mean in terms of innovation and from a regulation perspective with 3 fantastic guests:

Genevieve Marjoribanks, Head of Policy and ExCo member at Payment Systems Regulator

Myles Stephenson, Chief Executive at Modulr

Brian Coburn, CEO at Br-dge

Cryptocurrency, towards global adoption?

Season 1, episode 4

Listen to the full episode here.

Cryptocurrencies are regularly featured in the press. Sometimes it’s about Bitcoin reaching a new high, sometimes about a new ICO launching. More recently we learnt that tech giant Elon Musk had bought into the digital currency movement.

There have been many debates since Bitcoin launched in 2008. There are those who believe crypto is just a temporary craze and those who believe it’s the future of money.

With global tech giants launching their own coins and new crypto reaching new highs, we discussed whether now was the start of global crypto adoption.

For our fourth podcast we’re bringing industry experts together to discuss the topic and listen to their views on the future of cryptocurrency.

Guests:

Temple Melvillle, Director at The Scotcoin Project

Nick Jones, CEO and co-founder at Zumo

Zion Schum, Founder and CEO at Leutheria

Tap on Phone Payments – the Future of Contactless.

The way we pay for products and services has evolved drastically over the past decade, from the simple chip and pin to the modern payment systems we know today. Which allows any individual with a smartphone to make a transaction electronically and virtually, within seconds without any physical money changing hands.

While we may feel as though we are at the forefront of digital payments, reaching the pinnacle of its modern advances. Payment systems are currently undergoing transformational changes, by a few in-the-know’ companies, pushing these boundaries and proving there is more than one way for a business to accept frontline payments.

Enter the Paymob app, transforming the ordinary smartphone into a contactless card reading terminal. Making it easy for businesses across a variety of sectors, from hospitality to transportation, to accept cashless payments quickly and securely in-store, over the phone, or on the move anywhere in the world.

With many consumers enjoying the ease and convenience of making contactless payments delivered through their Apple, Samsung and Goodge devices, the same level of convenience has not been established for business owners accepting payments, with many still using expensive dedicated hardware.

We have been blown away by the demand for our technology. Having found ourselves at a crucial turning point in Paymob’s journey to enable payment acceptance, ushering in a new era of micropreneurs’ and the wider gig economy. Today, Paymob is currently exceeding what we as a startup are able to supply, which has led us to seek support, to maximize and achieve our growth potential and fulfill this staggering demand for our future thinking’ fintech.

In January Paymob became a proud member of the Techstars Accelerator programme, with our exceptional Paymob team pushing us both toward the finish line, and the Techstars Hub71 Virtual Demo Day. Our opportunity to pitch what we know to be the future of frontline payment acceptance technology.

We invite you to join us tomorrow, April 7th at 9:00AM to 10:30AM BST, as our CEO Kosta Du dives into our ethos and new product launch, the SoftPOS smartphone app. To attend the virtual event register here.

If you have any questions for our Paymob team, would like to discuss working together, or simply want to make an introduction, don’t hesitate to get in touch at welcome@paymobtech.com.

If you are interested in our product and would like to know more about who we are and what we are doing to level-up the POS market, visit our website for a quick breakdown of our tap-on-phone technology.

To keep up to date with our fintech advances, company updates and for helpful industry resources, feel free to connect with us on Instagram, Twitter, LinkedIn and Facebook.

Paymob is now an FCA certified, VISA and Mastercard approved, licensed payment provider launching in the UK, EU, US, Canada, Scandinavia and beyond.

Banks’ Responses to Embedded Finance and Banking

WRITTEN BY RISE, CREATED BY BARCLAYS

Rise, Barclays’ FinTech ecosystem, is the #HomeOfFinTech and publishes its regular thought-leadership report, Rise FinTech Insights. This edition focuses on Embedded Finance.

In this article, we explore what Embedded Finance might mean to incumbent banks. It’s an area that’s gaining a lot of traction in both B2C and B2C markets across many sectors. In payments alone, Embedded Finance 2020 revenues were $16.1 billion, but by 2025 they’re forecast to reach $140.8 billion[1].

Banking as a Service

Key enablers of Embedded Finance that impact banks greatly include Banking as a Service (BaaS). This is expected to drive great disruption as new BaaS providers’ and the more innovative banks create new and better infrastructure supporting not only the surge in new payment models and Point of Sale financing that is driving eCommerce but also completely redesigned digital journeys that extend beyond retail into non-financial sectors like healthcare, education, agriculture and music.

Those digital journeys will need to be underpinned by new services that must be always-on, reliable and performant at all times. This will often require a significant uplift to the current technical capabilities of the incumbent banks, which will have to deal with legacy systems that are decades-old and costly to adapt to new propositions. This is possibly why we see incumbents invest so heavily in digital-only propositions and in their tech stacks.

Cloud

Another key enabler is cloud computing and its on-demand and highly elastic and configurable capabilities. Disruptors in this space have varied pedigrees ”“ FinTechs, Big Tech, neobanks and incumbent banks are all leveraging the cloud’s potential to innovate faster at a lower cost and to support newer and better B2B and B2C use cases.

In the drive to take financial services to new heights using cloud technology, FinTech representation is, as you’d expect, healthy and has allowed some startups to scale fast. In the payments space, for example, Adyen and Stripe have built modern platforms designed from the ground-up with the cloud at their core. Traditional banks are keenly aware of the disruption to banking experiences brought by neobanks. They of course rely heavily on the cloud and may be able to leverage this core strength to embed payments and other financial features into third-party, web-based products more easily than many incumbents currently can.

APIs

Finally, let’s consider APIs. They’re what lets a bank extend its reach into the new digital journeys of Embedded Finance. Whether it’s a payment transaction at the end of your taxi ride or a request for an instant personal loan when you purchase a luxury item, there are numerous jobs-to-be-done that culminate in a banking transaction. Research tells us that users are reluctant to move to a different digital site to complete that transaction, and the behind-the-scenes operations of APIs support a better, seamless experience. It’s these frictionless experiences that are king in today’s digital world.

When it’s the cloud or APIs, the developer experience should be paramount to banks. After all, other companies’ developers will be the first consumers of any new service that’s created, and if they struggle with opaque processes, difficult integrations or non-intuitive interfaces, banks will lose the agility and scale that allow them to deliver great customer experiences. FinTech developers must be allowed to experiment easily with safe’ data and sandboxes because, only if they’re in place, will financial institutions be able to co-create value propositions at scale.

Thinking like a FinTech

Embedded Finance means that banks will be collaborating with nimble digital players ”“ quite possibly acting nimbler than banks are traditionally used to. You need to move fast to partner with some of the big retail and tech brands ”“ slow and cumbersome processes may present a challenge. This, in part, is why Barclays has signed the FinTech Pledge.

Ready to collaborate?

Can banks think like FinTechs? At Rise, created by Barclays, we like to think so. If you’re in FinTech and are as excited as we are by these developments, we’d love to hear your ideas and thoughts. Contact your closest Rise team in London, New York or Mumbai to discuss how we can collaborate.

Read more about Embedded Finance and BaaS in the Rise FinTech Insights report.

Visit Barclays API Exchange.

[1] https://www.forbes.com/sites/ronshevlin/2020/08/03/ubers-departure-from-financial-services-a-speed-bump-on-the-path-to-embedded-finance/?sh=790efe967673#484180287673

Card issuing and management: staying relevant facing ever faster changing customer expectations

How card issuers are rethinking their business models and technical architecture

Our payments landscape is changing rapidly, and traditional card issuers need to keep up with new competitors that meet customer expectations. Especially now, during times of lockdowns and working from home, customers are expecting digital services that are seamlessly integrated into their every-day lives. This means that Issuers have to rethink both their business models as well as their technical infrastructure to keep up with competitors and customer expectations.

Convenient, fast and reliable

First of all, how popular are card-based payments nowadays? As research shows, this payment method will play a major role in the near future. By 2022, it is estimated that 47 percent of global e-commerce payments will be made using eWallets, while 28 percent will be made using credit and debit cards. At the point of sale (POS), it is expected that 52 percent of all global POS payments are made using either a credit or debit card, with eWallets (28 percent) assuming the third place. These numbers have to do with the fact that consumers find card-based payments convenient, fast, familiar, reliable and secure. A little further in the future, we are likely to see the general replacement of tangible plastic cards by alternative means of payment like mobile payment apps and virtual cards. However, the payment itself will remain card-based and will, thus, to a large extent rely on the established infrastructure of schemes like Visa, MasterCard and local schemes.

Crowded Landscape

This is the reason that the card issuing landscape is getting increasingly crowded as new players spot opportunities to tap into the unresolved growth potential of the card payments industry. Over the years, many traditional banks have delivered card payments services on a license to operate’ basis, meaning that they have typically issued basic products like debit, credit and prepaid cards and have not shown any interest in differentiating themselves through these products. Neobanks seem to be utilising the full potential of cards and card payment services by making them the focal point of additional services. This places the cardholder at the center of the payment experience. Think about services and features like real-time information on transactions, convenient onboarding processes and product control (for example spending limits and geo-blocking).

Challenges

As a result, traditional card issuers are feeling the pressure of increased competition. It urges them to transform their card processing platforms to remain competitive, but there are a number of internal and external challenges that need to be overcome. Think of diversifying channels and the demand for a consistent experience or the creation of new technologies that are disrupting financial services and the arrival of regulations like Open Banking, PSD2 and GDPR. Other than that, players are forced to focus on efficiently processing massive volumes to make the business case viable. In the meantime, internal challenges play a key role as well. Traditional players are, for example, struggling with their legacy systems and their ability to leverage the vast amount of data points produced by transactions. Besides that, players need to protect sensitive data and actual monetary transactions against fraud. And there is also the struggle of managing the increasing number of compliance procedures.

The Solution: Open Innovation

While there are many interesting solutions from Fintechs and other third parties available that address some of these challenges or simply offer a superior frontend experience, they are often hard to integrate into existing legacy applications and some processing partners do neither offer a modular platform nor the commercial flexibility required to quickly test and integrate third party solutions. At Worldline, we are convinced that the best results come out of open innovation. That is why we are hosting the annual Worldline e-Payments Challenge where we bring together our clients and fintechs to create innovative use cases together with our experts. Our modular, real time processing platform allows for simple integration of these solutions based on a large and powerful set of APIs.

Are you looking for creative ways to address the challenges Issuers are facing today? Get in touch with our experts to learn how Worldline can support you. Contact Us: worldlinecommunications@worldline.com

On-Land Payment Infrastructure for Rapid Growth

A strong infrastructure is a foundation for every sustainable financial business. The payment acceptance space is massively regulated by the Payment Card Industry (PCI) and payment schemes (VISA, Mastercard, AMEX, etc.). At Paymob, we decided to take over a heavy part of the payment space – backend infrastructure. We are a software development company focused on b2b enterprise solutions. For the last ten years, Paymob Group managed to develop a proprietary infrastructure for on-land payments, professionally called EFTPOS (Electronic Funds Transfer at Point-of-Sale). We exist to help other fintech and banking initiatives to launch rapidly and grow fast with unbeatably scalable Paymob’s technologies under the hood.

The solution we have got covers the whole card-present payment flow, starting from a till delivering the transaction to the schemes. The bespoke payment interfaces include either a traditional card machine or smart Android-based smart POS terminal or even our in-house developed mobile application that turns a smartphone into a contactless payment terminal. Our core innovation is server-based software that sits between a payment terminal and processors. The core might be an independent payment processing solution as well as an extension of any existing banking infrastructure with hassle-free integration to the latter. Paymob offers a full white-label technology to banks and other fintech businesses. Sberbank, one of the biggest acquiring banks on the planet, is our client. Number one and number three biggest banks in Kazakhstan are our customers among tens of others. In total, the solution is in use by 27 banks in 9 countries around the globe. The tech serves almost a half million of traditional card machines and smart POS terminals.

Paymob has to offer a proprietary EFTPOS system cloud version or in-house deployment. The system might be easily white-labelled, and it includes a TMS (Terminal Management System), Merchant Portal, Payment Switch and other essential functionality. Let me dig in details into a term the Payment Switch. This is a crucial component when a single payment terminal via the Paymob EFTPOS system may be connected to several processing centres at the same time. Depends on which card is presented at the terminal (domestic or international, business or individual, credit or debit) the Payment Switch knows exact transaction fees at every processing centre (bank acquirer) it connected with to navigate the transaction to the cheapest provider to save the cost of the transaction. As well, this feature means an opportunity to connect to national or particular payment systems like some regional QR or bar-code payment systems.

The industry-disruptive piece of our solution is Paymob’s core EFTPOS system. Traditionally a card machine connects directly to a processing centre. Meaning each piece of data will be delayed and sometimes even not accessible at all by stakeholders. Instead, at Paymob, we embedded our core tech in-between of the terminal and processing centre. It puts us at a position to control and route every transaction without breaking the industry regulations. At the same time, our disruptive attitude put us in a position to introduce even more advanced approach. Actual stage of software penetration and almost unlimited possibilities made us able to establish a far beyond idea of an ecosystem where payment acceptance is just one out of hundreds of different features on the same payment terminal. Direct integration with accounting solutions and different ePOS till systems for immediate reconciliation might be done via Paymob’s powerful API engine. Paymob’s Terminal today accepts almost all available payment types. Every payment interface we offer is an access point to a variety of added-value services and provides a full marketplace of other applications.

Good examples of these applications might be a few cases. Taxi ordering app on the same smart terminal may be used at a restaurant to order a taxi for guests. In this case, the taxi service pays a commission to the restaurant and terminal provider. Proper insurance policies might be offered at a bicycle store to its clients, when, again, the insurance provider pays a premium to the shop and the terminal provider. Virtual ATM for the cash-ins and outs, money transfer services, selling or buying cryptocurrencies are other applications to be easily deployed on the terminals. These are only use cases on a surface to be considered as added value services within Paymob’s Ecosystem philosophy.

The latest achievement worth to mention is the most advanced payment interface called Soft POS (Software Point-of-Sale) or Tap To Phone. This is an Android mobile application that turns almost any modern smartphone into a contactless payment terminal. We spent years and a vast volume of resources to certify our in-house developed technology at major payment schemes. Today Paymob is ready to supply the solution on a global scale as an approved vendor. The technology is cutting-edge and disruptive. It drives emerging markets and micro-preneurial economies towards cashless payments. It introduces a zero-cost and extremely rapid process for new merchants onboarding. It revolutionises the whole payment acceptance industry.

We believe in our invention to a degree that we chose one of the most advanced and competitive financial markets in the world, the UK, to launch own payment company and win local businesses. Recently, we obtained a payment institution license from the regulatory authority and going to introduce a whole range of our technologies directly to UK merchants.

Tesco Bank introduces new payment technology

FinTech Scotland’s strategic partner Tesco Bank just introduced a new technology, enabling 2.6 million credit card customers to manage and pay their balance in a much easier way.

The new functionality, called Pay by Bank’ is powered by Mastercard’s Open Banking Connect™ service, a service that allows for payments to be made directly from current account via electronic payment services.

Tesco Bank is the first in the UK to use Open Banking in this manner.

For customers it means they don’t need to use a debit card, can see their current account and their credit card balance in the same place whilst benefiting from added security.

The new technology release is being staggered and all customers should have access to it in the next few weeks.

Sigga Sigurdardottir, Chief Customer Officer, Tesco Bank, said:

“Tesco Bank’s purpose is to help Tesco shoppers manage their money a little better every day. The introduction of Pay by Bank helps us do that for 2.6 million of our credit card customers, giving them a simple and secure way of paying their credit card, and greater control of their finances.

“We are particularly pleased to be the first UK bank to make this technology available for credit card customers. We expect this functionality to be widespread in the market in the coming years.

“This is a great example of the strength that our partnership with Mastercard brings to our credit card offering.”

Kelly Devine, Division President for Mastercard UK and Ireland, said:

“Bringing more simple, safe and convenient ways for people to pay is at the very heart of our Open Banking solutions. With this enhancement, Tesco Bank customers will have greater flexibility to make payments against card balances than ever, aiding budgeting and placing them in full control of their finances.”

*This is subject to your bank’s capability

Cryptoassets businesses and Money Laundering Regulations

From January 2020 the FCA will be the UK supervisor for cryptoasset businesses in respect of Anti-Money Laundering and Counter Terrorist Financing, under amended Money Laundering Regulations (MLRs).

Cryptoassets are developing change connected to the financial services sector.

Both the concept, and the underpinning distributed ledger technology are attracting significant attention and the UK Government established a Cryptoassets Taskforce in 2018 as part of its FinTech Sector Strategy.

The Taskforce published its final report in October 2018, providing an overview of its perspective on the subject, including the underlying technology, the associated risks, potential benefits and a way forward with respect to regulation in the UK.

In reaching conclusions the Taskforce outlined the need for action to mitigate the risks for consumer harm, prevent the use of cryptoasset for illicit activity and guard against threats to financial stability that could emerge in the future.

It’s report sets out three broad types of cryptoassets and typical uses, which together help establish a framework for considering the impact, potential risks and need for regulation.

In setting out its role the FCA has specified a range of Cryptoasset activities that are captured under the new regime and businesses conducting these activities will be required to comply with the MLRs.

The businesses include existing financial institutions that offer the option to convert cryptoassets to fiat (government issued currency), or accept cryptoassets as collateral against a loan or purchase.

The regime will also apply to new businesses and developing business models such as peer to peer providers, digital wallet providers offering a crypto service such as exchange or custodian services, Cryptoasset ATM’s, and issuers of cryptoassets.

Fintech innovators are taking advantage of the growing cryptoasset trend. Some are aiming to make crypto work seamlessly with traditional currencies by developing technology capability that will enable cryptoassets such as Bitcoin to convert to fiat money. It presents new opportunities and challenges for many and is another developing example of the potential directional change digital will bring to financial services.

All impacted businesses will be expected to comply with the MLRs in relation to cryptoasset activities by 10 January 2020. The expectations include the ability to demonstrate that each business has thought about the respective nature, scale and complexity of its activities and the associated risks. Businesses also need to have the appropriate controls in place to mitigate risks and will be expected to keep these under review and regularly assessed to ensure they remain fit for purpose and relevant.

In setting out its responsibilities and the approach it will take to this work the FCA has signposted firms to a number of existing resources to help build an understanding of its expectations when it comes to managing financial crime risks.

These include the FCA’s Financial Crime Guide: to countering financial crime risks, the Joint Money Laundering Steering Group (JMLSG) website, and recommendations from The Financial Action Task Force (FATF) an inter-governmental and global body. Further detail on the FCA’s approach can be found here.

Crypto currency ATM’s appearing in more Scottish cities

Photo by David McBee from Pexels

Crypto currency ATM’s now in Dundee and Aberdeen

2 Scottish cities, Dundee and Aberdeen, have installed their first ever Bitcoin ATMs.

Alphavend UK, Scotland’s leading Digital Currency ATM operator, has just announced that it had installed Bitcoin ATM machines in Dundee (Nethergate) and Aberdeen (Bridge Street).

Citizens can now buy Bitcoin, without having to make long journeys to cities such as Glasgow or Edinburgh and in a way that’s easier than easier than before by simply exchanging cash for the famous cryptocoins.

Alphavend has planned to instal more machines in the UK and is growing rapidly to keep pace with the growing interest and demand which has never been higher.

The high demand can be explained by Bitcoin being chosen more and more as a cost-effective way of sending money around the world.

A Meeting of Coins!

Blog by (Prof) Christine Bamford Founder Women’s Coin

For readers who didn’t know ”¦

Scotland is the first country in the UK (possibly Europe) to be home to 2 global digital currenciesWomen’s Coin and Scotcoin! How cool is that!

It can’t be a consequence that 2 digital currencies have emerged from Scotland. It’s the foresight of the Scottish Government, Scottish Enterprise and Fintech Scotland as a hub for innovation in financial technology. Not to mention active support for emergent technologies by Kate Forbes, Minister for Digital Technologies. Who I think is just fab!

Left: Kate Forbes, Minister for Public Finance & Digital Technology, (Prof) Christine Bamford and Dr Jane Lewis, Women’s Coin

Fintech Scotland, Napier University and other key stakeholders such as Virgin Money, Zortrex, Money MatiX, CU Apps and Payment Centric were so welcoming that we decided to establish Women’s Coin here in Edinburgh. There is no doubt that Scotland makes stuff happen and has a real entrepreneurial spirit.

So how did we connect with Scotcoin? Well it’s all down to Fintech brokering service. It took a couple of meetings to establish a trusted relationship but now we feel that there is power in a collective approach

Temple Melville, Director. Scotcoin commented “There was synergy between our coin offerings and a mutual desire to move towards a ICO (initial coin offering) through a legal regulated framework” Dr Jane Lewis, Strategic Director, Women’s Coin added “We have a track record in successful partnership working – So it made sense for us to explore how we might jointly raise our profile and collaborate on trading”

What is Women’s Coin? It is a digital currency for women (& men) with a humanitarian arm using blockchain to deliver charitable giving to the point in need without third party intervention. Every time you use women’s coin payment you support another woman to survive in the most hostile environments on earth. Supporting United Nations SDF 5 (Women’s Empowerment) A coin with a heart

See website http//womenscoin.com

Scotcoin does what is says on the tin. A digital currency for everyone ”“ anywhere!

To celebrate “Coin Collaboration”Fintech supporters will be invited to learn more about our “Coins” blockchain and crypto currencies during September Fintech Festival 9^th-27^thSeptember