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Review from MONEY20/20 - Day 1

25 October 2016

Review from MONEY20/20 - Day 1

Jason Welham,
Corporate Development Manager,

Greetings from Money2020 in Las Vegas ! It is one of the biggest events in the payments and fintech industry and this year has attracted around 11,000 attendees.

The first panel of the day included representatives from TCH, NACHA, JP Morgan and Fiserv and was initially focussed on the launch of the Same Day ACH initiative run by NACHA. The conversation then moved on, led by TCH, to how the real-time payments platform that TCH / VocaLink will launch in the US next year provides a platform for innovation and richer data via the messaging system, although they noted POS payments via ACH were not part of the design.

This session then led nicely into anothertitled, “Faster Payments Platforms & Solutions”. The panellists included our CEO, David Yates and representatives from Early Warning, Circle, Token and Visa. The first question focussed on the challenges of ubiquity in the US market which the panel agreed was the fragmentation of different systems and the sheer number of financial institutions in the US. In order to overcome this issues interoperability would be key.

To highlight ‘real-time’ solutions that could be offered, Early Warning / Clear Exchange announced they have launched a ‘real-time’ service called Zelle which has both a P2P and bill pay functionality. The system utilises an individual’s phone number or email address as a proxy so in that sense has similar functionality to Paym in the UK and Swish in Sweden. It will be offered via the banks mobile app or a standalone app and will initially launch in 2017 with 20 US banks. The service will compete in the US with Venmo, PayPal and Square Cash.

The panel were also asked their view on blockchain potential. One use case discussed was in the cross-border space and this tied into Visa having announced a partnership with Chain to run a blockchain based pilot in 2017 to deliver instant international B2B payments. The service called Visa B2B Connect will be based around the Chain protocol and will require individual bank adoption. This will be an interesting use case to follow as it could potentially look to rival Swift in this space.

It was mentioned that millennials will be key to driving the development of new solutions, to which David Yates agreed and flagged that VocaLink had focused its latest piece of global research, ‘The Millennial Influence’ (published today), for this very reason. A take away from the research was that it will be key for faster payment systems to work internationally in the future so this could be an area of future development.

The final question of the panel was around the key changes that will be seen in the US payments ecosystem. The panel all agreed that cheque volumes will finally decline and that real-time will be expected as the new norm. David then went on to make the key point that data insights, as we are beginning to see in the UK with the launch of Accura, will become expected as part of the ecosystem.

In addition this afternoon a number of announcements / key notes took place with some of the biggest names in the payments industry revealing partnerships they have just signed.

Google / Android Pay have announced two strategic partnerships with Mastercard and Visa. Google says that Android Pay users who are shopping online from their smartphones will soon be able to make payments on sites where either Visa Checkout or Masterpass are accepted at checkout. The service is expected to launch in early 2017 and is Google’s attempt to increase usage of Android Pay. It was also noted that Samsung Pay will be also be integrating Masterpass to extend their merchant access. Google are also working with W3C standards to create a new payment request standard that will eliminate the need for online checkout forms and become the new standard for checking out on Chrome.

PayPal have announced their partnership in the US with Facebook Messenger and their ex CEO David Marcus who leads that platform. With Facebook increasingly looking to meet consumers where they are and provide conversational commerce options for its users the partnership should see PayPal increasingly offered as the first payment option.

The other announcement to mention is Alipay, the Chinese online payment giant. They are increasingly looking to move outside of China and have signed an agreement with First Data and Verifone which will see them gain access to 1m US merchants. What was staggering to me is that they currently have 450m active users and have an ambition to reach 2bn in the next 5 years! They currently process 85,000 TPS which shows they are a serious scale player.

Last night we had the launch of our millennials research, which proved extremely popular. I will report back to you tomorrow with further insights from the next day of the conference. 

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