| Here at BI Intelligence, Business Insider's premium research service, our goal is to provide:  | Unbiased insight and analysis
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| As part of this mission, we have a team of heavy-hitting analysts spending thousands of hours researching and identifying the core issues you need to know within your key areas of interest. To do so, the team dives into all available research and data followed by exhaustively refining their findings into jargon-free straightforward reports. Payments has been one of our most dynamic subscription verticals, led by managing analyst, John Heggestuen. On a daily basis John and the research team analyze technologies and companies at the forefront of emerging trends in payments. Recently, John expanded the research breadth to include the fintech revolution. We interviewed John about the current state of payments and the impact fintech is having on the industry. Here is our conversation… | John, can you talk about what you see happening in the payments industry now and where we are headed in the next year or so? | |  Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices. These commerce capabilities are compelling to merchants because they promise deep insights into the shopping process that can be leveraged for up-sell and cross-sell of products. Alternative technologies like blockchain — the technology behind Bitcoin — could also disrupt the processing ecosystem in the near future and we already see a lot of interest in this technology from banks. And then you have fintech startups, some of which have garnered blockbuster investments, that are re-imagining almost every type of financial activity. While fintech is certainly more of a reality than a threat in terms of technological disruption, the impact on legacy players is more nuanced with lots of opportunities for collaboration. | | | What about the legacy players and traditional banks? How do you see them adapting to trends such as Bitcoin? | | | Banks are already adopting a strategy of partnering with smaller fintech firms in order to leverage their services and bring them to a wider audience. As these startups prove their worth, they become acquisition targets and will give banks an opportunity to try before they buy. Major banks like ING and JPMorgan Chase have partnered with digital-based alternative lenders like Kabbage and OnDeck in order to better fund small businesses, for example. As for bitcoin, the real opportunity there is the underlying technology called blockchain. Major banks have already started adopting blockchain for managing interbank transactions. I would characterize the general trend from a legacy players standpoint as cautious exploration and cooperation. | | | And mobile wallets? There was a lot of buzz around the launch of Apple Pay a couple years back which lead other companies to catch up and launch mobile payments capabilities. Where are we headed in this space? | | | Yes, there are many players in this space now and the capabilities are and will continue to become more sophisticated with companies incorporating loyalty programs and utilizing beacons to communicate with consumers. Consumers already rely heavily on their smartphones, the expectation is that they will pay with their phones as well. We're really looking at ubiquity when it comes to mobile payments, more merchants just need to adopt the acceptance technology so that consumers can make a habit of paying with their phone. | | | With more sophisticated forms of payments, we expect more sophisticated forms of fraud. What are the main security concerns and solutions? | |  EMV security standards created by major card networks to better protect card-present data have been used internationally for years, and the US officially migrated to this standard on October 1, 2015. This has bolstered the security of card-present payments. However, it's also widened the security gap between in-store and online commerce, making the latter more attractive to fraudsters. The security behind mobile payments is actually a lot stronger than that of plastic cards for both online and offline transactions — at least on paper. The big mobile payment features you see coming out — Apple Pay, Android Pay, and Samsung Pay — authenticate the user, the device used, and the payment data when a transaction is made. EMV cards only authenticate the device and the payment data for in-store transactions and just the payment data for online transactions. That said, because mobile devices are connected, there are more points to attack from and fraud techniques evolve according to the evolution of technology. So while mobile payments have very strong security, we'll have to wait and see if it's a match for the creativity of fraudsters. | | | Peer to peer payments have become a mainstream form of payments especially for transactions like spitting bills or rent. Will P2P go beyond these personal transactions? | |  P2P apps like Venmo will look to evolve into platforms that come with other, more lucrative payment capabilities, including in-store payments. Simultaneously, mobile wallets like Apple Pay will likely add P2P capabilities to attract users. Even social platforms are getting involved here- Facebook launched P2P capabilities in their messaging app. The remittances space is changing in a similar way, as startups like Xoom make sending money abroad easier and more cost efficient with digital technology. | |
Want to keep up with the latest developments in payments? If you want to keep up to date with the latest developments in payments and gain access to all of the research and reports from John Heggestuen and his team, subscribe to BI Intelligence today, risk free! By signing up, you'll be adding John and a whole team of extremely intelligent analysts to your team. With your subscription you'll gain access to a library of research reports which take a deep dive into some of the trends we touched on in the interview, including fintech, bitcoin, mobile payments, peer to peer payments, remittances, and hundreds of others. In addition to payments, BI Intelligence covers digital media, the Internet of Things, e-commerce, and mobile industries. All research is presented in an easy to digest format through reports, newsletters, charts, infographics and includes the underlying data for your reference. Learn more today » |
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