Payments 2021: how did we get here and where are we going?

It’s strange to think that 20 years ago, payments didn’t really exist as an industry in its own right. Fast-forward to the start of this decade and it’s a very different story – payments, banking, fintech, commerce (and much more) are all part of a thriving, complex, interwoven ecosystem.

Recently, Paul Chandler, Sales Director at Compass Plus, spent some time in the Fintech Finance Virtual Arena, talking with host, Doug McKenzie, and HSBC’s CIO, Brian McKenney about the future of payment platforms. Of course, it was only natural they should start by talking about how the changes of the past decade or so have influenced where we are today and what opportunities lay ahead.

What’s clear from the conversation is that there are a few pivotal technologies that have gotten the industry to this point and it’s poised for even more innovation. Real-time payments, the rise in mobile payments (and apps in particular) and the introduction of contactless payments have undoubtedly underpinned many of the significant shifts in consumer payments in recent years. Real-time, mobile and contactless are also all converging, creating interesting new possibilities for the customer journey.

The trio also discussed two even bigger game-changers: Open Banking and the cloud. The proliferation of APIs across the payments industry is a very welcome one, and although consumer adoption has been somewhat slow, there are now some common standards, which have fostered interoperability and connectivity at a global level. This means that banks and fintechs are in a great position to really think outside the box to create new payment journeys and methods for their customers to interact with them.

The cloud has changed the way everyone does business, in so many ways. There is a fundamental shift towards everything as a service (XaaS) – something which enables companies to sprint to market. Cloud-based platforms are also the way forward for scalability and cost-effectiveness – what business wouldn’t want that?

So, now there are all these enabling technologies and customer demand for the kind of slick interactions they can support, the possibilities are seemingly limitless. Of course, adapting and introducing innovation is rarely as simple as it sounds and many traditional banks and businesses are still struggling to take advantage of the opportunities on offer. But it’s fair to say that those who do find a way will thrive by realising the benefits that new technologies and customer journeys can offer. These companies will be those who ride the wave of innovation and take their place in the digital-first future of payments.

To hear Paul talk on this subject in more detail, you can view the conversation with Fintech Finance, in their Virtual Arena session on ‘The Future of Payment Platforms’.