Digital wallets will start to gain traction this year as customers grow more comfortable with paying via their mobile phone, says ANZ General Manager Deposits & Payments, Katherine Bray.


Katherine-Bray.jpgSo far in 2016 the bank has launched ANZ Mobile Pay and support for both Apple and Android Pay.

Bray says this is the year when digital wallets take off. “2016 will see the wallets gain mainstream recognition - they won’t eliminate plastic, but the mystique will disappear and the latent demand will be met,” she says.

She identifies several key trends in payments in the coming years, including continued digitisation, with the displacement of cash as the card and bank transfer technologies get more sophisticated. “Faster, slicker customer experiences and value-added service pre and post the transaction will drive these,” she says.

Customer expectations have also changed, with more global awareness among consumers and cross-pollination between industries. “They ask ‘why can’t you?’ which is great for keeping us on our toes,” she says.

“They love simplicity, which is great, but in many cases it simply moves the complexity out of sight. For example, customers may be increasingly comfortable with trading security for convenience, which is great right up to the point where something goes wrong, so we need to provide that security but keep it out of sight.”
"2016 will see the [digital] wallets gain mainstream recognition"
Along with the introduction of mobile wallets, Bray says ANZ is also “tinkering” with some card acceptance solutions, which will allow merchants to take card payments. “Stay tuned,” she says.

The bank is also experimenting with “next horizon technologies”, such as the blockchain.

She says there will be increasing use of development partnerships as applications become more specialised and speed becomes more important.

ANZ is also a founding participant of the New Payments Platform (NPP), which is scheduled to launch in 2017, and which BPAY’s Initial Convenience Service (ICS) will be the first service delivered on.

But Bray doesn’t expect it to really take off until 2018 as “the broader payments ecosystem start to get creative with their new toy”.

“An analogy here is the release of new games console platforms – the launch titles are generally just good enough to showcase the system, but the ‘killer app’ usually comes a bit later. It takes the developers a year or two to work out how to extract the real value from the new hardware and then things really step up a notch,” she says.

Some limited forms of real time payment and easier addressing are already possible today, so progress in these areas will be evolutionary, rather than revolutionary, says Bray. “The exciting aspects of the NPP are the features that aren’t easily done today – in particular the data and the non-value messages,” she says.

Banks need to couple stability and agility

Bray says banks don’t have to match the fintechs on agility, which some people in financial services say is the great advantage of the smaller upstarts.

“I don’t think we have to be the same as fintechs, or should aspire to. Most of these fintechs burn brightly and flame out,” she says, citing reports that of the more than 450 dot-com era fintechs, fewer than 10 remain and only PayPal is a household name.

However, she says there is a need to embrace the best of both worlds – the agility and bravery of a fintech coupled with the stability and security of a bank. “Partnerships are a great way to do that and you’ll see more of that from ANZ,” she says.
"Innovation ... should be an everyday aspiration across our business"
“There’s currently a lot of space for fintechs to be involved, but it will be interesting to see which solutions stand the test of time.”

She also says ANZ tries to make innovation an everyday thing.

“Innovation isn’t something that can only happen in a cool warehouse whilst wearing jeans: it should be an everyday aspiration across our business from simple removal of ‘pebbles in the shoes’ through to the headline-generating activities,” she says. “We do have a group innovation function that looks at broader initiatives and coordinates with small teams of specialised domain knowledge distributed throughout the business (ie we have a payments innovation team, a small business innovation team etc).”

The bank also runs hackathons and sponsors the Innovyze incubator, works with a number of universities to tap into their talent, and has ties to external hubs such as Sydney’s Stone & Chalk and Melbourne’s York Butter Factory.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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