The Big Bang in Payments
Rapid and large-scale changes in consumer needs, trends, and payment technologies were among the major topics under discussion at this year’s Visa Informal Cashless Forum 2021, where experts discussed the short- and longer-term trends following the COVID-19 pandemic.
There’s no doubt, the pandemic has transformed the payments industry. “Among other things, it brought numerous opportunities to overcome obstacles, produce relevant solutions and emerge in a better state than before,” said Professor Nassim Nicholas Taleb, author of bestseller “Black Swan”.
Vira Platonova, Group Country Manager for the Commonwealth of Independent States and South and Eastern Europe (CISSEE) at Visa, identified the pandemic as one of the primary drivers of eCommerce growth. “Amidst the new risks and concerns, merchants quickly adapted to provide innovative digital technologies and solutions to protect their businesses. This includes payments solutions such as digital payments via smartphones – with the number of terminals based on Tap to Phone technology nearing tens of thousands,” she said.
In this article, we explore and share the latest payments trends and insights from around the world presented at the virtual forum focusing on the CISSEE region.
The next fintech revolution
In line with its “Network of networks” philosophy, Visa strives to bring the cashless economy to every country, enabling cardholders to make purchases with the best user experience wherever they are. Moreover, physical cards are fading into the past, giving way to digital issuing throughout the CISSEE region. For Visa it is a strategic priority – every country in the CISSEE region has a tap to phone project underway.
“If we’re talking about a cashless economy, it starts with instances where I can use my card every day. If we can enable card acceptance in public transport, this will significantly increase people’s payment activity in other places.”
Tap to phone technologies will continue to develop and appear everywhere. “If a phone is affordable, it may be more optimal than a terminal”, said Oleksander Yablunivskyi, Vice President at Visa Solutions, CISSEE.
CISSEE is the global leader by both the number and the volume of peer-to-peer (P2P) transactions. To make P2P even more convenient and useful to consumers, Visa CISSEE is actively developing a new service based on the Visa Direct platform, which enables P2P transactions using only the phone number of a recipient instead of a card number.
The future of authentication
Modern authentication solutions can not only help prevent all types of fraud and presentation attacks, but also open much wider opportunities for use, especially in the IoT world. Alexey Khitrov, President and Co-founder of ID R&D, highlighted that authentication based on biometric data such as face, voice and fingerprints is a key trend.
“Within the next two to three years, you and I will have multiple experiences of paying with our face without even thinking about payment. It’s just a question of scaling the experience and Visa is enabling this experience in everyday reality,” said David Birch, author, advisor and commentator on digital financial services.
Ukraine is leading the way on authentication. The country already has remote identification, where a user can sign in fully using video, issue themselves a digital card and never have to issue a physical counterpart. This is also applied in business and government work with the Diia app, which allows Ukrainian citizens to use digital documents in their smartphones for identification and sharing. “Our mission is to help governments adopt the law, allowing remote identification”, said Vira Platonova, Group Country Manager for the CISSEE region.
“When we launched digital passports in Ukraine, we became the first country in the world to equalize on the legislative level, digital and physical passports” said Mykhailo Fedorov, Vice Prime Minister of Ukraine and the country’s first ever Minister of digital transformation.
Predictions for 2022
According to David Birch and Professor Nassim Nicholas Taleb, the future of finance will be far more decentralized and will require new kinds of currencies. Taleb believes that true digital currencies ought to be well-regulated, more akin to Central Bank Digital Currencies. Birch however expects future digital money to be more community-centric, with different types of private, regional, or even industry currencies used for different applications.
“In this decentralized finance future, where it’s primarily artificial intelligences dealing with other artificial intelligences, the financial instruments which they can actually exchange trades within that market can be much more complex than they are now. If you look at the evolution of the technology, the introduction of the multiple different kinds of currencies and asset trading, you do see a scenario in which money just goes away,” said Birch.
To watch the full Cashless Forum, click here.
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