In the ever-evolving payments landscape, future trends shape how we buy and spend. While contactless payments are increasingly becoming popular, offering convenience and security, digital wallets and peer-to-peer payment platforms are revolutionizing how individuals and businesses exchange money. Additionally, integrating artificial intelligence and machine learning enables personalized and predictive payment experiences, streamlining processes and detecting fraud.
As technology advances, we can expect innovations such as blockchain-based payments, biometric authentication, and the integration of IoT devices to transform how we pay and pave the way for a more connected and efficient financial ecosystem.
In a recent interview on the sidelines of the Dubai Fintech Summit, Otto Williams, SVP, Head of Product, Partnerships, and Digital Solutions CEMEA at Visa, discussed key trends driving growth in the payment industry. Shedding light on the significance of token innovation, he says, “We have over 4 billion tokens globally, surpassing the number of physical cards in circulation.” Token technology has witnessed substantial innovation, with applications ranging from contactless payments through mobile devices and wearables.
Expanding on what’s next in terms of trends in the payment landscape, Williams pointed out the popularity of car payments facilitated by tokens. According to him, vehicle wallets are becoming a reality, allowing seamless transactions for services such as towing, fuel, and electric charging.
Stressing the need for continuous innovation to manage fraud and risk in an increasingly complex payment landscape, he said, “We have so many payment networks – from open banking payment networks, RTP payment networks, P2P payment networks, to crypto payment networks – that creates risks and opportunities for managing fraud and risk.”
Another critical trend is cross-border money movements. Acknowledging the inefficiencies, high costs, and manual processes involved in international money transfers, he says Visa is investing in infrastructure and acquisitions to address these challenges. “Visa Direct platform allows for digital money transfers to over 3 billion Visa cards,” and Earthport’s acquisition provides access to an additional 2 billion bank accounts. Furthermore, partnerships with companies like Thunes enable Visa to move money into mobile money wallets worldwide, paving the way for enhanced digital cross-border transactions.
INNOVATION AND INCLUSION
In the Middle East, mobile network operators are transitioning from closed-loop networks, enabling consumers to make open-loop payments in-store, online, and across borders, which according to Williams, is a promising trend. “Payment facilitators are making efforts to include small and medium merchants by offering low-cost acceptance solutions, empowering them to transition from face-to-face to online transactions,” he adds.
Acknowledging education challenges and lack of access as the primary speedbumps to financially inclusive societies, Williams says the ambition has always been to “develop solutions tailored to local market needs.”
He cites establishing innovation centers in Dubai and the upcoming one in Saudi Arabia as part of Visa’s efforts to drive financial inclusion, partnerships with mobile network operators, and initiatives like alternative lending and credit programs to provide unbanked and underbanked individuals with access to financial products. He says financial education and literacy programs to ensure long-term inclusion are crucial to sustainable socio-economic development.
There are vast gaps for innovation in the region for financial inclusion.
“When we examine the statistics, we find that approximately 67% of the population – over 100 million people – are unbanked, which presents a significant opportunity for us to address their needs and promote financial inclusion. By leveraging these opportunities, we can make a tangible impact and drive positive change in this region.”
DRIVING SUSTAINABLE CUSTOMERS
When it comes to sustainable finance, what is a critical barrier that the payment industry needs to address?
“Sustainability is undoubtedly a generational challenge that we must address and solve,” says Williams. However, it also presents an opportunity for the industry to respond to consumer demands.
“We have been actively engaging with our clients and collaborating on sustainability initiatives. We issued a green bond and allocated $500 million towards creating sustainable operations for our payments business.”
The crucial aspect is to raise consumer awareness about their spending behavior and its implications for sustainability, he adds.
“Our approach involves offering carbon calculators that estimate the environmental impact of individual spending, serving as the first step towards raising awareness.”
The second step is to reward customers for changing their behavior.
Additionally, empowering individuals to take action is the third aspect. “We strive to bring vetted and validated solutions and programs to our customers, enabling them to contribute to tree planting or invest in sustainability efforts, ultimately making a tangible impact.”
Admitting that cultivating an environmentally conscious consumer takes work, Williams says, “It’s an ongoing journey that we are committed to.”
Sustainability solutions are in high demand, and they make good business sense, attracting environmentally conscious consumers and contributing to customer retention.
“It’s one thing to develop solutions that we think consumers might want, but it’s another to bring solutions to the market that consumers are actively seeking,” says Williams.
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