First Published on 24th January, 2019
Payments are going digital and the increased speed of adoption is being driven by multiple factors. These include an abundance of new electronic payment methods—many of which are layered on top of existing payment methods—focused on convenience, speed and the overall consumer experience.
According to a recent report, Key Trends in Digital Payments Markets and Strategic Infrastructure, developed by The Initiatives Group and sponsored by Equinix, the key trends currently shaping digital payments markets around the world are:
· Real-time payments (To date, discussions about real-time payments have been dominated by the core functionality—speed, availability and rails on which money is moved, together with the challenges associated with their implementation. However, conversations are now shifting towards value-added products and services that an enhanced infrastructure will allow financial institutions (and others) to bring to market);
· Regulatory interventions—often focused on streamlining digital payments (regulators are seeking to capture the economic efficiencies embedded in electronic transactions, and to drive increased competition and innovation by opening up customer banking data to third parties. Regulators are also continuing to scrutinize and assert control around the costs associated with electronic payments, to ensure that their widespread adoption is not hindered (and related efficiencies gained), and there is transparency in pricing (with consumers and businesses able to make valid comparisons);
· Open banking—potentially bringing new players into the arena (As with real-time payments, open banking will facilitate the creation of new products and services, driven by regulation and enabled by advances in technology. While this will continue the commoditization of transaction banking, it also brings new opportunities to add value through data).
The study highlights that the handling of the payment, the ability to recognize returning customers and cross-linking potential offers need to happen fast, securely, and efficiently be delivered locally to users. It is critical to choose an interconnection and co-location provider based on its ability to reach all target users, interconnect the required cloud and payment partners, and integrate the required payment rails and governance controls.
Download the report – click here
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