Seeing Payments Innovations More Clearly: Takeaways from Money 20/20 Europe

If you’re like many brands, financial services firms, or even consumers, you’re on the lookout for the newest technology, trends, and topics. To address the rapidly changing payments landscape, hundreds of speakers and thousands of attendees descended on Copenhagen for Money 20/20 Europe, a look ahead for the payments industry.

Money 20/20 Europe is described as “a world-class experience for European innovators. It’s a catalyst for the growth and development of the payments and financial services ecosystem. Money20/20 organises the world’s largest events focused on payments and financial services innovation for connected commerce at the intersection of mobile, retail, marketing services, data and technology.”

Recapping the event, Money 20/20 Europe media partners CNBC and Business Insider’s BI Intelligence covered some of the latest news and innovations from the conference. We’ve highlighted some of the top takeaways below.

Startup Launches New Product to Recapture Lost Revenue from Failed Transactions

For every 100 transactions, around 85 of those card transactions are approved. The remaining 15 are revenue which is lost to the world’s biggest companies. While 10 of the 15 declined transactions are due to insufficient funds, the other 5 are caused by flaws in the system, due to the complex nature of clearing a card payment.

Dutch startup Ayden looks to help brands turn these losses into revenue using its RevenueAccelerate tool. A data-driven suite of automated tools, RevenueAccelerate converts wrongly refused card transactions into approvals, working in the background of each payment to drive authorization rates and accelerate company revenue.

Learn more about how this product helps organizations recapture lost revenue from CNBC.

Blockchain’s Future in Payments and the Mainstream

The backbone of Bitcoin, Blockchain technology has been making waves in the financial services and payments communities in recent years, and will continue to grow, according to Blythe Masters, CEO of Digital Asset Holdings.

“My view is that we will see this technology in various forms be deployed in a commercial setting in less than a couple of years. That doesn’t mean it will become mainstream in that time frame, I think that the time frame that it’ll take to get to be mainstream would be five to ten years,” Masters said on Tuesday.

Companies like Digital Asset Holdings, R3, and more have been working with banks and corporations to deliver the technology in areas from remittances to securities exchanges. At the moment, however, blockchain technology will need to overcome three hurdles, according to Masters:

• Uncertainty around regulation.
• The challenge of creating a network effect, having multiple parties having to agree on sharing infrastructure.
• The question of the creation of common standards, to prevent risk for an early adopter that “became the equivalent of Betamax when the rest of the world goes in the direction of VHS,”

For more, see WEX’s recent look into bitcoin and blockchain technology, and the full interview on CNBC.

Staying One Step ahead of Fraud

Payment companies need to collaborate, not compete, when it comes to dealing with the threat of card fraud. With the recent move to adopt EMV in the US, it is expected that card-not-present fraud will uptick, matching the numbers faced when European countries adopted the standards.

Answering the question, “What can we do to defeat card-not-present card fraud?,” a panel of experts discussed strategies to overcome fraudsters.

Top takeaways:

• Catherine Moore, MD and president, JP Morgan Commerce Solutions: It is important to look at the categories of fraud, as the industry needs to get “smarter” about analytics. She describes it as a “constant dance” as companies seek to eradicate the problem.
• Andrew Jamieson, head of innovations, UL: “There is a genuine risk and we have an asymmetric war on our hands. There is lots of money for the criminal elements, and while large banks have the resources they may lack the technological inertia to deal with it. For smaller banks, they may not have money but do have the desire.”
• Monica Eaton-Cardone, CIO and co-founder, Global Risk Technologies: “are the criminal masterminds doing this?” or is it case of “educating” the card holders about due diligence? Within the industry consumers are evolving with the technology and “we have to work hard to let them know” about issues and threats.

For more, See the Banking Tech article, Money 20/20 Europe: Collaborate not compete to defeat card fraud.

Continued Focus on Collaboration with Fintech

In a recent blog, we talked about how financial services firms will need to innovate, collaborate, or purchase Fintech firms in order to survive coming years. Money 20/20 Europe brought this even further into the light. Noted by World First, the impact of FinTech companies in disrupting the traditional financial order which has in turn created a large elephant in the room – what should banks do next?

With so many FinTech companies working within small, specialized segments of the market, the bank is seemingly under threat from all sides. To avoid the threat of being overcome, expect more chat and soul searching discussions this week about the role of banks and how they should respond to the Fintech challenge. Answers will be hard to come by, but collaboration rather than competition will become more common as we look to develop new products and solve infrastructure challenges.

Biometric Identity and Authentication

It’s been a trend for a while, but according to a panel discussion, the financial services industry could stand to pick up the pace when it comes to biometric innovations. A panel, “Biometric identity and its applications in financial services and payments,” said that the finserv industry has to keep up with the automobile industry or the computer sector when it comes to biometrics.

Virtual Reality

WEX recently covered innovations in virtual reality and payments, but a Money 20/20 panel discussion looked into the investment opportunities and hypotheticals in virtual reality, finding:

A Samsung Europe representative was quoted, “We are investing in virtual reality [VR] headsets and this is the next big thing. Samsung is piloting VR with banks because millennials don’t like going to branches.”

Looking forward, ideas were given such as, “VR for trade desks,” and “a space in Starbucks for people to engage with their banks in a novel way.”

For more, see the Banking Tech article on takeaways from day 4 of Money 20/20 Europe.

ATM Showcased without Screen, Card Reader or PIN Pad

Diebold Inc. showcased one of its newest mobile-driven banking concepts, along with a security application from Cryptera, at Money 20/20 Europe this week in Copenhagen, Denmark.

The concept ATM dispenses and recycles cash without a screen, card reader or PIN-pad, using the consumer’s mobile device as the primary interface.

The futuristic concept provides faster, more convenient consumer access to cash, the press release said. Features include:

• Bring your own device access — customers set up their transactions via the bank’s mobile app on their smart device;
• Consumer-recognition technology — offers instant access to cash through contactless, mobile-banking methods such as QR codes, NFC and iris-scanning biometric technology;
• Increased speed and security — with transactions initiated and authenticated on the consumer’s smartphone, the concept mitigates card and completes cash withdrawals in less than 10 seconds; and
• A small footprint — the terminal is nearly one-third (32 percent) shallower and more than one-third (37 percent) narrower than standard through-the-wall ATMs.

See more at ATM Marketplace.

More Resources from Money 20/20

• Money 20/20 Europe: KYC/ID, commerce disruption and femtech round-up
• Money 20/20 Europe: Data scientists are farmers and machine learning is statistics on steroids
• Reflections on Money 20/20 Europe
• FinTech50 unveiled at Money 20/20 Europe
• Ten Top Fintech Startups to Watch in 2020

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