Asia Retains Payment 2017 Innovation Crown, While Europe Climbs Ranking for First Time in Nine Years
by June 21, 2017 11:02 am0
The Global Payments Innovation Jury identifies keyfintech trends in 2017
London, 21 June 2017: The Global Payments Innovation Jury today releases its2017 Report, revealing that while Asia remains home to most paymentsinnovation, Europe has leapfrogged Africa, North America and Latin America forthe first time in nine years.
TheGlobal Jury is a panel of 70 CEOs and senior industry executives from 37countries across 6 continents, making it the most global body to look intopayments innovation. Every two years, the Jury convenes to compile a globalresearch report into payments and fintech innovation trends.
Regionaldifferences
With 64 percent of the vote, Asia remains the clearleader in payments innovation, a position it has held consistently sincethe inaugural 2008 Jury and significantlyoutpacing the competition.
Chairmanof the Global Payments Innovation Jury, John Chaplin, commented, “This goes beyond a ‘China effect’. Many other countriesin the Asia region are modernising their payments infrastructures and creatingenvironments that support innovation.”
Notably, for the first time in nine years, Europe hasleapfrogged Africa, North America and Latin America to take second place in theranking.
“While Europe has never been rated favourably forpayments innovation in the past, the 2017 Jury sees real grounds for optimism.There is now a much more progressive regulatory environment in Europe,world-leading innovation hotspots have developed in London and Berlin and weare starting to see that consumers are more willing to give new financialservice providers a go,” said John Chaplin, Chairman of the GlobalPayments Innovation Jury.
B2B versus B2C
The 2017 Jury also explored which payment sector offersthe most profit potential for new business ventures. In developed markets, suchas Europe a big majority (76 percent) see B2B investment as more likely togenerate good returns than B2C, citing the consumer expectation that paymentservices should be free and the major marketing investment required to build asubstantial user base. However, in markets such as Asia and Africa, the sheersize of the population still without access to formal financial services makesthe Jury lean more towards B2C (56 percent) than B2B (44 percent).
“WhileB2C payments tend to get most of the industry airtime, the Jury think the smartinvestors in developed markets are mainly focusing on B2B payment opportunitiesbecause
ofthe better profit potential,” said Chaplin.
Growing importance of APIs
Addressing top industry trends, three quarters (73percent) of the Jury believe that APIs are going to play an increasinglysignificant role in the payments market over the next three years.
“Paymentsare often a source of friction and that means lost sales for retailers andfrustrated customers,” added Chaplin. “Using APIs it is much easier tointegrate payments into apps so that transactions become almost automatic. Theability to make transactions “disappear” was seenby the Jury as one of the most important enablers of innovation as more andmore payments come from mobile apps and Internet of Things devices.”
However, the Jury did not see APIs as a risk-freeapproach and voiced concerns about security risks and who gets blamed byconsumers when things go wrong.
Hype awards
As in previous years, the Jury picked out the area ofpayments innovation that they see as most over-hyped.
“The fact that an innovation is over-hyped doesn’t meanthat it doesn’t deliver benefits for the industry, rather that the claims madeare exaggerated. And hype tends to lead to misallocation of investmentresources,” explained Chaplin.
The Jury decided that distributed ledger technology winsthe over-hype award for 2017.
“While the Jury believe that distribution ledgertechnology can deliver real benefits for the overall financial servicesbusiness they also consider that many of the claims made about itsapplicability to retail payments are over the top,” added Chaplin.
TheGlobal Payments Innovation Jury Report 2017 can be read in full here: https://innovationjury.com/