It felt as if everyone and anyone in the world of fintech was at PAY360 2024 this year, as the event hosted over 4,000 attendees. Held at the ExCeL Centre in London, PAY360 opened the doors for countless opportunities for networking and discussion about the latest and brightest ideas in payments.
With so many great discussions taking place at PAY360, it would have been challenging to hear the insights from the panellists over the noise of the crowd – but The Payment Association thought ahead. Every seat at every stage was provided with a set of headphones, meaning those wanting to hear from the most intellectual minds in the industry were able to fully immerse themselves in the fireside chats and panels.
With themes like payments, embedded finance, open banking, and financial inclusion (to name a few) all waiting to be addressed ahead of the two-day event, PAY360 kicked off with an opening keynote from Tony Craddock, director general, The Payments Association and Joe Garner, former CEO and advisor, author of Future of Payments Review.
Together Garner and Craddock explored the current state of payments in the UK, reviewing the lessons learned from around the globe and how the UK payments space is set up for the future.
Garner expressed his enthusiasm for the space saying: “When it comes to paying for goods and services in the UK, we’re as good as it gets – with digital wallets enhancing a world-leading experience. This is the same for paying for goods and services online too.”
Further delving into the hurdles the UK system has faced, Garner removed any complexities and highlighted the importance of resilience in a successful ecosystem: “Without resilience, there’s no trust and without trust, there cannot be innovation.”
Driving a Tesla on a cobbled road – what is the right way to checkout?
Payments have come a long way digitally. Long gone are the days of bartering or simply using cash to pay for things. However, while technology has come a long way, it is still setting out to achieve the same sort of transaction that was being accomplished without tech.
Exploring how payment preferences have changed to complete these transactions, Flavia Alzetta, CEO, NED, advisor moderated a panel including Vincent Belloc, vice president and managing director, PayPal UK; Alexei Jurascheck, head of payments technology, Tui, and Sergio Signoretti, chief financial officer, Lastminute.com.
Belloc noted how Gen Z’s payment preferences are massively aligned with social media. In fact, “71 per cent of Gen Z use social media to make purchases,” he explained. Additionally, he also pointed out the importance of merchants aligning with customer values. Forty-six per cent of users won’t shop with a merchant if they don’t align with their core values.
When it comes to the ‘right’ way to checkout, customers want a convenient experience according to Signoretti. However, he adds: “When we talk about convenience, it’s not just price or flash sales which customers are looking out for. It’s also about convenience in terms of a customer experience.”
Driving merchant adoption of open banking
Open banking’s development has seen its adoption rate spike across the UK. Nonetheless, some merchants have still struggled to implement the technology and use it to its max potential. Helen Child, founder, Open Banking Excellence took to the stage to moderate a panel including Heather Xiao, open banking expert; David Cox, payments strategy lead, Virgin Media O2; Mike Elliff, CEO, Payit by NatWest; Ian Morrin, head of payments and platforms, Tink and Stephen Winyard, director, Salt Edge.
Winyard tackled the issue of consumer habit adoption by explaining open banking’s use is never bad, but in some situations it shines more than others. From a merchant’s point of view, he explained that purchasing a coffee might not be the best use of open banking, but buying a watch worth over £10,000 would be the perfect use for it.
For Morrin, open banking works providing four key pillars have been considered. “Demand, availability, experience and trust all need to be present for the open banking payments flow to work.”
Eliff also praised the use of open banking by merchants as he explained the cash flow benefits that can be had. “As a customer, you don’t have to deal with bank details, and on weekends you don’t need to deal with invoices. Then for a merchant, you’re getting payments through instantly.”
Data powering everything
Tony Craddock, director general of The Payments Association, joined Charlotte Crosswell OBE, chair at the Centre for Finance, Innovation and Technology (CFIT), who explained how CFIT chose what areas to prioritise and focus on: “When Ron Khalifa published his report, he highlighted open finance, SME finance and digital ID.
“Now, when you look at that, ultimately data powers all of that. If we didn’t fix how to extend data beyond open banking, it would be quite difficult to solve SME finance. It was gonna be even more difficult to solve digital ID.
“So we decided to only keep to the three that Ron put in his report to start with, otherwise the governance around choosing them would’ve been all about who has the loudest voice. Whereas when we get going on the next two, three, four and five coalitions, we would expect them to run in parallel eventually and you’ll have different streams for different working groups.”
Necessary friction
The importance of friction during customer journeys also became a topic of debate in the afternoon; as a panel discussed their thoughts on the necessity of friction to ensure security.
Ed Metzger, VP of market planning payments efficiency at LexisNexis Risk Solutions, explained his belief that friction isn’t necessarily required at all: “PSD3 really delivers a lot of security without causing that much friction to the customers.
“It’s saying ‘when I make a payment, is this payment actually going to an account that’s owned by someone with the name that I put on the payment’. That’s a great example where you don’t have this dichotomy – you can offer a great customer experience and deliver security at the same time.”
Mitch Trehan, chief compliance officer at Allica Bank, also shared these views: “I was reflecting on strong customer authentication and I’d forgotten that was a thing at all. I used my HSBC app and it authenticates by thinking in the app, and using my face. Things that were friction aren’t anymore and have become part of the journey.
”I don’t think there needs to be friction. What there needs to be is processes designed with what is available and what the level of risk is – and you match that.”
Tulsi Narayan, SVP of security solutions and processing at Mastercard, also echoed this sentiment: “One important aspect is data sharing. Part of the reason fraud comes in is the lack of parity of data between two parties. When we see better quality data being transmitted from the merchant to the issuer, you can enable better scoring that the issuers can use to decide whether to step up or not.”
“Where there is no data, we see that step up happens 81 per cent of the time and where this data, you see a reduction of 26 per cent.”
