Asia still top dog for payments innovation but Europe gaining ground

Based on a survey of 70 execs from 37 countries, the Global Payments Innovation Jury table sees Asia crowned champion again – a position it has held since the inaugural 2008 Jury. The continent scores 64% of the vote and while the “China effect” is significant, there have also been innovative developments in the likes of South Korea, Singapore, Japan and Malaysia.Notably, for the first time in nine years, Europe has leapfrogged Africa, North America and Latin America to take second place in the ranking.

Says John Chaplin, chairman, Global Payments Innovation Jury: “While Europe has never been rated favourably for payments 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 we are starting to see that consumers are more willing to give new financial service providers a go.”

In developed markets, such as Europe, a big majority see B2B investment as more likely to generate good returns than B2C, citing the consumer expectation that payment services should be free and the major marketing investment required to build a substantial user base.

However, in markets such as Asia and Africa, the sheer size of the population still without access to formal financial services makes the Jury lean more towards B2C (56%) than B2B (44%).

Addressing top industry trends, three quarters of the Jury believe that APIs are going to play an increasingly significant role in the payments market over the next three years.

“Payments are often a source of friction and that means lost sales for retailers and frustrated customers. Using APIs it is much easier to integrate payments into apps so that transactions become almost automatic,” says Chaplin.

Meanwhile, DLT is seen as the most over-hyped payments innovation. Says Chaplin: “While the Jury believe that distribution ledger technology can deliver real benefits for the overall financial services business they also consider that many of the claims made about its applicability to retail payments are over the top.”