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Summary

This year’s Money2020 conference is expected to be the biggest in the event’s history. As the payments world gets bigger and more players enter the market, it seems likely that much of the focus of attendees in Las Vegas will be on security and infrastructure issues. This contrasts with the “razzle dazzle” of new consumer-facing payment propositions seen last year following Apple’s entry into the US payments market.

Expect less glamour and more back-office technology

Crystal balls in payments are cloudier than ever. Few would have guessed 12 months ago that so many payment providers would be asking what is taking so long with proximity payments following the launch of Apple Pay in 2014. Now that the dust has settled and the market has a better sense of what the key mobile wallet players are doing, attention is turning to more “bread and butter” issues. Although less sexy, infrastructure and security technologies are increasingly understood to be critical to payments innovation in the longer term. These areas are likely to feature strongly at this year’s Money2020 event.

Ovum expects immediate payment technologies to be a major talking point this year. Even outside of regions with regulatory mandates for immediate payments and where the technology is being driven by major vendor plays, immediate payments is moving up the agenda as a means of insulating against disruption and generating new revenue streams. Growing numbers of vendors are keen to emphasize their experience in immediate payments and to bring real-time functionality to their existing platforms. The real-time capabilities of blockchain-based systems will likely also be a major part of the immediate payments agenda, as growing numbers of financial institutions publicly experiment with distributed ledger technology. Cryptocurrencies are rapidly shifting away from their libertarian hacker roots and moving closer to financial services respectability. Money2020 in 2015 is likely to be a major stage in this process.

Security technologies, ranging from EMV to CNP fraud detection and tokenization, are also likely to be high on the agenda. Although the US EMV liability shift deadline of October 1, 2015 has been and gone, the US is still racing to catch up on EMV and there remains major interest in cheaper stop-gap security technologies. The expected bump in other forms of card fraud is also expected to drive interest as online merchants seek to improve their security ahead of an expected deluge of fraud. The launch of dynamic tokenization services and associated commercial models by the major card networks is also creating the potential to bring payments to the Internet of Things and open a whole new front in payments innovation. As yet, tokenization remains little understood by many payment professionals and the key backers of the technology will all be attempting to position themselves in this nascent space.

Appendix

Further reading

Tokenization in the Payments Value Chain, IT0059-000027 (September 2015)

Ensuring security is the key challenge in emerging payments, IT00059-000005 (April 2015)

“US Faster Payments won’t be fast in arriving,” IT0059-000001 (January 2015)

Author

Gilles Ubaghs, Senior Analyst, Financial Services Technology

gilles.ubaghs@ovum.com

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