FinTech Connects with...Ed Adshead-Grant, Bottomline Technologies
This week we bring you an interview with Ed Adshead-Grant of Bottomline Technologies. With over 20 years experience in the payments industry behind him, Ed drives the strategic development and execution of Bottomline’s payments segment for the EMEA line of business. He’s well placed then, you might say, to give us his two cents on the shape of the payments space in the coming year.
As headline sponsors of PayTech Connect 2019, Bottomline Technologies help organisations to better power and protect their payments and financial messaging. Through efficient cash management, automated workflows for payment processing and bill review, state of the art fraud detection and behavioural analytics, Bottomline service corporations and banks around the world.
What do you see as the key trends in payment technologies in 2019?
Focusing on the UK, the biggest areas of change will likely come from the Open Banking and New Payments Architecture (NPA) investments in Overlay Services. Other industries like telecoms and utilities have already moved to this ‘Over The Top’ or ‘Third Party Provider’ model. This will inject an ongoing source of innovation into the traditional payment value chains.
Organisations are moving into two camps. One treats the whole Open Banking movement as compliance where you follow the minimum written requirements, and the second camp is digging into some creative interpretation of the new rules, to produce genuinely new offerings and new markets.
Some of the more inventive uses of Open Banking, which we have not seen or thought of yet, will start to emerge in 2019. The backbone of Open Banking will support the NPA changes ahead, where everything is assumed to be real time and accessible at any time from any device.
How will New Payments Architecture (NPA) overlay services disrupt the payments infrastructure in the coming year?
The NPA overlay services will roll out across the market participants at different paces. The expected liability shift for the fastest growing areas of fraud like the Authorised Push Payment (APP) fraud will help accelerate the adoption of the Confirmation of Payee initiative (where the recipient of the funds matches the name held on the bank account). Once one bank has completed the work, the loss of any fraudulent activity will switch to the participant who is not ready.
This creates a sense of momentum once the Confirmation of Payee starts to roll, where laggards will want to join the system or be left prone to unnecessary losses. It is important that banks find the time to implement these changes to modernise the infrastructure.
Does the advent of Open Banking APIs spell the beginning of the end for payment cards?
I see these co-existing for many years, but the welcome innovation around Open Banking will start to surface a number of useful use cases throughout 2019. Cards have been around in the UK since 1966, and will come under pressure with the direct access to bank accounts under the new Open Banking rules. The cost economics can be significantly different for a business accepting cards, moving from a typical percentage charge for cards to the lower cost of a few flat-rate pennies for banking rails.
Some of the retailers with big ticket items will be interested in the annual savings that can be achieved, giving the consumer choice on how to pay possibly with a new industry of incentives and loyalty campaigns to avoid higher fee card networks.
Strategic Treasurer’s fourth annual “Treasury Fraud & Controls Survey Report”
What implications does PSD2 have for payment security and sanctions for corporates?
There is early evidence that corporates are starting to invest in their own in-house sanction solutions, to ensure they know where their payments are going. Many national legal frameworks across Europe already need the company to pay attention to where their payments are going and who exactly they are paying but the laws have been difficult to enforce.
With the Revised Payment Services Directive (PSD2) allowing corporates to bypass the traditional entry point into bank systems to initiate payments, I can see big push back onto corporates taking more responsibility on the legal checks. Banks will not just accept the risk of sanctions anymore. Corporates will struggle simply to point to their bankers as the checker of last resort and liable for completing transactions initiated by the corporate.
How do you future-proof payment solutions in the constantly evolving climate?
The most important habit is to scan the industry horizon to help make sustainable, rolling plans for your market solutions. Many payment organisations are too busy running the day to day workload of the growing market that they miss out the ‘heads-up’ moment to see what is emerging.
The majority of technology is consumed over cloud today, which means that the capacity planning and compliance typically drop to the service provider who has to be fully confident in the outsource service. The mastery of API technology and the ISO20022 standards are key to stay relevant in an increasingly fast world, so the ability to link to partners in the industry is both easy and meaningful in terms of adding tangible value like associated documents and invoices to a payment.
What do Bottomline see as their main opportunities in 2019?
We are spending time working out the various Account Information Service Provider (AISP) and Payment Initiation Service Provider (PISP) models that are emerging. We have over 10,000 corporate customers and SMEs in our UK portfolio, so we are looking to create better processes and problem busting solutions to help the way businesses pay and get paid.
The Open Banking changes have the power to transform the current workflows of commerce significantly. We are also spending time in understanding and building out the New Payment Architecture in the UK which creates a new journey for our customers to help them compete and reduce any opportunistic fraud. The Overlay Services such as Confirmation of Payee and Request to Pay will have major roles to play in the payment industry for many years to come, with a number of Data services expected to follow fast on the roadmap.