FinTech Connects... with Nick Kerigan, Managing Director, Future Payments, Barclaycard
This week we bring you an interview with advisory board member Nick Kerigan, MD, Future Payments, Barclaycard. Nick leads Barclaycard's innovation strategy. In this role, he is responsible for driving innovation globally across the Cards and Payments businesses, creating customer and commercial opportunities from the rapid changes in payments. Here he gives his thoughts and predictions for payment technology in the months ahead.
What do you see as the key trends in payment technologies in 2019?
The key payments trends to watch this year are the continued shift from cash to electronic payments, the growth of invisible payments, the proliferation of pay-as-you-use services, and the growth of IoT and connected devices.
I’m also keeping a close eye on how businesses implement the ‘strong customer authentication’ requirements of PSD2, both with their customers and also internally. Looking ahead to next year, I’m excited to watch the impact that 5G will have on payments, and on consumer experiences more broadly.
You predicted last year that 2019 will see the mainstream adoption of invisible payments; how do you see that evolving?
Consumers are increasingly looking for ways to increase speed and convenience in their daily lives, often prioritising options that minimise their time and involvement over price. Invisible payments take advantage of this, removing the need for to physically pay for transactions – everything is taken care of in the background, digitally. People are becoming increasingly comfortable using invisible payments in their daily lives, and I predict that they will only get more popular in 2019.
Take for example, the recent announcement that Amazon plans to open 17 new cashier-free Amazon Go stores in the coming months, almost trebling the number of outlets in the US. And then of course there’s Uber, the on-demand transportation network linked to customer accounts, which has become part of everyday life for so many.
What are Barclaycard doing in this space?
Barclaycard has been trialling its own solutions, in partnership with Fintechs, to explore how to simplify the payments process across different sectors and provide value-added services to our clients. Last year we piloted ‘Dine and Dash’, which allows restaurant-goers to pay automatically for their meal, and leave once they were finished, without even having to ask for the bill.
And while consumers value the convenience of invisible payments, we know that they also want to be in control of their spend. Hence we’ve invested in a range of card controls in the US and UK, and are piloting digital receipts in partnership with Flux, one of the startups that came through the Barclays Accelerator.
How do you see the Pay to Use economy changing over the next 12 months?
Recent years have seen a shift in consumer priorities, moving away from the desire to own products and services, and instead simply wanting to be able use them. Combined with households tightening their belts, this has meant that consumers are now much more inclined to rent out or subscribe to services, rather than to buy them. We’re already seeing this with the rise of car-sharing services such as Zip Car and Turo.
In 2019, I’m confident we’ll see more businesses try to apply the ‘Pay to Use’ model in new sectors and with new products, taking advantage of consumers’ desire for more flexibility.
Interoperability seems a buzzword at the moment; do you see a convergence between payment software and the proliferation of IoT devices?
Absolutely. With IoT and smart appliances becoming more mainstream, retailers are marketing everything from connected doorbells to smartwatches – opening up opportunities for many different payment touchpoints. As we move into 2019, we expect to see more companies explore how they can combine payment capabilities with IoT devices.
The introduction of 5G will also play a role, with lower latency speeding up the communication between IoT devices. We’re not far off being able to pay for fuel by pressing a button in your car....
How do you see the challenging relationship between convenience and safety evolving?
From a regulatory perspective, the biggest change that will impact the balance between convenience and safety is undoubtedly PSD2, in particular the ‘strong customer authentication’ (SCA) requirements.
In particular, businesses that accept online payments will need to invest more into their online customer journeys, or they risk seeing a rise in basket abandonment, with more customers dropping out when they reach the authentication stage.
Businesses paying other businesses may also need to change their behaviour. For example, in the past it might have been more convenient for a boss to give their secretary their corporate card to book their business travel. However, after ‘strong customer authentication’ comes into force, that won’t be possible. At Barclaycard, we offer technologies that can help smooth this transition, such as virtual cards, enabled by our market-leading B2B payment platform.
Nick will be joining us for 2019 in the PayTech Connect stream – learn more about PayTech Connect here.
View the FinTech Connect 2019 website to find out more