Asia is ahead of Europe, North America on payments innovation – survey
INDUSTRY executives worldwide found Asia as the global leader in payments innovation, ahead of Europe and North America, says a report.
According to a report by Enterprise Innovation, the biennial “Global Payments Innovation Jury 2017” report found that small markets such as Hong Kong, Malaysia, and Singapore are rapidly modernizing their payment infrastructures as they look to become major players in fintech.
Of the 70 members of the Innovation Jury comprising senior industry executives from 37 countries, 64 percent of them agreed Asia remained the leader in the field as the region’s countries were “leap-frogging” the legacy of the infrastructure of many card-dominated developed markets.
Although Europe was lagging behind Asia, the continent considered to be a more innovative region than North America, Africa, and Latin America, the jurors found.
In Asia, Africa, and the Middle East, jurors believe the biggest opportunities came from consumer payments as there were fewer issues with legacy systems and the increased market for untapped consumers with the rise with mobile penetration.
The survey, which was sponsored by ACI Worldwide, was organized by fintech and payments adviser John Chaplin.
The majority of jurors, or 73 percent, identified Application Programming Interface (APIs) as important enablers of innovation. The APIs were seen as having a significant role in payments development as in-app payment becoming an increasingly popular trend along with transactions from IoT-enabled devices, the report said.
Fourty-four percent of the jurors also found considered forming partnerships with start-ups as the optimal innovation model for established payment firms, and 19 percent believed acquisitions of start-ups was a valid path to greater innovation.
“Established payments players, especially financial institutions, see an imperative to innovate as the size of the global payments market increases across multiple geographies – it’s clear that payments companies should not see nimble start-ups as a threat, but rather as a partnership opportunity,” ACI Worldwide senior vice-president Paul Thomalla was quoted as saying.
“Trends in payments and fintech, such as Open APIs, are converging to create space for new market entrants as well as for incumbents to retain or grow their market share.”