Global Payments Business – Challenges and Opportunities to Banks

The global payments industry is experiencing the digital disruption and opportunities across regions; it is in a state of fundamental transformation. Digitization of banking, digital-wallets, and surge in e-commerce acceptance are driving the growth in retail payments. However, the traditional corporate payment which is non-cash payment transaction type still is the major contributor to the global payments revenue. To take advantage of the opportunities offered in the global payments business, banks have to act fast and embrace the new age payments technology.

Key themes influencing these advancements are:

New Age Technology: Non-bank payment platforms are distrupting the global payments landscape with m-payments and e-payments. E.g: Globally most or all major e-commerce platforms has enabled digital wallets to improve customer experience.

Changing Customer Expectations: With increased internet and smart phone penetration globally and consumer preference towards digital payments are fuelling growth in non-cash payments market. Which also challenges the legacy payment methods to innovate.

Changing Global Demographics: Europe and Americas non-cash payments were high, but Emerging regions like APAC, South America and Africa non-cash payments are growing to outpace the developed markets soon.

E-commerce & Online Security: Migration of many retail brands to online market places to grow revenues; enhanced online security are increasing the consumer confidence on e-commerce spending.

Growing Impact of Regulation & Industry Initiatives: European Unions revised (PSD II), EMV adoption in US, Real Time Retail Payments intiatives, Pressure on Cards Interchange Fees, Merchant Acquisition Fees, NFC, SEPA, Virtual Currency Regualtion are all driving positive growth in payments market

Disruptive Non-Bank Payments Platform Providers

Payments were a service traditionally provided by banks, are now provided by innovative non-bank payment providers, who are rapidly gaining ground in the developing/emerging markets and among under-banked demographic segment. Technological leapfrogging can be clearly seen in the developing world, where traditional payments infrastructure is lacking. Paypal, Alipay, Western Union, MoneyGram, M-Pesa, Bitcoin and Prepaid Wallets are few examples which disrupted the payments business globally:

• Paypal is fast growing number of customers globally for payments, also partnered with international e-commerce providers for Cross Boarder e-commerce inclusion. Alipay and Paypal continue to dominate as most preferred e-wallets types globally.
• Western Union and MoneyGram are the largest remittance payments providers globally, where the banks have huge potential to tap in.
• M-Pesa has demonstrated success in Kenya by providing payments services for un-banked customer segment and recently entered Europe.
• Prepaid Wallets like Paytm, Mobikwik, Freecharge, and PayZapp are widely used for payments in e-commerce, taxi booking, mobile recharge, bill payments, travel ticket booking, and movie ticket booking.
• Apple Pay, a NFC based payment technology has potential to grow with improving technology infrastructure landscape in retail outlets globally
• Bitcoin provides a unregulated payments propositions

Non-Cash payment instruments such as cheque, Debit Cards, Credit Cards, Prepaid Cards, interbank electronic transfers, cross boarder electronic transfers, and pre-paid mobile wallets are all targeting revenue growth aiming to replace physical cash handling in the long term.

Expected Competition from Technology and Social Media Companies

Global Large technology and social media companies such as Apple, Amazon, Google, and Facebook are eying opportunities in payments business; by providing secure and straightforward payment options they can leverage and monetize millions of customers who already use their non-payment offerings. Clearing houses, network solution providers are also posing challenges to banks in the form of changing the way the multi-currency capabilities are delivered and impacting the value proposition of traditional correspondent banking models.

The tech savvy generation is taking leadership in global commerce, who are very familiar with social media and e-commerce are expected to adopt new age technologies to run their business.

Tapping the Opportunities in Global Payments Business

Banks have not been the quickest to respond or adapt to new technological advancements or customer expectations but this is the time to wake-up and respond to remain as key players in payments business.

Payments will not remain as utility products from banks in the future, there should be value addition. Successful payment providers will be those:

•  Taking payments business into banks strategic growth priorities and devising a market specific payments business strategy that recognizes the unique needs, character, and evolution of payments business

• Identify and penetrate the lines of business where payments are prominent

• Target high-growth and traditionally under-served customer segment

• Adopting and upgrading the technology infrastructure to deliver services and solutions in-line with customer expectations

• Partnering with disruptive technology providers, social media companies, to enable access to technology and new customer base

• Position themselves for increasing cross border and global nature of payments through multi-currency offerings

• Targeting global remittances business aimed at high-growth economies such as Middle East, South Asia, and Africa

• Constantly involve in pro-actively advising associations and regulators to shape the future regulatory framework

Definitions & Further Discussion:

E-Payments: Retail and travel sales; digital downloads purchased via any digital channel, and sales from businesses that occur over primarily consumer-to-consumer (C2C) platforms such as eBay. (Source: World Payments Report 2014)

M-Payments:  Form of payment where the mobile phone is used as a payment method–not just as an alternative channel to send the payment instruction – and the payment information flow takes place in real-time. (Source: World Payments Report 2014)

PSD:  Payment Services Directive

Figure: Global E-Transaction Payment Mix

• By 2017, alternative payment methods will account for 60% of all transaction, an increase from 43% in 2012
• 17% of global e-transactions were made using e-wallets in 2012, replacing that of credit and debit cards
• Cash on delivery will account for 2% of global e-transaction by 2017
• In 2012, 29% of e-transaction are made using non card methods in US and Canada, which was 41% in Europe, 53% in LATAM, 66%% in MEA
• Globally, Europe and US are relatively slow in the uptake of new payment technologies owing to the widespread existence of legacy technologies
• The developing markets such as Brazil, China and India are leading the way in adopting and innovating the new age payment technologies, given these markets are home to an increasingly middle class and mobile population who are tech savvy generations and more open to new ideas fueling demand for innovative, technology driven and easily integrated transaction methods.

PS: Kindly continue the discussion using the comments section.

Democratic re-thinking ! People are no more JOKE. Take us SERIOUSLY or Go Home.

8th December 2013, State Election Results

The above statistics say's it all. India needs leaders who take its people seriously.
We are no more JOKE to you politicians.

New duster which dust-off a driver’s unpleasant physical sensation on Indian road.

New duster which dust-off a driver’s unpleasant physical sensation on Indian road.

India has a new entry on roads to compete with existing SUV range of vehicles, the all new Duster from Renault.  Renault India has launched its Sports Utility Vehicle (SUV) Duster from Renault. Duster packed with premium features. We can say that luxury comes at competitive price.

Ex-Showroom Price Tags:

Petrol Variant:  Rs. 7,19,000 / Rs. 8,19,000.

Diesel Variant (83hp): Rs. 7,99,000 / Rs. 8,99,000 / Rs. 9,99,000.

Diesel Variant (108hp): Rs.9,99,000 / Rs.10,99,000 / Rs.11,29,000.

Features:

Cutting-edge technologies are included in very competitive price tags like Key less entry with answer back function, reverse parking sensor, on-board trip computer with multi functional displays, rear defogger for better visibility.

Duster comes with

·         16 inch aluminium wheels.

·         Double barrel head lights.

·         Roof rails.

·         Radiator grill – Chrome finish.

·         Muscular wheel arches.

·         Turning radius 5.2 m (less than even few hatch-backs on the Indian roads).

·         Variants with diesel power-trains and a power-optimized petrol unit.

·         Separate rear AC with independent control.

Engine:

Diesel variant will feature with

• Fuel efficient 1.5 K9K THP, cross rail diesel injection (dCi) diesel unit, which delivers 108 hp of power at 3,900 rpm and 248 Nm of torque at 2,250 rpm will balanced with  a 6-speed manual transmission collaboration.
• RxE & RxL diesel variants will come with 1.5 K9K THP, cross rail diesel injection (dCi) diesel unit, which delivers 83 hp of power at 3,75 rpm and 200 Nm of torque at 1,900 rpm.

Petrol variant will feature with

·         1.6 litre K4M power-train, 102 hp of power at 5,850 rpm and 145 Nm of torque at 3,750 rpm with 5-speed manual gearbox.

Mileage: 

·         Diesel Variant with 108 hp: 19.01 kmpl (Source: ARAI).

·         Diesel Variant with 83 hp: 20.45 kmpl (Source: ARAI).

·         Petrol variant with 102 hp: 13.24 kmpl (Source: ARAI).

Other Specifications:

·         Wheel base: 2,673 mm.

·         Capacity: 5 Seater.

·         Carrying Capacity: 1064 litre.

·         Boot Capacity: 475 Litre.

Safety:

·         ABS – Anti-lock Braking System.

·         EBD – Electronic Brake-force Distribution with brake assist.

·         Side impact beams.

Maintenance cost factors is not so clear. In terms of value for money – Renault Duster is worth a go. The economy lovers who want to drive a SUV for very long lime – here is your SUV. Pack and say bye – holidays will be easy with Renault Duster.

Golden Rules to Avoid Management Crises.

Golden Rules to Avoid Management Crises.

They raise the effective manager’s efficiency when they occur and after they occur:

1- To be a successful manager, you should identify individuals who are outstanding in their performance and behavior and seek to promote their skills.

2- To action can succeed without a definite time program, and a program of action without planning is impossible to implement. You should also place alternatives to avoid crises.

3- It is wrong to seek to solve all problems simultaneously. You should set priorities.

4- You should learn the most important thing about everything. Learn everything about the most important  things in your field of work.

5- To receive observations is part of the manager’s profession and it is proficient to be ready for them and deal with them and encourage, yet it is wrong to accept criticism or an opinion without making a comment or as a matter to be granted.

6- Your strength does not lie in power given to you by your superior. Rather, your influence lies in the acceptance you can get among your colleagues and supervisors.

7- The correct option in the wrong time and the wrong opinion in the right time are both bad and so are decisions.

8- You should expect pressures in work. A successful manager should reduce their effect on crisis occurrence, in cooperation with the team, discipline in work, creativity, high drive for achievement and overcoming insufficient time.

9- The issue is not to face problems, difficulties or losses and the aim is not to make profits or overcome rivals but rather in the final outcome: Is it or not to your benefit? Is this outcome to the benefit of the entity or not?

10- Believe it or not, the problem is not how to deal with the crisis but how to behave after its ends. What are the necessary preventive measures? What are the means and alternatives to resume activity?

The effective manager’s management behavior includes the following points:

•  Closing the door before crisis occurrence.
•  Reducing the opportunities for crisis occurrence.
•  Having indicators of crisis occurrence.
•  Expecting and monitoring signs of crisis occurrence.
•  Facing and reducing the passive aspects of crises and   acting    positively towards them.
•  Having the possibility of getting advantages from crisis occurrence.

Source: Extracted from various sources.