Ixaris and Anthemis have released a report identifying global trends in payments innovation, and future opportunities and challenges for the industry. The Payments Innovation Jury Report 2013 centres around a Global Innovation Jury – a panel of 25 leaders in the payments sector from 14 countries and five continents which meets every two years. Members have all held executive roles at major payments organisations and many have had significant commercial success with their own payments companies. All jurors are still actively involved in payments. This is the third report based on their insight.

70 per cent of the Jury believes new market entrants are best at driving payments innovation. Asia will show the most innovation over the next two years with Africa, North America and Latin America close behind. Europe will lag behind. Adoption of smartphone and tablet technology is seen to be the biggest driver for innovation in payments (48 per cent) with open APIs another key trend. Cross-border remittance services are seen to be capable of generating the most profit over the next five years, although virtual and online payments come a close second

Four in five jurors believe the demand for integrated programmes for multiple payments products will be met by the use of open payments platforms. Meanwhile, the best way for financial institutions to approach innovation is to partner with companies with innovative solutions (39 per cent) or work with innovative start ups (34 per cent). Internal innovation is considered difficult within large institutions, largely due to legacy business models.

Over half of the Jury does not believe there is a strong business case for e-wallets to replace credit and debit card payments. Mobile payments technology will have more applications in developing economies rather than developed economies. Although mobile technology is seen as the biggest driver for payments innovation, mobile payments is overhyped. NFC/contactless payments are the most overhyped in this area, with e-wallets second.

John Chaplin, chairman of the Global Innovation Jury, comments: “Payments is now a crowded market. Riding on technology trends such as smartphones, APIs, and cloud computing, players from diverse industries are entering payments: tech giants, financial technology start ups and even mobile network operators are joining the traditional firms, making for an exciting and competitive landscape. While new products and services are springing up in many areas of payments, a lot of these innovations will inevitably disappoint their creators and investors. Before committing to a project, a company must consider whether it is really capable of delivering ROI. Payments is a sector with tremendous potential for revenue but innovators must be sure they are filling a market need – otherwise they are creating a solution in search of a problem”

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