Digital Payment Innovation Raises Critical Questions

The recent Digital Money Summit featured presentations focused on payment innovation within the ever-evolving digital environment. Whilst innovative thinking was the focus, there were also fundamental questions raised around digital payment ecosystems. There were also many varied views with regard to the likely adoption of mobile payments by consumers and merchants in 2012 and beyond.

We are in a period of much change as organisations from small APP developers through to large companies like Google, innovate with consumer-facing technology. How disruptive? A recent Reuters article highlights the power of mobile applications at point-of-sale within the hands of consumers.

According to a Sydney Morning Herald article, Australia has the second highest uptake of smartphones in the world, and while greater payment convenience, simplicity and security is being placed into the hands of consumers, the paradox is that the payment ecosystem is becoming more complex.

The critical questions for players in the digital payment space include:

• Who’s responsible for protecting the customer and payment data?
• Who does the customer call when something goes wrong?
• How is interoperability achieved between the telco, financial institution, payment scheme and customer?
• How do we cater for multiple security requirements from the telco, issuer and scheme?
• How is interoperability achieved (i.e. TSMs, OS, SE)?

And of course, the over-arching question is – will consumers and merchants embrace this new payments experience and over what period?

We’re heading towards a tipping point and have a glimpse of what the future holds. Exciting times ahead.