Were you to have been asked that question some years ago, the answer most likely would have bee “I’m not sure”....
Legacy Payments systems – what is their future?
I have a rusty old bicycle tucked away in the back of my garden house. I look at it with warm affection, remembering those bygone days when it carried me around the heather-scented countryside of Brittany in northern France as a teenager.
I dream of pumping up the tyres and hitting the road again, but in reality I know the brakes won’t really work, the pedals will make an awful grinding noise, and the chain will slip across the gears as I push down on each stroke.
Legacy payments systems are a bit like my old bike. They will get you there, and you know what grinding noises you’re likely to get along the away, even if you do need a team of staff along the route to retrieve the wheels as they come off rolling down the hill unaccompanied, the wheels can be put back on again and your destination will eventually be reached.
Many legacy systems will endure in this manner simply because everyone is comfortable with them and they know when they do; they’ve built up and invested in a team of expert developers and enhancers who know how to fix them. They spend so much time fixing and retrofitting mandates that there’s never enough time left to innovate or provide what business is desperate for them to do. The system and the resources in the organisation can become almost indispensable as a core cog in the large machine. In the end the service offered to their end-users and consumers loses its edge and new disrupters come into the market threatening their very existence.
One of the great pleasures of being a part of OmniPayments is the fact that they innovate, all of the time. It’s not simply an innovation mantra that is recycled each meeting, but a fact of life.
OmniPayments remains one of best known secret payments companies on planet earth. Clients who struggle to find the bespoke payments services that they are looking for, eventually realise they need a nimble flexible organisation to help them get their service to market quickly and efficiently.
There are so many innovations and demand pulling at banks today, it’s difficult to know where to invest their time. Let’s consider a few of them? What are we doing about P2P Payments? How can I offer Instant Payments to my customers? How do I adapt my systems for Open Banking and OpenAPIs? How do I meet with all these GDPR regulations? What will ISO20022 bring me? How do I open my service to e-Commerce, m-Commerce and other channels? How can I speed up customer onboarding and reduce the costs of attracting new customers? How can become a more digital bank? Do I need my own eWallet solution, or should I join a consortium? What happens if we just still to the knitting and focus on what we are good at? What are we doing about biometrics?
The list appears to be never ending. We should perhaps look for guidance outside our own industry. There are those organisations that innovate, reinventing themselves continuously to ensure they remain relevant for the new world. Any let’s not fool ourselves that the world is in some state of semi-permanence; it’s really not. The world is changing all the time, but we do like to think there is some element of predictability about it.
Companies like Whitbread, who started out making beer, and what a fine tipple they made. Whitbread now longer has anything to do with beer, making their contribution to society through the sale of Costa Coffee around the world, and the Premier Inn hotel positioned at the budget niche of the market, where there was a gaping hole of customer demand.
Conversely there is Kodak, which still exists somewhere, but which once ruled the world selling rolls of film and development services for all those with a personal camera. They saw the change coming, invested large amounts in preparing for the new world of digital cameras but still struggled to make the shift in time.
If there are lessons in this, it’s that at some point industries cannot remain dominant forever, without making themselves relevant in the modern world. Looking ahead the world of payments may not need a plastic card at all; it’s just an identifying token, a bit like my drivers license. The last time I used that was to sign up for a new bank account, asking me to take an in-app photo of the license as part of the bank’s KYC process.
Which brings me to KYC, or Know-your-customer. This is all going digital too, just like film went digital. Want to apply for a house loan? Do I really need to supply 3 months of utility bills, bank statements, photocopy them umpteen times and email them for all to see? Not any more.
The future is visible for all to see. Identity will be provided in digital form; KYC at a corporate level and consumer level will be conducted digitally and electronically without the customer concerned ever having to lift a finger.
Which remind me. One final thought. How are my merchant customers facing down the threat of online commerce, the Amazon’s of this world? What is their business model going to look like in 10 years, and how will they be handling their payment acceptance?
OmniPayments is helping clients meet these and many other challenges, from its rapid time-to-market OmniCloudx payment-as-a-service, its biometrics authentication, its P2P Payments infrastructure, its eWallet and Immediate Payment solutions.
Worth a look?
That old bicycle has to go.