Those relying on legacy payment system might find themselves left behind.
Michael Fyson, Director of Stratus said, “Australia’s payments industry has the strongest take-up of contactless card payments of any country in the world, putting more pressure on financial institutions who are running on legacy systems to review their capabilities to keep up with the change of pace.”
Earlier this week, at the Sydney innovation Hub, Stratus Technologies and the ACI Worldwide came together to talk about the importance of having resilient and up to date payment systems.
Geoff Tunbridge, Director of Solutions at ACI Worldwide stressed the importance of resilience of your payment systems.
“Resilience is the foundation of how you build trust with your customers,” Tunbridge said.
Having an outage with your payments resilience can be an impact on the trust in your organisation.
He said that in his hierarchy of needs pyramid the first layer needs to be security.
“It might seem strange to talk about resilience and security together but if you have weaknesses in your security, you will get hacked.”
This why security then becomes a selling point for the business and their customers.
Tunbridge also emphasised that having some friction in the system is not a bad thing if it part of the security process and it protects the transactions and the consumers involved in the transaction.
“Don’t assume everything has to be frictionless, it’s not breaking down every barrier, and if we look at what’s coming with GDPR and as we get the legislation in Australia around open APIs and the customer data requirements there—you have the obligation around putting some friction around data,” he explained.
Privacy and Innovation
Katie Heathcote from Austrade said that in the payments and innovation space Australia is a pendulum between privacy and innovation and they need to be wary of how far they swing either way.
She added that when it comes to the New Payments Platform (NPP), Australia has a strong framework but there is still a cost barrier on the platform for start-ups. The platform also needs further reach.
“It seems very domesticated and we need have to have stronger links internationally.” She said.
The local reach of the platform is connected with the fact that the development is aimed at local Australian banks which usually have a limited international presence.
Payments and Open Banking
Lynda Coker, Fintech Evangelist, who chaired the after-lunch panel discussion spoke about the value of the data flows that would be coming out of the NPP platform and the relationship with the open banking.
“I think that we can take learnings from the UK in terms of the rollout there. You’ve got PSD2 in Europe that obviously allows third parties to access customer information.” She said.
The UK has experienced some challenges with their open banking regime. Heathcote said that there has been a big trust factor and questions of why data needs to be handed over in the first place.
She also identified the challenge of compliance with the UK banks who have been delaying and then being fined for delaying.
“July next year, it would be interesting to see the uptake from a consumer’s point of view. “
She anticipates an interesting impact on the payments and the open banking space.
Christian Wigstrom, head of payments at MoneyTech said that it is difficult to see NPP and Open banking as two separate things.
“It is only half the solution I think to have NPP. It’s like you have this amazingly fast car and you're still on a dirt road.”