The initial perspective on the Future of Loyalty by MasterCard kicked off the Future Agenda 2.0 global discussions taking place through 2015. This summary builds on the initial view and is updated as we progress the futureagenda2.0 programme. www.futureagenda.org

1. The
Future
of
Payments
Insights
from
Discussions
Building
on
an
Ini4al
Perspec4ve
by:
MasterCard
on
How
Payments
are
Helping
to
Shape
the
Future
of
Commerce

2. Context
The
ini4al
perspec4ve
on
the
Future
of
Payments
kicked
off
the
Future
Agenda
2.0
global
discussions
taking
place
through
2015.
This
summary
builds
on
the
ini4al
view
and
is
updated
as
we
progress.
Ini4al
Perspec4ves
Q4
2014
Global
Discussions
Q1/2
2015
Insight
Synthesis
Q3
2015
Sharing
Output
Q4
2015

3. Big
Data
Opportuni9es
Most
of
the
opportuni4es
big
data
can
offer
have
yet
to
be
fully
exploited.
The
reality
is
that
there
are
different
chunks
of
data
that
are
collected,
stored
and
managed
in
mul4ple
ways.

4. Bricks
and
Clicks
Is
omnichannel
just
a
buzz
word?
How
important
is
the
consistent
shopping
experience
across
channels?
What
is
the
future
of
physical
stores?
Can
bricks
keep
pace
with
clicks
or
is
it
in
fact
the
other
way
around?

5. The
End
of
Cash?
All
the
evidence
suggests
that
the
use
of
cash
is
in
decline
across
the
globe.
Cash
takes
4me
to
get
at,
is
riskier
to
carry,
and
by
most
es4mates,
cash
costs
society
as
much
as
1.5%
of
GDP.

6. Enabling
Financial
Inclusion
With
many
organisa4ons
now
making
financial
inclusion
a
priority,
it
is
likely
we
will
see
a
significant
por4on
of
the
2.5bn
unbanked
adults
armed
with
electronic
payments
products
in
the
future.

7. Personalised
Shopping
In
ten
years
you
can
expect
to
walk
past
a
shop
and
your
mobile
will
receive
meaningful
and
personal
no4fica4ons
on
discounts
or
deals
in
store
that
you
are
likely
to
buy
based
on
your
shopping
preferences.

8. Omnichannel
Access
You
may
be
able
to
order
online
and
pick
up
at
the
store,
order
at
store
and
arrange
delivery
online,
get
similar
offers
across
channels
and
yet
have
the
same
payment
op4ons.

9. Growth
of
Mobile
Point
of
Sale
In
the
next
ten
years
there
will
be
a
global
acceptance
of
electronic
payment
products.
We
are
nearly
there
with
Square
and
iZele.
Such
is
their
success
it
is
expected
that
by
2019
46%
of
POS
terminals
will
be
mPOS.

10. Mul9-­‐factor
Authen9ca9on
Mul4-­‐factor
authen4ca4on
will
become
the
norm...
authen4ca4on
itself
will
become
more
secure
as
biometric
technology
from
hand
geometry,
via
face
recogni4on
and
fingerprints
to
iris
recogni4on
become
more
mainstream.

11. Cross-­‐Border
Commerce
Cross-­‐border
commerce
is
growing
faster
than
domes4c
commerce
and
so
will
become
increasingly
important
and
influen4al.
Cross-­‐border
flow
of
goods,
services
and
finance
could
increase
threefold
to
$85
trillion
by
2025.

12. Low
Value
Payments
One
area
that
is
likely
to
see
significant
transforma4on
is
low
value
payments
-­‐
everyday,
high-­‐frequency
purchases
for
which
cash
is
used
(typically
sub
$10
transac4ons)
and
make-­‐up
the
bulk
of
cash
transac4ons
today.

13. MiData
In
the
future,
customers
will
retain
full
ownership
of
their
own
consumer
data
in
machine-­‐readable
format,
which
they
then
opt
to
share
with
merchants.
Some
customers
will
hire
‘personal
data
managers’
to
make
this
easy

14. Unbundling
of
Payments
Value
Chain
Greater
compe44on,
new
innova4ons
and
changing
regula4ons
will
mean
that
the
current
value
chain
will
spread
out,
removing
steps
and
so
reducing
costs
for
both
consumers
and
suppliers.

15. Changing
Customer
Expecta9ons
Customers
will
expect
different
things
from
their
payments
experience:
instead
of
just
‘security’,
there
will
also
be
a
need
for
greater
individual
control,
flexibility,
choice,
efficiency,
convenience
and
“good
fric4on”.

16. Prolifera9on
of
Currencies
People
will
increasingly
use
mul4ple
forms
of
currency
in
different
contexts:
alongside
na4onal
legal
tender,
we
will
see
more
local
and
crypto-­‐currencies
–
many
decoupled
from
exis4ng
systems.

17. Regula9on
of
Services
A
new
regula4on
model
will
emerge
in
the
payments
world.
Whereas
to
date
regulators
have
focused
on
“defini4ons
of
en44es”
their
role
will
shik
to
being
more
about
“regula4on
of
services”
and
wider
alignment.

18. Transac9onal
vs.
Emo9onal
Seamless
payments
will
distance
consumers
from
understanding
monetary
value.
Brands
will
have
to
reconsider
the
way
they
connect
to
customers
providing
more
holis4c
and
emo4onal
value.

19. Seamless
Ubiquitous
Payments
The
ability
to
‘transact
anywhere’
with
integrated,
sophis4cated
authen4ca4on
such
as
biometrics
increases:
More
contactless
technology
and
a
convergence
of
standards,
enable
global
informa4on
exchanges.

20. Integrated
Global
Governance
Regula4on
to
support
global,
regional
and
local
transac4ons
will
increase.
A
set
of
global
integrated
standards
and
governance
for
payments
will
emerge
to
which
key
regulators
and
merchants
all
sign
up
to.

21. Evolu9on
of
Security
The
need
for
physical
security
reduces
with
demise
of
the
use
of
cash.
In
its
place,
more
secure
digital
solu4on
plamorms
pervade
with
a
consolida4on
of
iden4ty
and
payments
into
an
ecosystem
that
includes
crypto-­‐currencies.

22. Reduced
Human
Control
We
see
a
world
where
most
connected
devices
can
be
used
for
payments,
more
people
will
be
financially
included
and
there
are
more
automated
payment
choices
and
channels.

23. Device
is
King,
Consumer
is
Queen
Whether
on
devices
or
in
the
cloud,
our
digital
repositories
will
know
who
we
are,
where
we
are
and
what
we
redeem.
Businesses
need
to
understand
these
new
intermediaries
and
how
they
define
our
rela4onships
with
their
brands.

24. Tension
with
Regula9on
Some
regional
regulatory
interven4ons
protect
consumers
whilst
others
prevent
innova4on
by
limi4ng
use
of
new
technologies.
A
power
struggle
between
brands
and
government
emerges
around
wider
data
sharing
and
use.

25. The
Composite
Consumer
Flexible
digital
iden44es
allow
consumers
to
connect
with
each
other
even
as
they
connect
with
brands.
Loyal
rela4onships
will
be
made
not
just
with
individual
customers
but
also
with
families,
couples,
and
groups
of
friends.

26. A
Systema9c
View
Policy
makers
from
around
the
world
will
have
to
look
at
the
problems
of
wealth
crea4on
and
wealth
inequality
in
a
more
systemic
way,
with
the
use,
for
example,
of
a
complexity
framework.

27. Data
Darwinism
Data
is
a
new
form
of
power:
Corporate
consolida4on
places
data
in
the
hands
of
a
few
who
are
able
to
dictate
terms
above
others.
Governments
correspondingly
have
less
power
as
they
have
less
access
to
key
data.

28. Seamless
Data
Representa9on
Improvements
in
the
way
in
which
data
is
visualized
and
presented
leads
to
rising
consump4on
and
wider
use.
In
turn,
we
see
greater
efficiencies
and
benefits
for
individuals,
companies,
governments
and
society
as
a
whole.

29. Trust
and
Integrity
of
the
System
As
more
individual
control
and
simplicity
is
sought,
how
will
the
privacy
con4nuum
evolve,
will
tokenisa4on
diminish
security
concerns
and
do
we
know
what
trust
will
mean
in
the
future?

30. Free
Banking
from
Non-­‐tradi9onal
Players
Innova4ve
business
models
-­‐
underpinned
by
changing
technology,
consumer
demand
and
Governments
pushing
for
cheaper
or
free
banking
-­‐
open
the
doors
to
new
entrants
from
outside
the
sector
that
break
old
monopolies.

31. Compe9tor
Collabora9on
Wider
collabora4ons
change
the
payments
landscape
with
credit
card
companies
partnering
with
merchants,
MNOs,
and
new
entrants.
These
partnerships
share
infrastructure,
increasing
consumer
u4lity
and
choice.

32. Digital
Regulatory
Regions
With
learnings
from
successes
in
East
Africa,
autonomous/sovereign
regulatory
authori4es
come
together
to
create
con4guous
digital
regulatory
regions
that
span
geographic
borders
and
boundaries
and
lead
to
payments
convergence.

33. Mobile
Currency
Convergence
Ambi4ons
for
convergence
of
payment
types
is
accelerated
by
the
crea4on
of
seamless
mobile
consumer
experiences
that
unite
mul4ple
cash-­‐less
stores
of
value
including
a
range
of
tradi4onal
and
alterna4ve
currencies.

34. Financial
Inclusion
Driven
by
Payments
Companies
Improvements
in
financial
educa4on
for
the
mass
are
driven
by
the
payments
industry,
not
governments.
Predica4ve
algorithms
protect
consumers
by
reducing
their
ability
to
over-­‐extend
themselves
with
cheap
credit.

35. Future
Agenda
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