Global trends in retail payments

Abstract

It is an exciting time for the payments business. Change is omnipresent. Old business models are under attack, and new ones are developing. No one 30 years ago could have ever envisioned the progress that the payments industry has made. It was nothing less than a revolution and was driven in no small part because of technology advances in microprocessors, software and communications. A new industry that now includes financial service providers and third-party processors has evolved. MasterCard is now a publicly owned company. The number of communication providers and third-party service providers has grown exponentially, while the number of financial service providers is decreasing. But there are some things that do not change. The first is the need to exchange value, ie the ability to pay for something. The second is the ability to gain access to credit and liquidity. Today, there is a plethora of payment activity under way that could create another sea-change in the near future. As technology takes quantum leaps, the future becomes much more uncertain. Change will occur in the payments business, and it is going to happen at a rate that cannot be imagined today. This paper is primarily US focused but pulls in examples of payments innovations from Europe and Asia.