Visa: Fundamental transformation of payments is round the corner

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28.06.2017 10:40:52 Page views 958 views

Interview with Kamran Siddiqi, Group Executive - Central & Eastern Europe, Middle East & Africa (CEMEA) at Visa.

Kamran Siddiqi, Group Executive, Central & Eastern Europe, Middle East & Africa (CEMEA) at Visa
Media: PLUS magazine

  1. What is the situation in the payment business regarding Visa in the region you are responsible for?Which countries’ markets are developing most actively and which have reached their ceiling? Which general trends are happening in the region?

    Kamran Siddiqi.jpg We are benefiting from very strong secular tailwinds moving us towards faster and ubiquitous adoption of electronic payments, brought about by technological advances and a general acceptance that electronic payments are better than cash – more reliable, more secure, and more convenient. According to Euromonitor in 2016 global electronic payments globally surpassed cash payments for the first time. However, that growth, while universal, is not evenly spread, with some markets seeing more rapid growth off lower bases. Africa in particular is under-penetrated with a lot of growth potential.

    If we speak about the Russian market, there are several trends that are very interesting to highlight. First of all, it’s an increase in total spending on cards. In 2013, electronic payment transactions accounted for 20% of all transactions, at the end of 2015 this was already 27% and in 2016 it reached more than 30%. This means that in 3-5 years’ time we can forecast a rise up to 40% and more, near the global average. By 2020 or even earlier, we could achieve numbers that are almost double what we saw in 2013. Another positive trend for us is that people are getting used to paying cards in general. We can say that judging by rising number of electronic transactions and the fact that the average check is becoming smaller. That means that more transactions are being made in the category of day-to-day expenses. People are paying by card everywhere they go – in shops, in restaurants. And this trend is very optimistic and positive for us.

  2. At the St Petersburg International Economic Forum in 2015 you said that the global payment community is inthe early stage of apayment transformation. How far have we managed to advance? What are the next steps fordevelopment in your view?

    A number of factors are driving change in payments. I mentioned mobile devices and the way that consumersare using them more in commerce environments. More than that, the Internet f Things, or connected devices in general, are going to drive commerce in ways we couldn’t imagine previously. Being able to order milk using your fridge. Pay for parking or fuel automatically from your car. Point of sale devices are becoming anything and everything. Data and its use to understand consumers and help retailers and banks offer more targeted and more relevant offers in real time is another factor. A third is the use of APIs – the ability to connect different platforms for innovative new solutions. We believe that innovation comes from anywhere, and Visa is therefore opening up its network to developers, banks, merchant and other partners to enable them to build solutions off of our network.

    All this is giving rise to what we call omni-commerce – the concept that consumers will move seamlessly between applications or devices, in both online and in store environments, in any location, and expect a seamless and secure payment experience. That’s a really exciting prospect and it’s round the corner.

  3. What is Visa’s role in all of this change? How is Visa keeping up with innovation?

    foto2.jpg We have seen these changes coming and have been working to ensure these changes are as reliable, safe and beneficial for everyone in the digital world as they have been in the physical world.We are offering the payment ecosystem – financial institutions, device manufacturers and technology companies – the tools and services that help deliver secure, fast and reliable payment services across diverse commerce experiences. In May 2016,Visa  opened a new almost 400-square-meter innovation center in Dubai, following the success of Visa’s flagship innovation center in San Francisco and with the recent opening of the Asia-Pacific innovation center in Singapore.The new innovation center already serves as a hub for Visa technologists, clients and partners to collaborate on the future of payment technology. It makes it possible for every client to be involved in the innovation process, experiment together and cooperate.

    We are building new partnerships with organizations we haven’t been deeply connected to before – government innovation labs, telco operators, data companies, software companies, in order to collaborate and co-create. We are investing in companies that are exploring Blockchain technology and exploring its use in a commercial environment. And we have opened up APIs to enable the world to innovate off the Visa platform for more locally relevant solutions. We aim to be as relevant in the digital age as we have been for the past fifty years or so.

  4. How acute is the relationship between innovations and security systems?

    Security has to be built into innovation from the start. We look at security as enabler of innovation.  In the case with Apple Pay, for instance, they came to us first, saying we need to work with them and it’s where tokenization began to function – a big phenomenon of the world today. Tokenization keeps card details very secure. Every time a transaction is processed, a new 16-digit number is generated. This removes the need for card details such as the card number, and the expiration date. Tokenization itself is a very good solution for what we call “card not present”, remote transactions. Tokenization can be used with any app. That’s what we did with Apple Pay and Samsung Pay and we see how these innovations gain momentum.

  5. What is Visa doing about the brand preferences of consumers? What does this mean?

    The Visa brand is one of the most recognized and trusted in the world and Visa assesses how and where it is deployed so that its use contributes to the growth of electronic payments, our clients and merchant partners’ businesses, and the Visa network itself. People should never have any doubt that they can trust paying with Visa, that it will be secure and safe. So our biggest efforts are linked to this and we do not want to do things that devalue or threaten our brand because it is a valuable asset that our partners and clients value, and that their customers trust. We use our global sponsorships and brand to promote electronic payments growth for our partners and the markets we serve. We are proud to have been a worldwide partner of the Olympic Games since 1986.The Visa brand transcends cultural, language and geographical barriers and unites everybody as a sign of reliability and leadership. Visa has also been a worldwide partner of FIFA since 2007. Through sport, we connect with the preferences of our cardholders and try to provide them with the best possible service.

  6. What are the challenges and future outlook for the Russian market? What is Visa’s role in bringing innovative technologies and cash conversion to market?

    foto3.jpg Russia has challenges that are unique to this market and many opportunities. It is not as open as it once was, and we have a new government-backed competitor. Competition is actually positive because it gives consumers choice, and also stimulates players to drive growth and innovation. However regulation needs to be applied evenly for the market to remain competitive.

    As for opportunities, with more than 130 million Visa cards, Russia is, and continues to be, an important market for Visa. It has huge potential for the development of electronic paymentsas 75% of spending is still in cash. One way to increase cashless payments is to give clients a product that meets their needs. In other words,to make usingpayment cards more convenient and easier than cash.We could mention again contactless payments, which are good for the customer and great for the merchant. We are trying to make sure we continue to expand acceptance of this type of payment. Atthe moment we have very good acceptance in Moscow and St Petersburg, but we are working on acceptance acrossthe rest of Russia as well. The upcoming FIFA Confederations Cup 2017 is a very good chance for us to expand access. Onsite at the FIFA Confederations Cup 2017, Visa will be preferred payment method and will deploy more than 1600 point-of-sale terminals.  For any non-Visa cardholders, there will be multiple payment solutions available onsite. We are currently working with FIFA to ensure the payment process offers the best experience for all fans.

Journal:  PLUS Journal 5 (240) 2017

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