I’m have been very fortunate to have been invited to Visa’s Insight Live 2013 event. Insight Live is all about the trends in the payments industry, and attendees include the banks (Visa’s members), retailers and mobile network operators.
It’s difficult to do the event any justice in a single post, so this post here covers the first day. Also, because Endava has a stand at the exhibition, I was limited to the number of talks I could attend, so I tried to pick three of them, wisely.
In order to improve timeliness, here are the key points based on my quick typing during the sessions – please forgive any grammatical and formatting errors.
Opening Plenary – Peter Ayliffe, President and CEO Visa Europe
Peter Ayliffe gave the opening plenary. The video introduction was nothing short of outstanding, across three separate screens. Visa should put the video on YouTube in HD for full effect.
Here are some of the highlights of Peter’s speech.
- By 2020 50% of visa cardholders will be using a mobile device for visa payment
- The future of payments is about change, change, change
- Visa has double digit growth in revenue
- Fraud is at the lowest rate ever
- The Visa digital wallet (V.me) now available, as in the technology is in place
- Back to change… “we need to embrace the change”… banks, retailers and mobile operators
- There is pressure from the regulators to change the business model
- The barriers for new entrants are so low, which enables many new competitors
- The big Internet companies such as Google, Facebook, etc. are spending huge amounts of money in this area
Peter went on to describe the music industry, which itself has undergone huge change in the Internet revolution.
- The record labels used to control the whole industry enjoying massive margins
- Now there are over 70 major providers – Spotify, iTunes with the latter now the biggest music retailer – bigger than Walmart
- It was Napster that came along and changed the model
- Digital revenues are growing much bigger than physical
- Last year was the first year since 1999 that revenues for the labels grew
- The total revenue (the pie) has grown though – new opportunities from live events, merchandising, etc.
- That perfect storm is hitting financial services today
- The model is changing, Financial Services organisations are now in the information business
- Organisations should embrace the change, build a new eco system, and transition to a new model.
Peter said its vital all the organisations present don’t stand still, they need to keep innovating.
Why would a bank choose Visa? It’s low cost and European centric (remember that Peter is the CEO of Visa Europe, a separate company to Visa Inc. in the USA).
- 20% of Visa’s revenue is going onto the new eco-system.
- Visa is the enabler, the bank is the wallet brand
- Visa sees huge amount of information very quickly, but using the information is difficult, Visa is the most informational fortunate sector with data because of its visibility internationally and across retailers.
- Everyone in the ecosystem needs to help the retailers with more sales, help the retailers
- They needs to help track, analyse and improve. And help with marketing.
- Don’t ask the retailers to spend more money on advertising or promotions. Help them with revenue.
Peter finished by saying that this is the most exciting time to work in payments. “Change is exciting”. Great opportunities lay ahead.
“Seize the opportunity”.
Steve Perry, Executive Vice President, Relationship Management, Sales and Commercial Development
Steve started off describing why there weren’t just banks at the event, there were major retailers and Mobile Network Operators (MNOs) too.
- Visa can link the MNO with retailers
- In 1990 there was $60bn of revenue passed through Visa cards. Now it’s $60bn that every 10 days
- Visa is aiming for €1 in €5 in 2015 from the current €1 in €6.75
- In the UK its £1 in £3 are on Visa cards
- The USP of Visa is its scale, strength and sophistication
- For scale, it currently handles 1,500 transactions per second
There are two key challenges for Visa:
1. Innovate the business model. Work out how other sectors create value and price.
Look at the digital economy. For Google, 90% of their revenue comes from Pay Per Cick advertising. There can be no sale, yet there is still a charge to advertisers. In terms of charges, when buying a car – it costs around £25 for a single click, for a consumer to show interest (i.e. the consumer might not buy one).
Visa wants to provide targeted marketing offers. It needs to be no win no fee. No sale, no fee. Visa will create a marketplace for sales opportunities.
2. Convergence. The Internet is too complicated for users.
Many devices connect to the internet. We have credentials in different places. There are many different passwords, all with different criteria (uppercase, numbers, symbols, lengths). The user experience is too complicated. It takes 21 clicks on Steve’s digital banking app to find a balance. Visa will Follow the itunes cloud concept for the new ecosystem.
The mantra is SOLID:
- Open (for other products)
- Leading (market leading)
- Issuer branding (targeted marketing activities branded as the member bank)
- Dependable (the Visa brand promise)
Tech Trends – Adam Banks, CTO Visa Europe
David Rowan the editor of Wired magazine and Adam Banks, the CTO of Visa Europe, had a conversation on the stage about the key trends Visa see in the marketplace. These trends are published in a report due for release next Tuesday (and I will be able to review it then).
For the moment, here are the key points that I tweeted during the session:
David raised how there are now virtual currencies (such as BitCoin) as new challengers:
It was interesting how Adam Banks, the CTO of Visa Europe, saw how consumer devices are so key to the future – everything from the Raspberry Pi upwards:
On consumerisation of technology, do we need cards, or even card readers?
I’m reading The Intention Economy, and it’s revolutionised my thoughts of CRM and data. I’ll cover this separately. For the moment, the way Adam was positioning the value of Big Data, it is partly aligned to pro-consumer:
Technology has become so complex. I’ve covered this a few times, from the point of view of IT departments – multiple browsers, devices, etc. but it’s also confusing for users. Visa’s view is to make payments automatic, such as the London congestion charge, or Oyster top up (I just question whether this is any different to direct debit):
Some thought provoking comments about fraud:
The first day of the conference has been really interesting. I’ll cover tomorrow’s sessions as soon as I can. One thing is for sure – the payments industries recognises it’s in a rapidly changing market, and wants to change. How quickly it is able to do so, remains to be seen.