There seems to be a lot of activity in the world of payments. Sadly, not all of it is encouraging and some of it seems more than a little confusing.
Microsoft has announced that Microsoft Wallet is to be retired at the end of February, according to an almost invisible announcement on their site. The company will continue with Microsoft Pay however, based on its partnership with Mastercard.
Meanwhile, in the US at least, there seems to be bad news for contactless technologies offered by smartphone vendors. Both Apple Pay and Google Pay are used by only 14% of shoppers, even though the technology is widely supported by the vendors themselves.
Instead, banks such as Chase seem to be gaining ground rapidly with contactless technology.
Meanwhile across the Asia Pacific region digital payments are growing rapidly, with China being the largest adopter of mobile payments technologies and some reports even stating that Australia could become the first cashless society within the next five years or so. In fact, China may be in an enviously strong position as its approach is one of partnering with technology ecosystems rather than going it alone as a large financial institution.
Meanwhile, a start up funded by Peter Thiel called Petal has just received a second round of funding and 100,00 potential customers are lined up to join. Petal takes a slightly different approach to the traditional Know Your Customer process by using AI to produce a spending and usage profile which Petal then uses to help in the decisions about whether to lend money to a customer.
It is likely that banking and payments solutions will remain regional for the foreseeable future. The differences in cultures and banking regulations are too large to allow, for instance, American payments company to make much headway in China, where QR code transactions are the most popular.
There is, too, the question of what impact a tech slowdown will have on payments players. Already under pressure because of the increased risk from fraud, data breaches and the like, a slowdown will double that pressure. The investment in the payments ecosystem is already rising dramatically because of the increased security risks and this will impact customer risk assessment as well.
In a sector that has enjoyed more than its fair share of innovation, it seems a little harsh that if a slowdown hits then it will be the big players who will survive and thrive. This might mean that innovation in the sector slows too.
Of course, that might suit the big boys perfectly. We will keep watching.