Sibos 2018: Businesses pushing banks to enhance small value mobile payment
Banks have to enhance their competitiveness and technology capability by making tech investments to capture opportunity in areas such as small value mobile payment
Sibos 2018 Sydney - Despite relatively limited revenue generated from a single transaction, small value payment is expected to thrive on the back of increasing adoption of mobile payment.
"We have seen a large number of low value mobile payments. Although each transaction is small, they do not generate less revenue, compared to large payment amounts," says Jennifer Boussuge, treasury fulfillment, service & operations executive at Bank of America Merrill Lynch.
"Businesses increasingly desire to use mobile payment and smaller value payments," she adds, speaking during a panel discussion at Sibos 2018 Sydney, entitled 'Re-engineering international payments for a fast, digital age'. As the leading payment company in China, Alipay processes a multitude of small amount payments each year, which requires a robust risk management and fraud detecting system.
"For last year's Single's Day, our fraud loss rate was one out of one million, meaning that one dollar was lost in every one million dollar. And this is the lowest compared to any other banks," says Clara Shi, senior managing director, head of Financial Institution Strategic Partnership Dept, International Business Group, at Ant Financial. According to Shi, one mission of Ant Financial is bringing unbanked customers to the financial system. In line with Alibaba's B2B model, which links small businesses, Ant Financials provides payment and collection solutions to small merchants, a large proportion of which are small value transactions.
Facing stiff competition from fintech companies, banks are looking to enhance their own technology capability by making more tech investments and collaboration with fintech companies.
"Banks need to change the business model to stay competitive. Clients are revisiting the way they work. If banks understand their clients then they can offer more tailored solutions." says Philippe Henry, global head of corporate, financials and multinationals banking, at HSBC "The future of payments is about collaboration and partnerships." agrees Molly Shea, senior vice president and global manager, global money transfer, Asia Pacific at Western Union.
As fintech companies expand globally, opportunities have arisen for local banks with a local license and existing customers. "To grow our local business, we always look for the right local partner," says Shi.
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22 Oct 2018