Payments innovation is mostly focused on the acquirer ecosystem. However, payment networks are also in a position to innovate alongside issuers or directly with end customers.

1. Payment Networks’ Blue Ocean
The innovation agenda
May 2015
Abhishek Dadoo
adadoo@gmail.com | +65 83807077
Disclaimer: The thoughts and views in this presentation are purely my own and in no way affiliated to any other party.

2. Agenda: Increase transactions on the payment network
BAU
A
I
C
BAU: Business as usual
A: Preferred payment network for Acquiring channels
I: Preferred payment network for Issuing banks
C: Preferred payment network for Customers
Innovation: Payment Network APIs
RISK LOW MEDIUM MEDIUM
REWARD MEDIUM MEDIUM HIGH
INNOVATION
LED BY
ANALYTICS
BUSINESS
MODEL
PRODUCT
DEVELOPMENT

3. A: Become preferred network for Acquiring channels
e-com
Payee
brick &
mortar
peer
Card Payment Channels
• Digital Payment Gateways
• Software based wallets
• Swipe physical card
• NFC based physical card
• NFC based mobile wallets
• Software based wallets
• NFC based mobile wallets
• Software based wallets
Mature channels
1. Business Model (APIs)
2. Ecosystem (Hardware)
1. Business Model (APIs)
Note:
• Software based wallets can be enabled via
mobile or desktop / browser or native apps
• Anyone with a captive network of users can
deploy a software based wallet to facilitate
payment options for its users (e.g. Macy’s,
Facebook, Venmo)
Note:
• NFC based mobile wallets can be open or
closed. (e.g. Open: Android Pay | Closed:
Apple Pay, Samsung Pay, Google Wallet)
Payment Network Innovation

4. I: Become preferred network for Issuing banks
1. More revenues from cards
• Customer segmentation based on
spending patterns and ability to
proactively recommend segment
specific debit/credit/pre-paid
products
2. Improve customer relationship |
experience | stickiness
• e.g. Customer has booked a flight
ticket to Spain. Offer information
about in-network ATM’s to the
customer
• e.g. Customer has booked a movie
ticket at XYZ Mall. Offer information
about nearby card specific deals.
Payment Network
InnovationWhat banks want
1. Analytics (APIs)
e-com
brick &
mortar
peer

5. C: Become preferred network for Customers
e-com
Payee
brick &
mortar
peer
What customers want
• One credit/debit card vault
and tokenization platform
across the ecosystem
• Card vault linked mobile
wallet across the ecosystem
• Discover nearby deals
• Shop recommendations
• Pay via mobile wallet
• Mobile wallet linked to
messaging networks (e.g.
WhatsApp, FB Messenger,
WeChat, Line) AND
phonebook.
1. Product Development
• Mobile Wallet & App rolled into
one - leverage the same APIs
as used for Issuing banks and
Acquiring channels.
2. Ecosystem
• Large installed based of “open”
NFC readers at brick & mortar
stores
• Large app installed base
Note:
• Apply Pay is expected to open up to
third party apps in late 2015.
Payment Network Innovation

6. Conclusion: There are blue oceans across the chain
BAU: Business as Usual
A: Preferred payment network for Acquiring channels -Innovation led by Business Models
I: Preferred payment network for Issuing banks -Innovation led by Analytics
C: Preferred payment network for Customers -Innovation led by Product Development
REWARD
RISK
I
A
C
BAU
Most probable path to innovation Nirvana for payment networks