Editor’s note: The payment technologies space is one of 2015’s hot areas. Zooz is an innovator in this space. Its solutions include a data-driven platform that connects all payment components and lowers transaction costs and the Zooz Omni-Channel Generator for enterprise retailers for online and offline payments. In this interview of Zooz CEO Oren Levy, he discusses trends and the future of payment technologies.
Q: What are the top three ways payment technologies will change in 2015 to meet customer demands?
Oren Levy: The transition from 2014-2015 has been marked by a major focus on mobile payments and the emergence of technologies such as Apple Pay and Samsung Pay, as well as the yet-to-launch CurrentC.
Although the jury is still out on whether mobile payments will replace credit cards in the near future, this focus is reflective of the consumer demand for a seamless experience across retail channels. Mobile payments represent one technological approach to actualizing omni-channel retail, enabling consumer recognition, personalization and effortless payments online, in-store, and over mobile or, more recently launched, wearable devices.
Another approach that is developing to maximize consumer experiences and brand loyalty is data-driven technology. Such technologies make the cross-channel customer journey more seamless, using data from every customer touch point to improve future experiences at any channel.
Three examples of data-driven technologies in the payments space are (1) location-based beacons offering personalized sales or in-store navigation assistance, (2) Web analytics for e-commerce optimization determining at which point consumers are abandoning online checkout and (3) customer profiles created through the consolidation of consumer data from numerous sources.
Another driver of how payments technologies are evolving is the objective of addressing consumers’ needs locally and globally. Technology providers aim to enable advanced reach for merchants globally and easy consumer access to merchandise regardless of region. With e-commerce, consumers can now access retailers worldwide and make purchases across borders; but not every merchant is equipped to meet the unique needs of international consumers when it comes to payments.
New technologies enable merchants to offer more payment methods suitable for various international markets. For example, a number of mainstream solutions integrate mobile wallets such as Alipay or Yandex so that consumers in China and Russia, respectively, can pay with a payment method that they feel comfortable using.
Q: Is the proliferation of mobile devices a big driver of change in payment technologies?
Oren Levy: It really depends on what global market we’re talking about. The proliferation of mobile devices is certainly an enormous driver of change in unbanked societies. But in the United States, the EMV (EuroPay, MasterCard and Visa) liability shift is impacting the direction of payment technology development.
Q: Is the adoption of mobile payment technologies at a similar level in other countries as it is in the United States?
Oren Levy: Many regions of Asia and even Africa have been using different forms of mobile payments, such as Alipay in China and M-Pesa in West Africa, for some time. Similarly, for many European and Latin American shoppers, mobile wallet solutions such as Russian Yandex, Brazilian Boleto, and Swedish Klarna are familiar solutions that have been in use for years.
Although the United States pioneered mobile payments with the inception of PayPal, it has not yet emerged as a key developer or adopter of mobile payment solutions.
Q: I assume that privacy regulations, currency volatility and other challenges in cross-border transactions cause lower adoption. Is that correct?
Oren Levy: The challenge and focus now is creating technologies that merge the mobile payment solutions of each region so that shoppers from any country can pay with the payment method that suits their needs, without worrying about currency conversion rates and cross-border regulations. Solutions currently in development seek to resolve regulatory concerns and offer international payment flexibility.
Q: Security issues are currently a hindrance to adoption of some new payment technologies. What are vendors doing to resolve this challenge? And what is happening with integration of biometrics in payment technologies?
Oren Levy: Vendors in the United States are likely to launch hardware in anticipation of the switch to the EMV standard in order to cut down on card-present fraud and better protect consumers and merchants from the threat of data breaches.
Many technology providers are also integrating tokenization into their security offering, which makes credit card details more difficult for fraudsters to decrypt and protects consumer information. As tokenization becomes more widespread, it is becoming a security standard among payment technology providers. Emerging U.S. mobile payment solutions Apple Pay and Samsung Pay employ payment scheme tokenization standards, and this technology is also being integrated by European solutions.
Biometrics are also being integrated as a security technology to identify users, the most successful use case being Apple Pay. A French bank, Carte Bancaire, also recently announced a biometric solution for securing e-commerce transactions using voice recognition technology.
Q: Use of cryptocurrencies and cashless mobile payments are increasing but still not widespread. What are the issues in this area?
Oren Levy: One hindrance to cryptocurrency adoption is that, because cryptocurrencies are not regulated, they often draw less savory audiences.
It is important to stress that, like mobile payments, cashless payment adoption rates vary by region and country. Some populations, such as the Japanese, have been using contactless mobile payments for years. Mobile wallets are still a new technology for American consumers and are being adopted more gradually as larger, more widely recognized technology providers like Apple and Samsung enter the field.
Q: How does the adoption rate for payment technologies vary among large, midsize and small companies?
Oren Levy: There are many off-the-shelf solutions available for smaller companies offering basic optimization. However, larger companies, which have the resources to implement change, tend to integrate more sophisticated platforms.
Q: Do expectations or requirements for payment technologies differ per vertical industry?
Oren Levy: There is not a significant difference between the customer expectations across vertical markets. Consumers are most concerned with the user experience; it should be quick and seamless and cater to their individual needs whether online or in-store.
Q: For companies that adopt new mobile payment technologies for their customers, how much does this change their business process?
Oren Levy: Companies integrating mobile payment capabilities for their customers are impacted by the additional data resources these solutions provide, which better equips them to provide more seamless customer experiences. Customers appreciate the ability to pay faster, as well as being recognized at every channel, while benefiting from the robust security offerings of the different mobile wallets. The data, security and personalization benefits all lead to an improved experience for the customer as well as the merchant.
Q: Besides Apple Pay, which software companies are currently the biggest disruptors in the payments space? How do you expect this landscape to change over the next 12-18 months?
Oren Levy: The most significant disruptors in the payments space will likely be global e-wallets such as Yandex, Boleto and Alipay (for Russian, Brazilian and Chinese markets, respectively) as well as similar solutions emerging in the United States – namely Apple Pay, the recently launched Samsung Pay and Google Wallet, with its recent Softcard acquisition. It will be interesting to see how these e-wallets develop and gain traction and adopters.
Oren Levy is CEO at Zooz. He is an experienced professional with over 15 years’ experience in payments, commerce and global business. Prior to Zooz, he was an executive director at Brookline (USA) for 11 years, managing its worldwide sales efforts and strategic partnerships initiatives. Before Brookline, he held marketing, business development and technical positions at BATM, Fundtech and L.G.E.S.