There’s a battle brewing between payments incumbents and innovators, Ben Hurley, senior director, mobile product management for Apriva, tells Mobile Marketing & Technology.
Hurley will be a panelist at the 2017 Mobile Payments Conference Aug. 28-30 at the Swissôtel in Chicago, Ill.
The incumbents are the very large banks and card issuers like Visa and Mastercard. They have broad, rich histories, capital to fall back on in lean times and have established the payment rails, Hurley says.
The innovators are the fintech-driven companies, the best example of which is cloud-based finance, offering loans to small businesses, and crowd mortgages, offering financing for homes.
“The innovators are changing how payments is being done,” Hurley says. “What they are doing today is taking over the lion’s share of the profit chain. They are doing more with platforms and APIs than the incumbents have done.”
The incumbents are missing the mark with complex infrastructures, while the innovators offer simple systems, Hurley adds. The innovators can also build on what the incumbents have already done, meaning the innovators don’t have as much investment in time or in money in development.
Hurley points to EMV as a payment system built by incumbents that has actually slowed down innovation due to its complexity.
He adds that the innovators are data driven, so while any profits they make on payments is slim or non-existent, they can derive additional revenue from the data they gather on system users.