The Domestic Payments Schemes Jury today releases its 2021 report titled: “To Survive or Thrive? Domestic Payments Innovation in the Pandemic” revealing that while many domestic payment organisations had to make some adjustments to their innovation programmes due to the pandemic, 36% reported that the pandemic had ultimately led to an increase in their innovation activities.
Undertaken in collaboration with World Bank and European Card Payments Association (ECPA) the Domestic Payments Schemes Jury is made up of 48 C-level executives from 40 countries representing a rich tapestry of national payment schemes and operators. The 2021 report, the sixth in a series spanning eight years, explores the impact of the Covid-19 pandemic on domestic payment organisations; from the rapid surge in usage and their responses, to the acceleration in innovation and the evolution of the regulatory landscape.
“In the face of unprecedented digital evolution in the last year the ubiquitous role of the domestic payments organisation has significantly changed. As card schemes, telcos, social media platforms and fintechs vie for market share, domestic payments organisations have to strike a balance between standing on their own two feet commercially while bringing their diverse national payments communities together,” Chairman of the Jury, John Chaplin, commented.
“This year’s Domestic Payments Schemes Jury has concluded that the best strategic response for domestic payments organisations in the wake of the pandemic is a programme of systemic innovation that delivers value-added services beyond their traditional card payments, and at the same time demonstrably supports public policy goals,” continued Chaplin.
Download the full report from www.innovationjury.com
Key findings:
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Despite steep declines in transaction volumes at the outset of the pandemic – nearly half (48%) of the Jury reported declines of more than 25% – 89% reported significant or full recovery of transaction volumes, helped in large part by the development and roll out of digital capabilities.
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While 52% of respondents had to make some adjustments to their innovation activities due to the pandemic, most reported that their programs remained largely intact and 36% reported that the pandemic had ultimately led to a further increase in their innovation activities.
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Supporting mobile and app-based services remains the biggest innovation priority for domestic payment systems (90%) with real-time account to account payments, enhancements to card services – such as QR codes – and digital identity all equally popular among the Jury (70%).
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The study showed that domestic payments organizations were well positioned to facilitate Covid relief programs in different markets, with the Jury reporting that two thirds of respondents (70%) were provided emergency support to government efforts to either contain the pandemic and/or manage the adverse effects on the economy.
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Diversification away from a single form factor and business model remains at the forefront of many domestic card payments organizations’ minds, with digital identity proving a popular option according to report contributor and industry stalwart David Birch.
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As market structures evolve regulators are facing increasingly challenging policy choices as new real-time services are introduced with a need to balance operating efficiency with competition and innovation. A such, the 2021 report also explores the role of regulators as domestic payments organizations increasingly move beyond purely supplying services to banks and expand to include fintechs, telcos and retailers, among others.
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The 2021 report also shows that many domestic payments organizations are becoming more international in their strategies, with nearly half (44%) now conducting activity in more than one country compared to 27% in 2015
