Skrill’s Nilesh Pandya, COO, believes that banks can cash in on the digital payment evolution. Skrill, a rebranding of Moneybookers, is an e-money issuer in the UK and an eWallet platform.
“Digital payment providers are growing and evolving, fast. The developments involving mobile are changing the way consumers spend their money. They are not a threat to the traditional banking systems though, and offer a number of opportunities. In all sense digital payments are the future of both business and banking,” says Pandya.
Nilesh Pandya looks at the changing payments ecosystem in Europe and sees the growing influence of mobile. A recent study the Futures Company estimates that the majority of British consumers will be using their mobile phones to make purchases, pay for their bills and manage their bank accounts by 2015, he says. He also points to the example of African countries where mobile payments are standard.
Another obvious trend is the widespread use of online payments, now multiplied by smartphone use. “As a global trend, we are moving to a world where more and more customers are making transactions online, driven by smartphones and faster mobile broadband turn the simple mobile phone into a powerful internet access device, with an increasing universe of online companies that the consumer is unfamiliar with and does not know enough to trust,” says Pandya.
These two trends could appear as obvious threat to traditional financial institutions but Skrill’s COO believes they are an opportunity. “Using a digital wallet does not change the fundamentals of making a payment – consumers still have the choice of paying with their debit cards, credit cards or straight from the bank accounts. The digital wallet ensures they do so in a convenient and safe way. This is what drives some fundamental shifts,” he says.
Moreover, “As more and more transactions move from the off-line world to online, consumers are increasingly leveraging on the banking infrastructure rather than cash when paying with their digital wallet, which means that the volume of transactions for the banks also increases”
Pandya also praises the benefits of digital payments in helping businesses expand globally. “So, not only are digital payments helping businesses expand globally,they are opening up entirely new markets via unbanked and underbanked economies and facilitating rapidly increasing transaction volumes for both online merchants and the global banking networks. Which really seems a win-win situation for everyone.”
To read Nilesh Pandya’s commentary in full click here.