Cherian Abraham, Experian Plc's Mobile Payments & Commerce Lead, discusses the growth of financial technology and the future of mobile payments with Sarah Gill, Senior Fintech Reporter with PaymentEye.
Sarah Gill, Reporter: I'm joined by Cherian Abraham, who focuses on commerce and payments for Experian. Welcome.
Cherian Abraham: Thank you, Sarah. Thanks for having me.
Sarah Gill, Reporter: FinTech generally is quite prone to sort of hype and sort of hype cycles. Do you feel like there are any segments that are getting a lot of attention without kind of basis, or you feel like it's kind of-- people are talking it about too much and probably not going to happen anytime soon?
Cherian Abraham: We've been talking about mobile payments for the last several years, right? And it still hasn't translated into something meaningful for the average Joe, right? I mean so my-- I don't ever think that my mom would adopt it. For my wife to adopt it, some of those things that have to be solved are security and privacy, not whether that is NF--
Because NFC, QR, Bluetooth are all things that we try to solve for, so that it can be adopted, so that we can drive scale and adoption and solve things for the merchant. But from a consumer standpoint, these are the two central tenants that have to be respected and solved for. And so for them, unless those are answered very clearly in a non-ambiguous way, we still are going to be talking about payments in smartphones for a long time before we see meaningful adoption.
Sarah Gill, Reporter: Do you think there will be a point where we stop calling it mobile payments, and it would just be payments?
Cherian Abraham: It will be, right? So even more important is that today there are 2 billion smartphones on the planet. By 2020 we're talking about 4 billion. So the needs of the next 2 billion customers, which are going to be in emerging markets, are going to be entirely different from the needs of the first 2.
And knowing that, and being able to build for those needs, and their needs to use a smartphone to do commerce or to make payments are going to be entirely different from the needs of the developed market. That's going to be very interesting for us to watch.
Sarah Gill, Reporter: And I think it's interesting. Because people talk about payments and mobile payments. But ultimately the solutions need to solve very localized needs, right? And they vary very much from region to region.
Cherian Abraham: Right. And they're very topical. And some of those will not come to be solved by banks alone, right? So when you look at emerging markets, M&Os play a very integral role. Facebook plays a very integral role. WhatsApp plays a very integral role.
It's not just scale and distribution, when you look at social networks and others. It's also that for some of these customers that's their only interaction with online. That's, for some customers in far reaches of the planet, Facebook is online, which is why I think it's very important. Because when you look at WhatsApp, WeChat, right? Messaging has intersected with not just payments which has already happened. But it's also intersecting with lending. So in China WeChat is now being used to make consumer loans.
Sarah Gill, Reporter: And insurance.
Cherian Abraham: Absolutely, right? So I think those things are-- so I believe, whether right or wrong, everything interesting in payments and commerce is not being done by a merchant, or it's not being done by a bank. It's being done by social networks. It's been done by the likes of Stripe and others, who are really laying down the rails for tomorrow's commerce. Which is incredibly interesting that what's happening, whether it's NFC or QR or Bluetooth.
Sarah Gill, Reporter: I mean do you think that social networks and sort of branded messaging platforms have a bigger role to play in payments? I know that they're gaining traction in Asia specifically.
Cherian Abraham: Right. And so to my previous point, right? As messaging intersects with payments and lending, they will have a much more bigger role to play, not just within person-to-person payments, but also commercial payments, as well as business-to-consumer payments. Those things will continue to evolve as social networks become more meaningful in terms of going beyond connecting people, but also have a role to play within commerce. I think we're still seeing very early days with that.
Sarah Gill, Reporter: I mean do you think that's true in kind of places like the US and the UK? I sometimes wonder if they have like a branding, kind of trust issue around getting people to put their payments on the platform, at least in the US.
Cherian Abraham: So here, because we have a very developed infrastructure when it comes to payments in banking, it may not be as easy or as adopted as we may see in other markets. But at the same time, when you're looking-- when you talk about putting buy buttons. So you look at Stripe's Relay platform in terms of being able to take your entire inventory and push it through any other channel, social media or otherwise. And being able to in real time manage it. Those are things that I would like for a bank to figure out, or a merchant to figure out. And it's not being done by either of those parties.
So I think that's the opportunity loss that I see from a banking standpoint that they're not clearly thinking outside of shoving a card into a phone, or shoving a card into a car (ph), and thinking really as what tomorrow's needs are with respect to commerce. And commerce isn't going to happen purely within the confines of a retail store, or even an online store. And it will happen where the customer is. And the customer is in Pinterest, Snapchat, Facebook and other places. And being able to translate those needs into the things that they can serve for their customer isn't something that's being-- still being defined within a bank or a retailer. So that's an opportunity loss.
Sarah Gill, Reporter: Do you see things as kind of mobile, maybe even wearables; do you see that as-- I think people are kind of keen to be like, oh, this is the card killer, or this is going to replace cards. But I mean in reality they're going to be around for a long time, right?
Cherian Abraham: Right. And so IoT is probably a very important theme of this conference. So when I look at the Internet of Things, and when people talk about you going to want to do payment with everything that you carry with you, every type of sensor. I don't necessarily agree to that. Identity is an important part that needs to get solved in the notion of Internet of Things, or the commerce within the Internet of Things.
But identity will be a puzzle that will be solved not by everything that you wear. It will-- I believe that it will still be solved primarily through the smartphone. Because that is still going to be the center of that ecosystem. It's going to be the center of that universe, regardless of how many sensors that you may end up carrying. Because none of them will have a need to attach a radio. And the variety of sensors that we have now managed to push into a smartphone, none of them will ever come-- will be as equal as a smartphone, or will become as adopted as a smartphone, or will come to solve for so many interactions and experiences that a smartphone have come to do.
So I think when you look at Internet of Things and commerce in the context of that, smartphone is still going to be very much the center of that ecosystem. So identity will get solved as part of that, not necessarily as part of a Fitbit or a ring, or a refrigerator. Your refrigerator may want to order stuff, but it will talk to something that it trusts. And the something that it trusts will still be your smartphone.
Sarah Gill, Reporter: Right. Because there's innovation we're seeing around the smart rings still have to be connected to a phone.
Cherian Abraham: Right. Exactly. So they will be moons-- right? I mean that's why I said the smartphone will be the center of that universe. And I think I absolutely believe that that's where things have to necessarily work and solve for in the context of identity, not with respect to can my Fitbit be used to pay for something.
Sarah Gill, Reporter: Where do you think there are holes in the market where you'd like to see more innovation happening?
Cherian Abraham: So one is biometric authentication, right? I think one of the things that do worry me is that as smartphone become very capable in terms of becoming a container of our identity, we still have a very lax approach in terms of being able to capture that.
So you have very differing approaches in terms of being able to, at a very important juncture, which is how do we store biometric information going forward? And how do we use that to authenticate? So we need to have a standardized approach. We need to have more collaborative efforts within banks and others in terms of moving these things forward.
So some of that will be driven by the market. Some of that will be driven by entities like Apple. But I think there is a broader role for banks and others to play. Because they have a very meaningful role in the identity ecosystem that they're letting go today to the likes of Apple and others. Right? Because Facebook is an identity arbiter. Apple can be an identity arbiter. And banks are losing that role. So I think that's something that they have to get back into it, and drive consensus, but at the same time create standards to move that forward.
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