With some delay here is the second and final part on our impressions of David Birch’s Tomorrow’s Transactions Forum (TTF13), which we attended thanks to Dave’s generosity (See full agenda and PowerPoint presentations here). See part 1 here.
NOTE: Although written in first person, what follows results from a combination of Laurent Simon’s and my notes.
The theme of day 2 at TTF13 was social inclusion. The kick off question was “How to develop tools to help people deal with money?” (people with no financial culture and based on a transactional account).
This was followed by presentations on “Comic Relief” (the day before ‘the big day’), “Universal Credit” and expert panel on financial inclusion.
Of the above the one that caught my attention was Claudia Wood of DEMOS, who presented a summary of her research on the use of prepaid cards to distribute benefits.
They claimed it was the first piece of research into electronic payments in the social care space. I wonder if that is the case. I will appreciate pointers (either privately or as a comment).
Dating back to circa 1905, when pensions were paid through postal offices, now a number of local authorities are using prepaid cards to distribute benefits as giro payments are phased out together with the Treasury’s budget squeeze. There are apparent cost savings lowering red tape to ascertain when and how benefits were spent (as local authorities have an statutory duty to monitor the expense) as well as easier to credit recipients and opening possibilities to combine multiple budgets (as a range of payments for vulnerable people are fragmented).
Some prepaid seems to be used as ID by young people and she noted the importance of telephone support for the well functioning of the schemes.
Yet a large number of people can’t or won’t take benefits through prepaid cards.
During the afternoon we were privy to the pre-launch of MyBank. An initiative of the European Union to create a pan-European online payments platform. This was interesting for two reasons
a) It seems that what merchants are looking for is to have direct access to the customer’s IP address at the point of the transaction (overcoming credit cards, PayPal, banks and everybody else). This solution was not quite there but seemed, to me, one more step in disintermediating Visa and Mastercard (which Bernardo reckons has been a desired outcome from Brussels for some time).
b) The solution is activated at the end of the transaction. The browser simply follows links embedded in the merchant’s page (via the MyBank button). Think of it as a PayPal button or a Facebook Like. You are then taken to your online banking account log-on page. You log on to the secure online banking environment of your bank following your usual procedure, confirm the details of the transaction and authorise your bank to process the payment. The merchant then received realtime confirmation.
MyBank thus lets the bank deal with security, untrusted websites, and the rest of it. This was surprising because
i) The day before, comments were made about the loss of business by extra “clicks” and people being at awe on Amazon’s “one click” purchase.
ii) Many made comments that this was perhaps a perfect set up for a new wave of phising scams as scammers will use it to get your online banking account credentials. Maybe MyBank will also add some two-factor authentication later (with phone or CAP reader). But nothing else for the moment.
So it will be interesting if at some point there are some stats on the transactions involving MyBank are released. At the moment, though, it seems Bitcoin is getting more attention from the press than the March 25th launch of MyBank.
Finally and to be honest, some of the delay to post this brief summary of day two responds to the fact that I was expecting more of the International Payments Summit 2013 and make this into a three part blog. But although it advertises itself as “Europe’s most prestigious payments conference”, I think it covered about the same range of topics as TTF13. So I gave up the idea of a third instalment for this blog. But you might want to read David Birch’s version of the Payments Bootcamp, featuring a presentation by Bernardo in which we discussed the importance of shared narratives between “technologists” and business people.