in payments innovation

20 years

The three tenants of innovationDeveloping a culture of innovation

True innovation sparks a step change in the way we go about doing something, from a technological advance to a shift in organisational structure.

But innovation doesn’t just happen – it needs the right mindset and company culture to develop breakthrough innovations.

Success or failure are both learning experiences. The Wright brothers didn’t succeed at their first attempt at flight but learned from their failures and persevered until they succeeded

By staying alert to innovations and industry developments, companies can unearth opportunities to develop their own innovations. Having spotted the high price point of smart phones, OnePlus developed their flagship killer smartphone at half the price of the competition

Companies that collaborate together are able to leverage each other’s expertise to develop innovative products and solutions that would otherwise be impossible to achieve. A great example of this is Coca-Cola and Heinz who collaborated to develop more sustainable containers

Learn from every experience

Identify and seize opportunities

Collaborate to innovate

The 4 types of innovation

Innovation springing from a fundamental review of an industry’s business model

When a company innovates their core or enabling processes to deliver competitive advantage

When a company delivers true innovation to the product range or method of delivery that creates a shift sector change

When a company looks to change the way it engages with target audiences, incorporating channel choice, brand positioning, and customer experience

OfferingBusiness model Process Delivery

Drivers of innovation in payments Problem solvingMany innovations arise from looking to change an unsatisfactory practice or way of doing things

External forces like the 2008 fi nancial crash can produce incredible innovation, with sharing economy icons like Uber and Airbnb a standout example of service innovation in the face of adversity

Technological innovation oft en derives from eliminating the need for a certain job, role, or activity. Auto-save apps like Acorns or budgeting tools like Toshl look to facilitate fi nancial responsibility without the hassle

Just as the Ford Model T succeeded to the horse-drawn carriage, sometimes payments systems too need drastic overhauls in order to perform to expectations, with legacy systems being replaced with newer ones, oft en taking advantage of cloud technology or similar breakthroughs

Negative situations Eliminating needs Performance barriers

Drivers of innovation in payments Customer insight

Customer demands, both known and hidden, are also a consistent driver of innovation within markets

Innovations driven by evolution in customer demand include the drive for personalisation across the payment sector (covering bespoke rewards packages and customised user interface), as well as the drive for increased convenience and flexibility, with the Tesco Clubcard a leading example of personalisation

Sometimes customers themselves don’t yet know what their newest demands may be. In the payments landscape the increasing use of behavioural economics and nudge theory is a great example, tracking behaviour trends and providing new products or solutions before the demand exists. David Cameron’s government established a Behavioural Insights Team in 2012 to explore just this

Evolving customer demand Hidden customer demand

What innovations have we seen in 20 years?

PayPoint has seen many important innovations within the payments sector over the past two decades. They have been driven by a number of different factors, but all have resulted in driving the sector forward, delivering better solutions for customers, suppliers, and retailers.

Here we identify a few, and outline why they have been so important in the evolution of the payments ecosystem we know today.

The journey through payments Innovation pastThe last 20 years have seen many important innovations across the payments sector which have changed the landscape

Originally trialled in 2003 and introduced in 2006, a decade of adoption has now reached some 75% of UK retailers, and has drastically improved security and speed of sale

Within the prepay sector, there have been a number of steps taken diversifying and advancing innovations in payment gathering. Token meters, gas smart cards, and electricity keys have all been developed to collect payments

Chip & Pin Prepay sector

With 76% of UK adults owning a smart phone, and UK consumers looking at smartphones over one billion times every day, it is no surprise that payments have embraced mobile as a platform

The rapid adoption rate of contactless payment underlines the importance of Point of Sale (PoS) customer experience, as slick transactional processes can bring consumers and suppliers closer together

From smart meters and auto-charging on toll roads to branded ventures like the Amazon Dash button, integration and connectivity is delivering payments solutions into every aspect of life

Mobile fi rst Contactless Internet of things

The journey through payments Innovation presentOur current payments sector is prioritising integration, convenience and customer experience above all

The journey through payments Innovation futureBuilding on our extensive experience, the future of payments has yet more exciting developments in store

Bitcoin has seen a remarkable growth since its inception in 2008, from each Bitcoin being worth 4p to their current value of over £460 – the anonymity and fl exibility of blockchain technology has interesting implications for the role of banks and security in the coming years

There are a wide variety of exciting security initiatives in development looking to address growing concern over fi nancial security. Biometric sensors building on the prevalent touch ID identifi cation, and even gait recognition to identify you by your walk aren’t far from more general roll-out, and this can only increase confi dence in payments systems

Virtual currency Next-gen security

PayPoint’s four-step process to innovation

All innovations solve problems. These problems may not be critical or high-impact, but every innovation is an improvement to a company or sector that creates a better way of doing things across the market. At PayPoint, we have a simple four-step process which informs how we go about solving problems and generating innovation internally:

1. Define the issue F Clarity is crucial: identify the problem and any connected

problems associated with it

2. Develop a framework F Identify the roots of a problem, including any previous

attempts at solution, taking on learnings from history

F Consider the problem within its own context, as well as the

wider impacts that solving this problem might solve

F Ensure clarity of purpose by phrasing challenge questions to avoid words like “faster”, or “better”, which will guide you

towards vague answers

F Identify decision-makers, whether they are upper management or the salesforce at the coalface, make sure the right people are in the room

3. Generate some ideas F Problem solving is a fundamentally creative process, and

true innovation comes from new ideas created within a framework (again, mission clarity is central to ensuring

focused creative output)

4. Pick and implement the best F Once you have a number of creative solutions, the pre-

identified decision-makers should pick the best ones, and begin to outline the path towards implementation

PayPoint keeps modern life moving across the uk

Energy Transport Cash out Parcels Contactless payments

Since launching MultiPay in 2014 with Utilita’s, PayPoint has given their customers greater control over energy usage, and grown Utilita’s customer base rapidly

Delivered by PayPoint and ACT in November 2014, over a million tickets have now been sold on Walrus cards, ITSO Mersey Transport smart ticketing scheme covering bus, rail and ferry travel

Revolutionising how energy companies refund, reimburse or issue funds to customers, including the annual energy credit and Warm Home Discount activities

Solving a huge consumer headache of waiting in for parcel deliveries and providing convenient click and collect/ return services at 6,000 local stores

10,000 contactless enabled card payment machines making the UK’s largest Apple Pay enabled network

Thank youwww.paypoint.com