Devices and Unconventional Channels Are Turning Into Payments Platforms


The payments segment was the hottest FinTech segment in 2016 – financial technology companies around the world raised a total of ~$36 billion in financing across over 1500 funding deals from over 1700 unique investors (not taking into account M&A deals). Representing less than a quarter (22%) of the funded pool, the Payments/Loyalty/E-Commerce segment secured almost 40% (over $13.5 billion) of total funds raised, while, with 29% of representation, Banking/Lending companies are responsible for just 26% ($9.3 billion) of raised funds.

With payments being at the center of attention, no wonder companies across industries are looking for ways to integrate payments capabilities into as many devices/platforms and channels as possible.


Virtual reality (VR) is probably one of the biggest shots for the retail industry given the rapidly increasing number of adoption cases. Some estimates suggest that 43 million people owned VR products worldwide in 2016, and this is set to grow to 170 million by 2018. To leverage the growing user base for commerce/retail, technology companies have been working on implementing the payments component into the tech. One of the pioneers is Alibaba, which last October, demonstrated a payment service that will allow virtual reality shoppers to pay for things in future just by nodding their heads.

Given that users are expected to spend as much as $7.9 billion on VR headsets and $3.3 billion on VR entertainment by 2020, VR payments seem to be a logical and necessary course of development for retail companies and financial institutions. Wearable technology will play a key role in connecting a payment solution with items in the virtual world, which makes all initiatives by technology companies to incorporate payments feature in their gear a forward-thinking move, Samsung being among those first-movers.


Given the estimated scale of video streaming and an outstanding popularity of such video and movie streaming platforms as YouTube, Netflix, Hulu and others, in-video payments seem to be a natural choice for commercial use. Given that average Americans from age 2 to 65+ watch TV from ~21 to ~51 hours weekly, in-video payments are a whole new frontier for businesses to reach affectionate audiences in a profitable manner. In-video payments can become a holy grail of effective fund allocation and measurement of ROI on extremely expensive video content.

In-video payments systems are not limited to commercials and other forms of short features, good ol’ product placement can finally be employed at the spot. A major advantage of in-video payments, in this case, is in the ability to measure the effectiveness of spent funds and significantly boost the profitability of any business.

The idea and the realization may seem to be still raw and there is not much of a market for those types of solutions globally. There are, however, a few companies working on very interesting systems to harness the power of video in communicating value – Soundpays and IntegraPay, which has been reported to be released in the US where it boasts a 27% cost decrease during the sales funnel process and an increase in the conversion rates for product sales.

In-vehicle payments

At the beginning of January 2017, Honda announced that it will conduct the first proof-of-concept demonstration of in-vehicle payments with infrastructure parking and fueling partners at 2017 CES in Las Vegas as part of its ongoing partnership with Visa Inc. The demonstrations will be done with fuel pumps from Gilbarco Veeder-Root and smart parking meters from IPS Group, Inc.

Developed by the Honda Developer Studio, the fuel and parking proof-of-concepts offer a quick and seamless in-vehicle payment solution, delivered through smartphone integrations. Drivers are notified that they can pay for fuel or parking when they are near a smart parking meter or fuel pump. Depending on the services, the purchase amount is displayed in the dashboard and drivers confirm payment with the touch of a button. Honda is currently in discussion with a number of other companies that will continue to help ease the various innovative payment processes of other car-based transactions.


Wearable technology increasingly gains popularity as financial institutions and technology companies have expressed optimism in payments via wearables. Samsung, for example, believes that “if there’s anything more nascent than mobile payments, it’s mobile payment via wearables. Currently, this is considered an early niche market, with gradual growth projected…”

Indeed, by 2018, over 250 million smart wearable devices are expected to be in use – 14 times more than in 2013. The shipments of smart wearable devices are expected to grow rapidly – from 9.7 million in 2013 to 135 million in 2018.

Such a massive expansion of the industry wouldn’t be possible without a sizable adoption of contactless payments. Contactless payments are expected to grow from $35 billion in 2015 to $95 billion in 2018. Given that contactless payments are here to stay and grow, wearables are the perfect and logical outlet to embed them. In fact, wearable payments are expected to overtake plastic cards in 5–7 year’s time. Some forecasts suggest that wearable payment transaction volume will grow from $3.1 billion in 2015 to $501.1 billion worldwide by 2020. And by that time, wearable payments will represent approximately 20% of the total mobile proximity transaction volume and about 1% of total cashless transactions in retail.

Social media

Social media is not particularly new for PSPs, but certainly one of the most important channels to leverage. Migration to media channels preferred by users eliminate the need for five different apps for the same function. P2P payments apps are gradually becoming one of those redundant space-wasters as technology and code-first companies stuff their solutions with various features including the ability to send funds to a friend. Essentially, the like of Messenger, WhatsApp, Twitter, WeChat and others are eliminating the need for using any other app, creating a streamlined wholesome experience within one platform. And financial institutions should see it an opportunity to become a part of the deal given an increasing importance of those channels in users’ everyday life.

Today, there are already quite a few financial institutions worldwide that are exploring this opportunity – ICICI BankBarclaysRBC and more. Just a week ago, Santander and Mastercard were among companies that backed PayKey, an Israeli-based startup that allows P2P payments as easily as writing a chat or sending a photo to a friend using WhatsApp, Facebook Messenger or Twitter. PayKey has developed a mobile keyboard application that connects to the bank to make instant and secure payments.

Firs appeared at LTP