The conflicts in the development of payment systems was shown by two recent events:

• Payments UK, the trade association for the payments industry, announced that five new members have signed up: Huntsman Security, Optima Consultancy, PA Consulting, PwC LLP, and TSYS.  Since its launch in June 2015, 18 companies have chosen to join Payments UK – a 28% increase in its total number of members. Payments UK now has 42 Full Members and 31 Associate Members, with more in the pipeline. 
• PayPal, which was set up to disrupt the domination of the large card bank companies, has (reported by The Wall Street Journal on 31 July) “reached an agreement with Visa that it would end its long-running fight to steer some customers away from using Visa and other cards. In exchange, the credit-card company agreed it wouldn’t increase fees to PayPal and would provide it with a new way to accept payments in stores via smartphone taps.” (MasterCard is reportedly looking for a similar deal.) This has sparked a sell-off in PayPal shares.

Co-operation is essential 

It is good news that more companies are joining Payments UK as it will lead to some increased competition, but it also has to be combined with increased co-operation. Investors in Fintech companies and Silicon Valley entrepreneurs are realising that, as The Wall Street Journal put it, “in the battle between Silicon Valley and entrenched financial firms, the newer players may eventually ally with firms they once hoped to compete against.” ‘Have to’ actually, but there are still huge opportunities to innovate.

Real-time cross-border payment tracking

Not all innovation requires allying with the existing players, e.g. Align Commerce have been providing real-time cross-border payment tracking for three years, see. (A new report on Align Commerce’s progress and further innovations will be posted later this week.)