The future of payments: putting customers first

Consumers and businesses’ expectations of the payment industry are growing steadily. Our daily interactions with smartphones and tablets have encouraged us to expect technology that is seamless, always available, instantaneous and intuitive: nowadays most people presume they will be able to use a new app or device without ever looking at a user manual.

To a large extent, the payments industry is keeping pace with these sky-high expectations: the pace of innovation has dramatically accelerated. New technology is transforming how we make payments, improving convenience, visibility and security. It is not only payments tools and processes that are evolving, but the nature of the payments industry itself.

New fintech entrants are bringing fresh dynamism to payments, both with their own offerings and by collaborating with existing players. At the same time, established tech giants are increasingly entering the payments market, having recognised the attractions of integrating payment capabilities into their ecosystems. For consumers and businesses, this disruption means there has never been more choice on offer.

Despite this, there remains a central role for banks – provided they are willing to commit to this new payments world. To remain relevant to customers, banks must put customers’ needs at the centre of their business – as ING does. ING’s mission is to enable customers to stay a step ahead in life and in business. Making payments faster, safer and more straightforward is a key concern for customers. Consequently, driving change in the payments industry is a priority for the bank.

ING is investing €800 million in digital transformation across the bank as part of its Think Forward strategy: payments transformation is an important element of this drive to improve the customer experience. ING’s guiding philosophy in these efforts to transform payments is that payments should reflect how clients do business: people expect to be able to make payments easily and in multiple ways. To this end, ING is also thinking beyond banking – envisaging how payments can be fully integrated into the buying experience rather than being a separate stage on the journey.

Regulators around the world are eager to stimulate innovation in the payments market. In Europe, the Payment Services Directive 2 (PSD2), due to be introduced in late 2018, is specifically designed to open up the payments infrastructure, encourage innovation and add value for customers. It will enable customers to give third parties access to payment details from their bank and to carry out transactions with the customer’s payment account. For banks, PSD2 represents both a challenge and a motivator: it is encouraging them to work with fintechs and connect to each other.

One of the defining elements of PSD2 is the introduction of mandatory APIs, which will facilitate more streamlined payments within business e-commerce sites and between banks. ING is currently implementing an API-based architecture in order to learn how to deliver better, faster services internally before offering to clients. However, the bank has already embraced the opportunities PSD2 offers with a series of innovations, developed both internally and with industry partners.