Hub71 Impact Circle Fintech: FinTechs Revolutionising Digital Payments: What comes next?

[Music] thanks a lot Flo for the very kind introduction it's a great pleasure to welcome you to this panel on payments and the future of digital payments in an area of groundbreaking Innovation the way that we transact that we connect that we create values has under undergone a very different shift a systemic shift digital payments are no longer just about convenience they are just the backbone of truly interconnected global economy I'm very pleased and honored first to be here thanks a lot for having me and to welcome exceptional industry leaders who are not only shaping the transformation but also changing the landscape for payments and to start with what I'd love to do is to ask them a question and as an introduction and an opening remark um and I'll start with you marwin what do you think is the most significant factor driving the transformation of digital payments today introduce your role and of course your company contributing to this change and welcome thanks a lot thank you so much good afternoon everyone my name is Maran ner I'm a director at paymax paymax is a global payment provider headquartered in Singapore with a big focus on APAC region and more recently on the Mina region hence we are here in in UAE we have a license from adgm and you also cover multiple region multiple countries in in the Mina region so back to the question about the the the tractors shaping digital transformation digital adoption of of payments and the new trends um so I I look at it from a demand and supply and enabler point of view so the demand is picking up everything is becoming digital especially after the pandemic digital payments became like a you know normal thing to do we all shop online especially with the you know uh uh young Generations the Millennials and gen Zen Z that are basically digital Savvy and Native and you know transacting online became you know very normal thing to do that really fueled all the uh uh uh the growth in that field uh from a supply point of view all the technology availability and the speed and the new innovation for payments when it comes to you know either traditional payments or the more advanced uh uh technology that we will speak about later I think that also provide fuels this whole growth in digital payments and of course the environment which is the enabler when it comes to regulation for example here in the UAE and the overall adoption of everything digital in our world I think is also fueling and will only expand and grow in the future thanks a lot marn Aon israil if you'd like to share your views as well and welcome thank you uh thank you Maran uh hi everyone glad to be here my name is arson I work for Google um my role is a sector lead so formally I'm in sales more related in the ads and my actual job is like uh we Consulting uh Global International mostly technology companies in terms of the marketing and the Business Development so uh I will be the one giving more general answers today uh because like I can't like say about myself and an expert as the digital payments so I will in terms of the how Google is helping to develop the digital payments I will say about three things uh number one is um ecosystem regarding the Google pay and the Google Wallet in terms of the creating of the frictionless payments ecosystem for the e-commerce as the second point I would say the infrastructure uh both from the developing mobile apps Google cloud and a lot of the technologies that are required in order to be as enabler for the digital payments whether it will be just in general sense for the finer and the finance and the third point is of course that there are almost like no GOOG are not talking about the AI so I will say like a the automation because if we will look at it from the perspective of the experience in regards to the digital payments the automation plays one of the key roles especially these days if we will not be looking at the like a um what Jerome will be telling us regarding the modern ways of the payment but in terms of the general experience thank you thanks arson and J J for if you could introduce your yourself and give your your views thanks cool thank you um I'm the CEO at imersive we're a global partner of MasterCards we enable web3 companies to issue their own branded web3 MasterCard product I think there's three things are going to impact payments in the short to medium term digital identity digital currency and digital payments at the moment we're going through a kind of noia codc moment payments haven't fundamentally changed in oh goodness 70 years you know so Visa kind of started out in 1956 it was a card number it was an expiry date it was an amount in the early 70s they digitized it so you could do it electronically similar to how you could do a phone call electronically also in the 70s and 80s now we're going to see this transition to apps apis data Point of Sales Systems are going to become the Epic Center for digital payments money is going to evolve it's going to become smart it's going to know where it is where it's been where it's allowed to go and with decentralized Ledger technology digital identity shared credentials um is going to really open up Innovation um and enable a whole bunch of um really cool things to happen that haven't been possible before yeah thanks a lot so we'll go much deeper now on digital payment Innovations and I'll start with you Jerome but of course you know this question is to uh everyone with what we seeing with the advance uh the rapid advancement of digital payments with cash to digital money cbdcs toon deposits stable coins what do you think uh these Innovation are complimenting or disrupting existing payment system and I'll start by you uh Jerome if you can share your views I think on the complimentary side you've got Global infrastructure particularly from visa and MasterCard that makes it easy to build a global business without having to onboard you know millions of merchants or places to spend so you got the distribution in place the innovation's very much happening on the consumer side um initially you had absolite revolute I guess that were buil in consumer experiences now with this blockchain technology you've got these ecosystems these new Innovations these new web3 wallets these defi protocols these digital currencies these stable coins they're increasingly becoming more regulated more adopted and people are looking to way in which they can earn digital currency get value from that so it might be a loan against their crypto it might be a yield and they want to spend it and all of these things are happening on this open Global um infrastructure with a massive amount of investment unprecedented investment U from BCS and other parties in the place well thanks a lot and marn uh yeah definitely I mean anything to do on on the blockchain and digital assets will will be a big innovation in the future I will speak maybe a bit more traditional Innovations such as you know like uh the embedded Finance I mean we've seen it everywhere embedded payments embedded lending with the likes of bnpl I mean UAE and the region so you know a big adoption for by now pay later with the likes of tabi and Tamara so this became this you know frictionless seamless user Journey where you can get access to a microloan or to to a credit uh same thing with insurance now we're seeing a lot of insurance kind of products being embedded without you even thinking about it if you go on Amazon if you go you know to buy any furniture the insurance is already embedded with it and it can e even become more you know deep in terms of innovation and and kind of connectivity with tomorrow when we have Internet of of things and the iot payments what we call kind of the invisible payments for example when your car will automatically pay for its toall you know gate charge or it will renew its Insurance automatically so I think these are type of innovation that we will become and payments as Jerome also mentioned moved from you know a cost item on the p&l of corporates to an innovation and a way of differentiation for for customers and for the for the merchant as well thanks a lot I'd like to move the question now to arson and talk about security risk and Trust so of course you know security a top concern in digital payments what do you think the Innovative approach approaches or Technologies are being used to medicate this risk and ensure consumer trust in digital payment system um thank you so um let me get to this to from two perspectives I love Maran what you said regarding the invisible payments because imagine I'll start to thinking from the b2c perspective imagine like we're all using like platforms and there are well-known Brands where we making payments so from that perspective it's like a shared responsibility so if I buying something from Amazon I do trust to Amazon so from that perspective I'm not expecting any kind of a scams or issues which is posing two requirements for the Amazon as well as the for the payments provider which is again we're talking about the trust the second aspect I would say is very interesting uh because this is more of evolutional whenever we make payments on the big platforms or any kind of a disservices some of them invisible payments and then um there was a research was done which was done with u my team and they were looking in terms of the um uh well-known most searched financial institutions uh during the year and in top 30 there was like a 25 were well-known Banks while fex were only five or like three so from that perspective in terms of the trust the users still trust more to the banks you can easily can get the numbers that in terms of the number of the accounts fex are showing an amazing progress but if we will look in terms of the deposits where the actually user is risking with their hard-earned money you will see that they still trust to Banks so from that perspective this the key aspect of the trust from the consumers perspective which is posing a lot of the requirements in terms of the user experience and in terms of the security for the actual companies that are providing those payments these I would say like a two key aspects thanks a lot I want to move into now we talk about trust I want to move to the regulation part regulation part of course you know abudhabi position itself as a big fintech Hub and thanks a lot to this Progressive regul environment from your perspective and I'll start with you marwin because you've been you know established yourself you set it up in singapor first uh for Asia uh you've been you know scaling in also different parts of Asia China Etc and then re and then a couple of years ago establish yourself in the UAE so could you please let us know how Abu dhabi's regulatory framework make it attractive for Innovation and how do this regulation balance between fostering growth while you know uring compliance and consumer protection yeah thank you so yeah as you rightly mentioned so uh uh pmax was established in in in Asia headquartered in Singapore and in 2022 moved to the to the Middle East firstly established in the UAE more specifically in adgm and from here kind of we expanded a bit in into Saudi and to turkey in Egypt and and The Wider Mina region so uh Abu Dhabi specifically and and you know UAE in general has been very proactive in terms of Regulation and providing startup friendly uh Frameworks and sandboxes basically to help them test and basically grow and scale their products before before launching uh more more also like the access to Capital Abu Dhabi as the capital of the UAE the access to agel investors and VCS that are available within hub71 and other institutions and and and bodies also provide uh uh you know tools and money is the you know most critical tool for any startup basically to grow so having access to investor networks and capital is crucial and adgm uh provides that uh uh seamlessly and also from a regulation point of view and from an environment point of view when it comes to the to the LW for example it's based on the English common LW which is you know you know worldwide standard uh the fact that you know the ownership can be 100% for the for the founder profit repatriation uh uh uh lows are is friendly tax uh regimes are very friendly so all of these factors basically makes it a very attractive Place basically to establish business for the region for UAE first and for the wider region as well now thanks a lot it's really really interesting jum so you also comp who has been who you started so you based in New Zealand but it was in the UK Ireland Sydney Mexico Brazil what's UA and what's Abu Dhabi is very different and could you share about your journey about implementation of your company but with the regulation yeah so we're a regulated entity I deal with multiple Regulators all around the world um I think the difference is if you look at traditional Regulators uh as you would look at a traditional mechanic and if you look at digital assets like someone that looks after a mechanic looks after a Tesla or an EV the difference between traditional Regulators is the equivalent of taking your uh Tesla to a traditional mechanic they're going to open up the Bonnet and see that there's no motor there and be very confused over here we have adgm and my first experience with adgm was something I haven't come across before normally we produce these thousand page documents um that took a lot of boxes that probably the people reading them don't understand if I was to be fair and in this instance the first response we got back from um Brian at adgm was does your protocol support ERC 4337 if not do you plan to because it provides a better user experience now that's a Tesla mechanic understanding a Tesla car oh excuse me massive difference and they try and understand you as a person and as a business they have um you know their monthly meetups and they want to understand you as a human they want to understand your team your thinking you have whiteboard sessions with them um and it's it is very different they they want to support you and enable you to succeed in this market so yeah I would say adgm is the most Progressive regulator we've come across uh the easiest to engage with the most open the most transparent um yeah sorry not sure what's going with the mic either by the way it's working it's working we can hear you yes no we hear you so very Progressive regulator enabling you know a lot of um allowing also partnership and I'd love to talk about now the ecosystem Synergy between Tech between fch payments Banks how does it really work could you share with us perhaps you know your example like real case studies of successful per perh house challenges as well that you face when it comes to Bank corporate fintech payments collaboration um perhaps Maan you want to startop yeah I'm sure so uh uh before joining pay Marx I was part of alut group uh working in within their payments uh service arm and that was around 2020 uh just around 2021 and bnpl was still you know new in the region and tabi which we all uh maybe know here was a very small startup uh uh trying to get a big name or corporate basically to accept to add it to their checkout so uh at that stage uh Alim as a as a as a big group and conl in UAE basically gave it the trust to test and to Pilot the bnpl product with two websites and the results were astonishing and then slowly slowly more Brands within the group started adopting this you know new technology today you know when you talk about bnpl it's like yeah definitely all the websites should have bnpl in the region but at that stage there was a lot of you know a lot of uh uh push internally from the group saying you know what is bnpl it's not going to work uh it's a small company why would we trust it what if it fails all of these questions and you know uh concerns uh basically were were you know Justified at the at the at that stage but with the right governance with the right implementation when you do pilots when you have a trust relationship between the corporate and the fintech things grow to to become a success story and alut was actually the first big account for tabi which also allowed it to land other big groups eventually m al and all the you know other family offices in in the UAE so I think it started with with you know an initial meeting and it trust and definitely a good product and a good team at their end so you know but if if we didn't open the door at that stage things would have maybe been been different so that's one one example very very good example indeed collaboration between startup and establish uh corporate or government is often seen as a driver of innovation and I'll talk to I'll ask you Jerome about sharing some successful partnership that have accelerated progress in digital payments and in your field you know uh with what you doing with web threee and the wallets and what lesson can others learn from these collaborations uh for us was very much been part of Hub 71 uh one of our uh VCS actually completed the application form I didn't get round to it previously and his drum you need to be in the UAE this is you we didn't say it's the capital of capital but kind of along those lines um and on the back of that we've had um massive success engaging obviously with the regulator adgm we have spoken to multiple Banks here that actually looking to collaborate with startups acknowledging that Innovation is something that's really difficult to do in large corporate environments and they realize that you know now in UA with 30% adoption of crypto that maybe Banks need to have a product that is relevant to consumer and to be relevant to Consumers now that that does include crypto and so all of these things have happened for us on the back of um being part of Hub 71 so there's an example no thanks a lot yes very remarkable work from Hub 71 enabling a lot of the partnership facilitating collaboration is really good to have them uh to Foster and provide you know more fintech and and corporate partnership um I'd like to talk about scaling now scaling the the scaling part what have we learned about you know the lesson learned from scaling and perhaps jome um I'll start with you and then after that Maran and of course you know arson but the web threee and decentralized finance are gaining traction what do you see are the biggest challenges in scaling this technology to mainstream adoption for web 3 in particular the biggest issue is um the user experience and regulation um often these two things are in conflict with each other a lot of crypto native people don't want to do kyc they don't want to know uh where their transactions are where they're coming from all this type of things so when you're trying to bridge web 3 with traditional Finance which is what you need to get Mass large scale adoption you need to do a couple of things that are challenging one is you need to bridge this unregulated web 3 world with this regulated web 2 traditional world and the next you need to do is have this really elegant user experience which up until recently web 3 I would say has been more for Tech Natives and has been for my mom or dad so I think those are some of the challenges um that we're starting to address yeah I mean from um I'm not in web 3 so I will speak about traditional payments uh I think one of the lessons was that you know you need to adapt to each local market because every local market is different even within the same region so P Max basically came with an Asian identity where you know payment methods in Asia are very different even within you know each part of Asia take China for example you have WeChat alipe yes you have cards but it's mostly wallets uh Singapore uh Indonesia they have their own payment methods Mina was very different but initially you know if you if you don't live in Mina you haven't transacted in Mina you think it's like you know One-Stop shop you know like copy and paste actually it's very different even within Mina if you look for example between UAE KSA Egypt turkey Lebanon Iraq very different landscape very different user Behavior very different regulation very different uh expectations from users so as a payment provider for our Merchants which are mostly Global uh Merchants coming to a region uh they don't necessarily know the nuances or the differences between each country between the regulation and you know what users want to use like if you want to do a payout to the user what do they prefer do they prefer cash do they prefer bank transfer do they prefer wallet transfer the answer is is very different in UAE versus Egypt Egypt is big on cash people want cash they go and they withdraw their transfer or they even pay with cash so you know they pay online they have a code and then they walk to a store nearby and they make the payment with cash it's very different than in UAE so if you do not adopt and you don't play this advisory role to the merchant then you know they might miss on some major payment methods for example if they disregard cash in Egypt or if they disregard digital payments or digital wallets in Africa then they will miss a big chunk of their of their collection Potential from from the users so the the need to adapt to the local market is key and Partnerships I think is also very crucial having a win winwin partnership between the service provider the merchant but also the customer so we need to keep the customer experience in mind because sometimes you can have a bilateral deal with a service provider but then the use case is not user friendly so people will not adopt it so it's not enough just to have a good deal with a good profit sharing ratio between you know a payment provider and an acquirer if for example the payment method that they are enabling you know people are not interested in or they will not adopt it so having this uh you know winwin win and trust as as arson mentioned previously this is key in scaling and building this partnership and expand it you know across regions or within countries in same region so we have Partners where we started for example with one country but Partners who have multiple you know uh footprint in different countries because we established trust let's say in UAE we could we could expand it or we did expand it for example to to Qatar to Kuwait to KSA so these are you know uh some of the lessons that we uh we learned no thanks a lot you want to add yeah I just want to add because while Jerome and marel was speaking I was splitting in my mind this into two parts one is the evolutionary because whenever we're talking about the existing payment e system and the user experience to me like it sounds like a evolutional way of like a automation or making the experience better building trust and all that stuff which is there is still a component of the regulation but it it comes by Design and then there is the Revolutionary way in terms of the new digital payments new currencies something Innovative where the value or like the weight of the regulation is heavier I would say which is more like a policy related and then if you can imagine like for the startup we if you will not talking about the corporate but we talk about the startup then it is a very big overhead because you need to build a kind of a you need to have a compliance team for each in every market and then I was just wondering if it will be a very interesting opportunity for iggm and hub71 hub71 and iggm they are doing an amazing job here in the uee but maybe the next challenge should be come up with something from the regulatory perspective for the whole GC area which is then will make a lot life easier for the startups from the overhead perspective and then in even from The Innovation perspective that might be something interesting thanks no thanks a lot my last question but perhaps the most important one is the future Trends in payment so we have you on stage and I really want for you to discuss with us we know there the decline of cash will continue and instant payment will continue to displace other payment methods Real Time payments real have now be established in almost every Major Market where I seeing with case studies in Brazil in India and also the EU who has boost adoption of realtime payments what's your view what's you know the going to be the key Innovation and emerging Trends and what will make you busy for the next five years so I'll start with you perhaps uh arson uh to give your views on the trends well um again I will give you my very general answer because like whenever was we talking about the future uh we should be talking about the generation about the next people let's talk about the genz do they they have that heavy history of thinking about Fiat or not Fiat digital payments or something like this does it matter for them will they think about it or they will be more thinking about from the perspective of the their own experience their own because I was mentioning the example in terms of the in terms of the number of the accounts for the fintech companies which are like rising and very big while you can easily will see that most of the deposits are not with the Gen Z they're not depositing a lot so from that perspective doesn't matter if them it it I'm not trying to answer the question in terms of that do we need the digital currencies yes definitely there will be a lot of the inovation in Revolutionary way but in terms of the user experience I think it's like uh we need to think in abstract terms in terms of the what is actually the payments if you're are not looking at the layer of the we actually is it like a something crypto blockchain related or is there any movement of the money will it make sense for the those Generations that will be using it will they think about it like where it's coming from I'm not sure in terms of the the last point will be is that especially from the generations perspective there will be a lot more demanding than us like uh I'm pretty sure that there is like a lot of like a very big heart of the people if they will see the screen where they need to enter the number of their card they will refuse it they will not buying buying anything they will just go to the platform where it will be like just one click and that's it so this is more like a kind of a you know underlying layer will be revolutionizing but the front facing for the user layer it will be more the from The evolutionary perspective the friction less the easier of use etc etc thank you yeah I will leave the digital assets part for for Jerome although I believe it's it's it's the future the digital money is eventually coming uh to us uh I will speak about more you know the traditional uh also Financial payments for example cheaper crossb payments faster crossb payments will be in actually it's a need and will become a bit more uh uh normal in the future uh with the use of you know uh maybe stable coins or other technologies that will be one uh key one so having you know a much easier way to send money whether it's a P2P whether it's b2c whether it's you know c2b also if if you think about open banking account to account transfers U as I mentioned earlier embedded Finance I think it will become more part of our daily life we will stop thinking much about payments you know maybe uh uh your your Alexa or your yasmina will do the groceries for you so all of these kind of new trends will become more and more mainstream as we as as we uh grow um and you know cbdcs also could be uh uh could is actually going to become uh have more use cases probably on the B2B side before the retail side for large transactions and uee has been you know testing uh multiple uh projects with the mbridge uh project with you know some Southeast Asian and with Saudi Arabia to do some pilots on the cbdc project so lot of exciting times to come so uh we need to be ready to you know adopt these new technologies and make the most out of it Jerome you have the last words but I think an important one about you know what's your view uh what's going to be you know defining the next decade of digital payments look we're going to see more innovation in the next 10 years in the last thousand where it comes to payments and as I mentioned before it'll be driven by three fundamental pillars digital identity digital currency and digital payments and I'll talk a little bit about each so around digital identity in uh the world today uh fat F the governing body for compliance estimate that we spend $100 in compliance activity finex Banks or similar to save $1 off nefarious activity so um not a very good Roi so from a digital identity perspective what we're going to start seeing is um money sorry we're going to be able to get codified compliance so only two people that have been kyc without necessarily having to share their details with each other can send more than $10,000 only currency where we know the source s of funds and only networks and so you're going to have codified compliance in the the network I think that's going to drive a lot of innovation and I think Innovation at a global sort of scale at the moment you have local banks local Regulators local standards this type of innovation is going to make payments more Global more open you know you'll be able to send money at the same speed of sending an email and with the same if not higher compliance what we get today from you know traditional payments on the digital currency front um I think think smart money as I mentioned programmable money money that knows where it is where it's been where it's allowed to go you know maybe as um you know philanthropic people may want to just have codified money that can only be used for good that that type of thing and then I think on digital payments we're going through this codat noia moment we're going to go from analog to digital you know payments at the moment are like a a phone call in the 80s or '90s but they're going to transition to apps API data you know that's going to enable personal payments personalized rewards personalized experience at a level that's been unprecedented before that AI a little Bot Man bot girl integrated with the point of sale integr with our calendar is going to make decisions for us recommendations for us um you know a whole bunch of really exciting things going to happen on the back of um these three pillars and we didn't talk we didn't mention the word AI yet yeah or or metaverse be other one so definitely AI I mean at least I see two two major use cases where AI can improve digital payments one on the fraud fraud prevention and fraud monitoring because it will be able to Crunch so many sorts of data and come up with real-time kind of answers on you know screen uh screening sanction list checking and even data analytics to come up with you know trends that kind of before the card is is you know transacting and it moves to you know a dispute or fraud or a chargeback kind of avoid this whole thing by being uh smarter and also when it comes to personalized offering so the more data AI can generate can you know consume it will generate very hyper personalized experience for the users whether it's in payments or in any different types so I think hyper personalization will become eventually uh uh something normal in the next few years with the help of Ai No thank you so so much I think we see the future really inside food knowledge that you shared and it was a great pleasure listening to you thank you so much thank you [Music]