The PAYTECH Book

From banknotes and coins, to plastic cards and mobile devices, payments have evolved over the centuries to include a number of instruments and means that help financial transactions to take place. But what exactly is a payment and how are these cleared and settled in a modern financial system? What are the elements which are necessary in order to facilitate a payment? This chapter looks at the broader question of “what’s in a payment?”, and attempts to provide explanations and descriptions of the various stages and elements of payment systems. It looks at these from historical, technological, procedural and social perspectives.

This part looks at the payment technologies, fund-transfer systems, and global infrastructures that facilitate payments around the world. It is a collection of case studies and in-depth analyses of existing technologies and infrastructures that provide payment solutions to the finance industry and beyond. This includes descriptions and roles of payment schemes and systems; cross-border infrastructures and recent initiatives; card payment infrastructures; mobile money and payments initiatives; and developments in the space of digital currencies. It also contains chapters on the respective technologies, standards, and cybersecurity solutions and how these transform the future of money.

No PayTech book would be complete without a review of the ways in which regulation and compliance with industry rules and standards is evolving. In this third part of the book our authors aim to give an insight into how the Fintech landscape has been both enhanced through growth in competition and the opening up of the old incumbents as well as the hurdles that are being thrust in the way. We answer all these questions and much more by looking at the new products and services being created as well as at laws and regulations we expect to come through.

In this part we look at how the massive growth in cryptocurrencies and blockchain technology solutions has created its own set of new legislation and ways of interpreting existing legislation to ‘fit’ these new products. Some countries are writing new legislation with a view to lure cryptocurrencies to open shops in their territories, whilst others are trying to snuff out what they see as an attack on their sovereign currencies. We explore Initial Coin Offering (ICO) and various types of tokens, all of which have different treatments by regulators.

This part features examples of best practice in using payments to solve problems for consumers, governments and businesses. These case studies show that there is no end to the creativity of the payments industry. Creativity in how problems are solved, how payments products and services are distributed, and how business models enable significant returns on investment and growth in shareholder value. You will discover ways in which payments is being used to move money cost-efficiently, in real time, and at near-zero cost. And how behind the scenes, innovation across the payments ecosystem is helping solve problems across different industries.

In this part we answer some of the most pressing questions of our time. How will banks and PayTech collaborate? What is the role of central bankers and global institutions in creating the right backdrop for such collaboration? How do massive data flows being associated with payments create huge risks of privacy breaches and financial crime? And huge opportunities for the payments industry? Where in the world is innovation happening fastest? What identifiers will dominate, NFC or QR codes? How may smart contracts and DLT shape future payments systems? And how we solve the problem of financial exclusion?