Report Explores a New Era for Digital Payments

Following a white paper, Going digital: payments in the post-Covid world, The Economist Intelligence Unit (The EIU) published in 2021, which showed how digital channels were replacing traditional modes of payments across the world amid greater uptake of mobile wallets and other forms of digital payments, The EIU recently developed a new dataset, along with five-year forecasts, confirming these trends. Entitled Beyond borders: a new era for digital payments, this white paper offers an overview of The EIU's forecasts for digital payments, as well as the accompanying stagnation of automated teller machine (ATM) numbers and the mixed outlook for card payments. It also looks at the new frontier for disruption: cross-border payments.

Below are the paper's key forecasts:

• Following a surge during the pandemic, when lockdowns forced consumers online, growth in digital payments will soften during our five-year forecast period (2022-26).
• The number of ATMs will stagnate or decline, while debit and credit cards will struggle to maintain market share as mobile payment platforms gain more traction.
• While digital disruption to domestic payments continues, the ongoing Russia-Ukraine war will cause parallel disruption to cross-border payment systems and potentially challenge the dominance of SWIFT.
• Countries will seek to interlink their national fast-payments systems, reducing intermediaries and bringing down the cost of sending money abroad.
• Countries across Southeast Asia are in the process of interlinking their fast-payments systems to allow travelers across the region to purchase goods and services by scanning quick-response (QR) codes.

The report also points that APIs, tokenization and blockchain will together become the new normal. "As well as challenging SWIFT, disrupting cross-border payments will mean adopting innovative solutions and emerging technologies, including blockchain, APIs and tokenization."

• APIs have been a game-changer for retail payments, providing end-to-end tracking of payments and confirmation of transactions to all parties involved. They enable interaction across the digital marketplace, higher levels of transparency, and a seamless experience for both customers and merchants.
• Tokenization, which creates a unique code for every single transaction conducted through an API, and blockchain technology, have also emerged as a major way to ensure security, improve efficiency and raise the transparency of payments.
• Blockchain technology employs encrypted distributed ledgers that eliminate the need for any intermediaries but still provide verification of transactions in real time.
• As with domestic payments, real-time payments will also become a cornerstone for the acceleration of cross-border payments.

With respect to governments encouraging development of cross-border payments linkages, The EIU expects "increasing involvement from government entities to facilitate the development of the fintech sector, promote financial inclusion or aid the flow of remittances from overseas workers." The paper further says "Singapore (with PayNow) and Thailand (PromptPay) were the first countries to interlink their fast-payments systems in April 2021. More countries, especially in Asia, have since unveiled plans for similar tie-ups." Importantly, "This process will also be facilitated by the development of central bank digital currencies. These digital currencies aim to provide efficient and inclusive payments services—which traditional systems have failed to provide—and also emerge as trustworthy alternatives to private projects such as stablecoins, cryptocurrencies that (in theory) peg their value to another currency or commodity."

At the same time, the paper notes that "countries like Russia, China and India could encourage international trade denominated in their own currencies, or enter into bilateral trade agreements—between the rupee and ruble, for instance—to avoid settlements in dollars or euros." What is more, "Although the US dollar’s dominance of international trade will remain unchallenged in the short and medium term, emerging powers in Asia will try to reduce the greenback’s influence to avoid runs on their foreign-exchange reserves and mitigate the impact of any future disruptions."

The report provides a thorough explanation on how digital channels are replacing traditional modes of domestic payment around the world amid greater uptake of digital wallets and other forms of mobile transactions. Moreover, businesses of all sizes will find value in The EIU's latest forecasts for domestic payment flows and the deep-dive into the future of cross-border transactions.

How is your business taking advantage of the digital disruption of cross-border payments?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Smart Investment in Emerging Technologies Can Help Address the Challenges Faced by the Global Giving Sector

Emerging technologies such as artificial intelligence (AI), blockchain, and internet of things (IoT) is having a profound effect on how businesses worldwide operate. However, less is known how these technologies are impacting the giving sector. A report produced by The Economist Intelligence Unit (The EIU) and supported financially by the Bill & Melinda Gates Foundation presents the key findings of a research program on the potential impact of ten emerging technologies in the giving sector. Venture into the future of giving: The potential of emerging technologies in the giving sector highlights ways that smart investment in emerging technologies can help address the challenges faced by the global giving sector.

The report argues that "Fourth Industrial Revolution technologies are transforming the development assistance and giving sectors, from using AI and machine learning to diagnose diseases to implementing drone-based humanitarian logistics. However, their potential impact on the giving process remains underappreciated to date."

Having served in leadership positions of various nonprofit organizations, I understand that "[w]ithin the giving sector, donors, intermediaries and implementing organizations operate in a complex global giving supply chain, which encompasses a wide variety of stakeholders including corporations, academic institutions, watchdogs and governments, among others. Each participant in the supply chain faces both unique challenges and challenges that are common across the sector. For the purposes of this report, we focus on three of the sector's most noteworthy shared challenges: 1) building and sustaining trust, 2) increasing efficiency, and 3) measuring and maximizing impact."

"There are ten key emerging technology applications," the report explains, "that have the potential to enhance the workings of the giving supply chain: big data, AI analytics, virtual reality (VR), augmented reality (AR), cryptocurrencies, blockchain payment infrastructure, the IoT, drones, smart contracts and impact tokens. All of these applications are powered by four core technologies: AI, virtual intelligence (VI), blockchain and the IoT."

Moreover, "These technologies can be applied to five key links in the giving supply chain: matching donors and recipients, motivating and informing giving, facilitating transactions, tracking outcomes and validating performance."

Below are the report's key concluding points:

To support donor and recipient matching, big data and AI are helping charitable organisations to understand more about the views, behaviors and opinions of current and future donors, and about trends in the giving sector. A key challenge is determining how to take advantage of the benefits of analytics in a way that does not impinge on privacy and is compliant with relevant regulations like the GDPR.

To motivate and inform giving, VR and AR are allowing donors to see the impact of their investments, overcoming the marketing and communications challenges faced by the sector in the past. A key challenge is the potential for misuse and manipulation when using a powerful tool to unlock empathy.

To facilitate transactions, blockchain and cryptocurrency can add a new rail to financial infrastructure, with tech companies using these facilities to reduce transactions costs.

To improve outcome tracking, sensors, drones and the IoT can be used to gather data that humans cannot, including on environmental and pollution challenges.

To validate performance, impact evaluation can be facilitated by smart contracts, which promote transparency and enable automated pay-outs when a social program reaches a performance threshold. This gives donors greater control over performance-related disbursements. Tokens can also help to monetize measures of impact and create new economic incentives for donors beyond tax exemptions. 

As I am continually learning how emerging technologies work, I appreciate the report's assertion that [w]hile no single technology can overcome the challenges inherent to the giving process, smart investment in appropriate solutions can ensure that all participants in the ecosystem make optimal use of their resources. The structured analysis of technologies undertaken in this study seeks to provide a guide for groups that are willing to experiment and invest to ensure that the sector's sizable contribution to economic and social development can be deepened and sustained in the years to come."

Although I agree with the report that smart investment in emerging technologies help address the challenges faced by the global giving sector, I am disappointed the report does not address the topic of cyber security. It is important for those stakeholders to understand the cyber threats that exist and have a system in place to keep their technologies secure from hackers. Not doing so will negate the value of any "smart investment."

Do you agree with the report's findings? Will smart investment in emerging technologies help address the challenges faced by the global giving sector?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Blockchain, Robotics, and Healthtech: Observations from CES 2019

Me and my mom attending
the final day of CES 2019

This post is the third and final one reflecting on my experience of attending CES®2019. The first post focused on a report published by AIG, an American insurer, that presents key questions Chief Information Security Officers and risk managers should be asking regarding IoT and cybersecurity and the second post explores a report produced by GfK, a market research firm, on how "Smart Lifers" are increasingly using connected devices and services, but worry about privacy and security. This post looks at some of the companies and products that I saw during the annual consumer electronics show in Las Vegas, Nev.

I appreciate how CES attracts industry attendees, exhibitor personnel, and media from around the world (over 63,000 individuals from outside the United States attended CES in 2018, according to the Consumer Technology Association, an Arlington, Va.-based trade organization that owns and produces CES). During this year's exhibition, I spent time visiting with startups from Qatar, an oil-rich Middle East country with a population of 2.6 million people.

Among the several Qatari companies exhibiting their products or services, I enjoyed talking with Hesham Elfeshawy and learning about At Home Doc, a digital health platform supporting on-demand home doctor and other healthcare services. The application also provides virtual consultation and telemedicine enabled by voice transcription.

The Eureka Park™ marketplace at CES provides startups with a unique opportunity to showcase their ingenuity. Walking around the startup exhibits, I met Tammy Dorsey, the founder and chief executive of Prenatal Hope, a Kansas-based company that created the VivO2, a utero testing device that instantly and effectively reads fetus oxygen levels. Ms. Dorsey said that by measuring a baby's pH level, VivO2 provides attending doctors the crucial data necessary to make confident decisions and accurately detect fetal distress. She added that her company "exists to provide hope for families through reducing infant mortality with our biomedical innovations." (Wichita State University, where Ms. Dorsey received her undergraduate degree and is currently pursuing a graduate degree in  published an article on Nov. 6, 2018 that provides a good overview of the goals Ms. Dorsey is trying to achieve through her company.)

Ellie Smart Pill Box

Regina Vatterott serves as the co-founder of EllieGrid. Her company in Texas created the Ellie Smart Pill Box, a Bluetooth-enabled pillbox for families and individuals with healthy lifestyles that organizes pills by type instead of time. As a result, you can refill Ellie in seconds by simply pouring your pills straight from the bottle into one of the seven appropriate compartments.

In the demo provided by Ms. Vatterott, I was intrigued to hear an alarm and lights simultaneously flash when it is time to take the pills. After opening the device, specific lights were illuminated indicating which pills to take and how many. For those who need to take some pills more than once a day, the user can set multiple alarms through the EllieGrid app.

As an avid walker (and I certainly walked several miles throughout my time at CES), I can appreciate any product that will bring comfort to my feet. The French company Digisole designed the PODOSmart, which is a connected insole that provides gait analysis, facilitates walking balance, 3D motion analysis, and monitors stride pattern, and evolution tracking. For walking in cold climates, Digisole's Warm Series are designed to keep your feet warm.

QTrobot designed for children
with autism spectrum disorder 

Since a close friend and her husband have a daughter with autism spectrum disorder (ASD), I am mindful of products or services tailored to helping people that encounter challenges with social skills, repetitive behaviors, speech and nonverbal communication. Designed by LuxAI in Luxembourg, the QTrobot, an expressive humanoid social robot that is a friend, tutor and teacher for children with ASD. According to a marketing brochure, "With QTrobot, children can learn emotional and social skills in a simplified and engaging manner."

Moreover, "QTrobot comes with multiple educational programs for autism. Each of these programs focuses on one set of skills which is necessary for children to learn in order to be more independent and socially more interactive." It is also worth noting that the LuxAI booth was distributing copies of the findings of a study, More Attention and Less Repetitive and Stereotyped Behaviors Using a Robot with Children with Autism, which is aimed "to access the usefulness of QTrobot, a socially assistive robot, in interventions with children with autism spectrum disorder (ASD) by assessing children's attention, limitation, and presence of repetitive and stereotyped behaviors."

While I still hold some skepticism about the long-term global adoption of cryptocurrency, I do support the underlying blockchain technology as a distributed ledger, or database, shared across a public or private computing network. As such, I found my visit to Pundi X's booth to see their blockchain-based solution for digitalizing any store quite interesting. Zac Cheah, co-founder and chief executive of the Singapore-based company, said customers can conduct cryptocurrency transactions using traditional fiat currency, bank cards, mobile wallets or the Pundi X PASS Card.

SecuX Technology, Inc. is a blockchain security company devoted to developing comprehensive solutions to secure people's valuable digital assets in blockchain. The Taiwanese company lists the following security features for its SecuX Crypto Hardware Wallet: A CC EAL 5 certified SE to secure private key and device PIN from attacks; tamper proof firmware pre-load and upgrade mechanism; a personalized PIN code or one-time-password to control the access to device or wallet applications; randomized digital keypad to avoid following keystrokes; physical confirmation for each transaction to avoid man-in-the-middle attacks; and anti-tamper packaging. Howard Liao, Managing Director of SecuX's European office in Germany, said the SecuX wallets support cryptocurrencies such as BTC, BCH, ETH, LTC, XRP and ERC-20 for the time being.

I had a wonderful conversation with Alex Mashinsky, the founder and chief executive of Celsius Network, a blockchain-based borrowing and lending platform, founded in the U.K., whose goal is to bring the next 100 million people into cryptocurrency. Mr. Mashinsky said his company is providing "a new way to earn, borrow, and pay on the blockchain."

Based in France, Billal Chouli, founder and chief technology officer of NeuroChain, said his company "is the next-generation of blockchain technology that improves the security, reliability, and scalability of current blockchain protocols." Dr. Chouli added that NeuroChain "is the first genuinely decentralized, energy-efficient blockchain, powered by machine learning and artificial applications."

Mark Mueller-Eberstein and Phil Klein
talking with attendees from their book talk

One more item to mention is my attendance of a book talk featuring Mark Mueller-Eberstein and Phil Klein, co-authors of The Trust Technology: How Blockchain is changing your world. You can watch the discussion in its entirety through this link or the video embedded below. (I will publish a review of the book in a future post on this blog.)

If you attended CES 2019, what did you see that captured your attention or imagination?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.