In Celent's second edition of their annual payments trends review, they review the "top 10" payments-related issues that Celent analysts dealt with in 2011 and expect to see further developments in 2012.

Last year, Celent noted a sustained pace of payments innovation. If anything, in 2011, the innovation pace increased, and the market became even more competitive. Visa and MasterCard continued on a trail of acquisitions and partnerships in their transformation journey from card networks to payments companies and beyond. American Express and its Enterprise Growth team have been busy launching products and announcing digital initiatives of their own. China UnionPay became the largest card scheme in the world.

As expected, mobile provided the story of the year in consumer payments innovation. With Google Wallet up and running and other initiatives in the works, mobile is finally entering the high street. Although mobile at the retail POS remains years away from being mainstream, different visions will compete fiercely.

Security in payments is a must. Mobile devices and increased connectivity are raising the bar for security requirements and create new roles in the payments ecosystem, such as Trusted Service Manager. Also, the questions around EMV in the US are rapidly moving from "if and why" to "when and how."

Just like security, making use of available data is increasingly a must for a successful payments business. Big Data, a buzzword of 2011, has been accumulating ink and conference air time. However, Celent's view is that Enterprise Intelligence, an effective application of customer, business and transactional intelligence would be far more effective. When it comes to analytics and data, banks should walk before they can run.

Durbin continued to dominate the debit cards and broader retail banking discussions in the US. The rules have been announced, and the industry has been busy interpreting, implementing and responding.

However, almost no one is happy, and we think this story is far from over. In Europe, the looming regulatory end date for SEPA is expected to force the procrastinating banks to get ready. Not that it will be easy, especially if the impact on corporations is going to be as large as feared.

However, still more regulation and standards seem to be about the only certainty in uncertain times. This, combined with the need to balance product enhancement and operational efficiency, puts most of the IT budgets in transaction banking on a knife-edge.

At the infrastructure level, the clear trend is towards faster payments at all ends of the spectrum, including low-value payments. Many countries are either implementing or planning to implement same-day or near-real time payment processing infrastructure. In the US, if NACHA's proposal for same-day services wins the vote in Q1 2012, it would become mandatory for all participants, presenting banks a number of challenges to overcome, from technical issues to questions of how to price the payments.

Finally, in 2011 Celent has noticed the initial signs of a trend towards a fundamental rethinking of the transactional retail account. Although this is not a trend with short-term impact, it should be considered by anyone seeking differentiation from a crowded marketplace and investing in new technologies.

ZILVINAS BAREISIS and GARETH LODGE are senior analysts in Celent's Banking group, a research and consulting firm focused on the application of information technology in the global financial services industry. For the full report, please contact


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