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The Evolution of Payment Platforms

August 24, 2015
Joyce-Ann Wainaina, CEO of Citibank East Africa

From the invention of the ATM, to the development of mobile money, payment systems around the world have rapidly evolved over the past 40 years. Payment platforms and systems have gone from merely being structures that support the financial market to being social infrastructures that support all economic activities. Driven by technology, payment systems, which have long been viewed as "background" activities, have now become central to the day-to-day activities of the entire economy. The disruption caused by technological advances means that banking models have had to be reshaped to suit the new environment. Current generations are no longer satisfied with "cookie-cutter banking". In the age of fast internet connections and powerful smartphones, banks have to restructure their models to ensure that they provide service that is quick, accessible, flexible, personalised and relevant.

The Global Entrepreneurship Summit (GES) held in Nairobi in July, brought together various stakeholders from the financial services industry and technology space, entrepreneurs and innovators, in a single forum. Launched by President Obama in 2009, each year the Global Entrepreneurship Summit brings together entrepreneurs and investors to showcase innovative projects, exchange new ideas, and help spur economic opportunity. This year, the GES agenda focused on generating new investments for entrepreneurs, with a particular focus on women and youth. Citi is proud to have been a sponsor the Global Entrepreneurship Summit and be an official sponsor of the president's initiative to advance entrepreneurship around the world.

The selection of Nairobi as host city for the GES underscores how Africa – notably Kenya – has become a centre for innovation and entrepreneurship. Kenya is a world leader in mobile money systems such as M-Pesa, and a driver of innovation through technology research and incubation labs like "iHub". The Global Entrepreneurship Summit provided a forum for discussions surrounding the payments landscape, ranging from mobile money, the game-changer in emerging markets, to cryptocurrencies. Digital currencies were also discussed in depth, with topics ranging from uptake and adoption to the anticipated impact on existing payment platforms. With the continued convergence of finance and technology, it is expected that new financial services will be made possible by riding on not only mobile money but also on cloud-based wallets.

Adopting technology may be viewed as an uphill task by some, but banks must leverage these new technologies to expand their reach to all corners of the economy and remain relevant. Originally seen as a threat to the banking industry, technology has become a key driver for financial inclusion. It is through partnerships with technology partners that banks have and will continue to support not only those in the formal banking system but beyond. These critical partnerships have already enabled traditional banks to serve a broader set of people, from the formally employed, to entrepreneurs and even farmers far removed from the formal banking system.

Recognizing the importance of technology in payment systems, Citi is committed to identifying and supporting technology entrepreneurs through initiatives such as the Citi Mobile Challenge. Through a test and learn approach, and collaborating with top talent globally, Citi will be able to deliver what our existing and future customers need from their bank in the digital age.

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