How people pay in the USA – Fed Reserve Payments study 2016


The Federal Reserve has just reported their estimates of the total number and value of all noncash payments made in 2015 in the United States, both by consumers and businesses. The study provides insights on adoption trends for new payment methods. Main findings of the study may be considered under 3 key areas:

(1) Differences between consumer and business payment choices in 2015 and changes over the 15-year period since 2000

No surprise, check payments are being replaced with card payments and ACH transfers. In number, check payments dropped from  57.8% of non cash payments to 13.4%. By value the drop was from 66.7% to 15.4%. However this still remains high in comparison to leading European economies that have considered altogether doing away with checks.

Total noncash payments by households increased by around 94.7% over the 15 year period, again no surprise as this period from 2000 to 2015 precisely marks the growth period for electronic payments worldwide.

New methods studied included payments initiated via a mobile device (for instance mobile wallet), payments through specialized services for person-to-person payments, and the use of online or Ecommerce payment authentication services to help verify the payer and secure payment information.

(2) Adoption and intensity of use of different types of general-purpose payment cards in 2015, along with more recent changes since 2012

Consumer and Business payments differed in terms of popularity of payment type. Top four consumer payment types were non-prepaid debit cards, general-purpose credit cards, checks, and ACH debit transfers, with the first two categories substantially in the lead. The top four business payment types were ACH credit transfers, checks, general purpose credit cards, and non-prepaid debit cards. The number of checks written is still alarmingly high as compared to that in many Western economies such as the UK, that have made the transition to instant electronic payments.


The figure above, drawn from the Federal Reserve report illustrates the way in which US consumers and businesses pay and how this differs in terms of payment type.

(3) Growth in selected alternative payment initiation methods and services

Over the 15 year period there was strong growth in the number of mobile wallet payments, but online bill payment through banks increased only marginally as payments can now be made directly to billers. The figure below, extracted from the report shows the change from 2012 to 2015.


Although P2P and money transfer payments increased over the period, they remain very low by number. Online payment authentication methods on the other hand grew from 1.8 billion in 2012 to 3.4 billion in 2015.

The full study report from the Federal Reserve may be downloaded at The Federal Reserve Payments Study 2016: Recent Developments in Consumer and Business Payment Choices, June 2017.

Amazon’s new Subscribe & Save Offer: Could prove sticky?


As I report that Amazon has been making further inroads into the UK online shopping market, I realise it is probably an under-statement. As it was our go-to provider long before the holiday season it is no wonder we got most of our gifts from them, availing of the great selection of offers during November/December. Free home delivery, the peace-of-mind from trouble-free returns and refunds and a most reliable service has made Amazon the darling of many Brits over the recent past, as can be seen from the volume of reviews pouring into the site.

I was interested therefore to notice today that their “Subscribe&Save” offer earlier launched in the US is now available in UK. The offer claims to provide regular users the ability to save up to 15% as well as gain free shipping on recurring deliveries. To me this seems to be yet another step in the evolution of Amazon from book supplier to online provider of the first resort. For UK shoppers who are now spoilt for choice of online retailer with most grocery stores offering great home delivery options, this appears to be designed to tempt us away, for purchases of a wide range of household shopping items, of which a vast array has now appeared on the site. With its legendary knack of mind-reading Amazon quickly suggested a few items that I had already bought on a number of occasions, while I was checking out the offer.


I must admit this looks promising but also from my past experience from launching digital content services in the UK, I recall the “Crazy Frog” incident where junior mobile subscribers unwittingly found themselves with costly subscriptions, I am sure there could be a number of issues that must be navigated by the marketing team to ensure that people don’t end up with deliveries they did not expect and suppliers don’t have to contend with higher levels of refund.

Within an overall great experience, I found one particularly irritating feature. Introduced over 2015, their “Add 0.01 p to get free home delivery” never fail to irritate our household, and probably a lot of UK online shoppers. A number of desirable products are priced at £19.99 (Why?). However, one needs £20 of “applicable items” for home delivery and finding out what is applicable is quite a chore. For people who would like to save around£4 delivery cost this means a thankless job of looking through “Add-on items”. The concept of Add-on is itself an admirable one as it is a way for sellers to offer small items online. However, believe me it can be most irritating to find an item that qualifies for the 0.01p required, heave a sigh of release and lug it into your online basket only to find that it’s not made your delivery cost go away.

Not to mention the additional time you are forced to spend trying to save money on Amazon must come with a health warning as one can end up buying so much more than one planned – the shopping experience is so slick that it can be quite addictive! I think the same will soon be said of a number of the online stores that are burgeoning in the UK market, and as a delighted consumer I am not complaining (yet?).

PS: For full disclosure, I am not connected with Amazon in any way, apart from being a shopper and a passionate observer of the way money is going digital, to power payments and commerce around the world.

Global Payments – Looking back, looking forwards


Celebrating our achievements, strategizing for the future

1910 Happy New Year PostCard 4230867631_74bd04dc8a_o web It is easy to find fault in company launches, but as a former product manager I fully understand the courage it takes to even get to the market in the face of uncertainty, and the myriad factors that stand between you and success.

So I invite you to take a few minutes to reflect with me on some of the things that went right last year. This is by no means a comprehensive list as I am aware I would need reams of E-space to cover what I see happening in each market. I am hoping you will add your thoughts, to help create a more comprehensive picture, for all to enjoy.





We’ve come a long way over 2015

  • Online payments fuelled E-commerce in such a big way over 2015 – I did most of my holiday shopping online for the first time this year, along with millions of others around the world
  • New business models have found incredible ways to leverage new ways to pay – Uber, AirBnB and others, have grown at unforeseen speed and become part of daily life
  • Fintech has grown substantially and has attracted some of our brightest talent – what a great achievement from start-ups around the world
  • Payments is disappearing and getting embedded on the one hand, but is also rising in public awareness through mainstream adverts– PayPal, Apple Pay and other ads have regularly hit the UK TV, but this is small considering the kinds of campaigns in India with Bollywood heartthrobs roped in to support emerging mobile wallets, for instance
  • Apple Pay did manage to launch in multiple markets, with an intuitive user experience and helped ignite re-interest in NFC, and investment in many more services
  • Huge strides were made in biometrics with payment by face, voice, fingerprints and more
  • Millions of people received identity and connectivity for the first time, thanks to cheaper mobiles, smart phones and data becoming available opening the door to mobile money services that can help lift themselves and their families out of poverty
  • Wearables took big strides forward, with the ability to pay using your watch hitting markets for the first time ever
  • Banks have had to wake up and smell the coffee – I’m hoping for better, cheaper and more down-to-earth, back-to-the-people banking, now we have alternatives
  • Faster Payments took strides forward. Kudos to Vocalink for their work in Singapore and now the US, certainly living in the UK I daily benefit from their systems here

But there is so much more to achieve!

  • So much more needs to be done in Biometrics before it can truly become effective for mainstream use – let’s hope we see progress in standardisation as pioneering providers start to work together
  • Small value payments are the Holy Grail of payments and despite work of over a decade on this, I don’t think we are there yet – so much more scope for cheaper, faster and more secure ‘tiny’ payments
  • Cyber security is an area in which one can never do enough. With the increasingly connected systems, weakest-link analysis is critical, and end-to-end testing must be effectively managed across platforms of multiple providers
  • Opening up banking to make it more competitive is a journey that has only just begun. Can banks really be allowed to make our data available to third parties, have we been consulted about who will have access to our data?
  • It is time to revisit an age-old area of customer loyalty and how to get, gain and keep it - as the digital age introduces so much of cross-channel complexity
  • As we enjoy the huge benefits of online services, our data privacy assumes critical importance. We are leaving trails behind that if connected could have great impacts on our well-being, this again is an area of work that is still at the starting line

How will we get there?

In all the projects I’ve been a part of over the last decade, the key success factor has been top management action. Enlightened top management can wield enormous power in making things happen, while they can also be thoroughly destructive, casting asunder years of team effort in the time it takes to write a single email.

Fortunately, whether we will get there or not is no longer in the hands of large corporations. Born with mobile phones and tablet PCs as their personal toys, and brought up on a diet of computer games, social media and connectivity in a shrinking world, I see our youth taking us into bold new frontiers in terms of the way we pay in the coming years. The question is whether our regulators will also dig deep into this pool of emerging talent to keep things competitive and yet safe for us all.

Have a Great New Year 2016! Thanks for reading our blogs and do share our journey in 2016 and beyond.

Join community discussions on this topic at LinkedIn and Finextra.