In our fourth episode of season two of 15 Minutes With we’re talking to Imran Ali. Imran is a Director in the Payments Consulting Practice at KPMG.

Imran started his Payments career at VocaLink where he worked on the Bacs technology renewal programme before becoming the Product Lead for the delivery of Faster Payments in the UK. Imran then led the delivery of VocaLink’s Sepa service prior to becoming Innovation Director. After this Imran moved to Bank of America Merrill Lynch where he wrote the bank’s European payments strategy. At Citibank, Imran managed the bank’s UK payment services, as well as being responsible for its European real-time payments strategy. Imran then moved to HSBC where he was the Head of Product UK in their Cash Management division, having responsibility for the bank’s UK payments services.

Throughout his career, Imran has worked on several high-profile industry initiatives such as Sepa, Current Account Switching Service, Image Clearing Service, and the New Payments Architecture. He has sat on the Bacs’ and Faster Payments Boards and has been intimately involved in industry forums and discussions.

Imran has written several blogs and articles about payment issues and developments that interest the market, has spoken at industry conferences, and is a listed co-author of “The Paytech Book”

In this episode, he takes us on a brief history of how payments have gotten to where they are today, we discuss current and upcoming trends, ask for advice to improve the checkout process and improve customer experience online and for any tips and tricks he has to offer.


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Shelley  00:14

Today on 15 minutes with we are talking to Imran Ali, Director of payments at KPMG and co author of the paytech book. Imran has worked for the largest banks in the world and pioneered approaches that have transformed globally, how we all make payments, but the world of payments is ever changing for businesses and consumers alike. It can be a minefield, an opportunity or a neglected aspect of business. Imran talks us through how to engage with the opportunity of modern payments and how to do it well, so that it works seamlessly into the customer experience.  Hi, Imran, thank you so much for joining us today.

Imran  00:47

Hi, Shelley. It’s a great pleasure to be here.

Shelley  00:49

Let’s kick it off, shall we? So I just wanted to ask you, could you give us a brief history of how payments have gotten to where they are today from where they were 20 years ago?

Imran  00:58

Sure. Yeah, I mean, I’m a real payments geek. So I’ve been kind of well in the depths of payments for the last 20 years or so. And I’ve got to say we’ve seen a remarkable change over the last couple of decades. If you kind of go back to the early 2000s even, in this country it used to take you three days to make a payment, believe it or not. You want to send your favourite auntie a birthday gift through your bank account, you’d have to time it well to make sure it lands on her birthday. So three days, it would take another take checks five days to clear, right. And that was the norm. That was what most people were kind of accustomed to in 2008, the faster payment service launched in the UK. And that introduced real time payments for consumers and businesses. So we immediately went from three days to instant payments. So that was a real radical shift. And I guess over the course of the last 15 years or so we’ve kind of been building on that, spreading the real time payments, more and more across banks, corporates and consumers across different channels. And just really setting customer expectations in terms of actually having real time payments as the norm for them. Going forward. We’ve come a radical way. And in that time, also, we’ve now started to look at how customers use different channels. So Internet banking 20 years ago was pretty much non existent or very clunky to say the least. Internet banking now is really fast and efficient. And you get lots of great functionality on that. And you don’t just have to use your laptop for it, you can do it on your mobile phone. So you can go into your mobile app, create a real time payment and send it within a few seconds. We’ve also seen other digital developments. So card transactions obviously have grown significantly, contactless was introduced back in 2007. It probably feels like it’s been a long time. But actually, you’ve only launched in 2007, we’ve seen new digital wallets come into the frame. So Google Wallet launched in 2011. Apple Pay only launched in 2014. Right, so it’s been around for less than 10 years. But actually, it’s amazing how many people now use those digital wallets as the norm in terms of how to make transactions at a till or even online by E commerce. So we’ve seen a radical shift going from this quite archaic way of making payments, using very few channels, taking a long time to actually everything’s now at your fingertips and all happening in real time.

Graham  02:57

And it’s interesting to look back as me personally, my bank is an internet only bank that don’t physically exist, well they physically exist, I suppose they’ve got a building somewhere, but I can’t go into a branch and see them. My credit card is a digital credit card exists within the world of PayPal, looking back at where we were and where we’ve come to, it feels like two completely separate worlds, things are only going to get better for want of a better word, I suppose all kind of move more in that direction. Because I’m assuming that the adoption rates for these things are just astronomical at this point, people are just grabbing it with both hands and running with it.

Imran  03:28

Absolutely yes, in the past, when you wanted to make a payment, you typically have to go into your bank, particularly if it was a high value payment, particularly with a cross border payment. So you wanted to make an international payment, you probably have to go into your bank. And I remember doing it having to fill out a whole form and handing that in, you know, to the lady behind the counter to actually send that international payment across. And now you don’t have to go to a bank at all, you can do it on an app without having to talk to anybody. And actually if something goes wrong, you could probably track it on the app as well and get the information on the app. And you’d probably get through the whole process without having to see or talk to anybody that sort of efficient it is and how fast it is. And actually the predictions are going forward that we’re going to move to more and more digital payments. If we look at the latest market summaries, debit card transactions are already at 48% of total number of transactions that are made in the UK. So half of transactions in the UK are via debit card, that’s at 19 billion transactions, that’s going to grow to about 24 billion in the next few years. Faster payment transactions real time transactions, they’re currently at about 4 billion that’s gonna grow to just under 6 billion in the next few years. Digital wallet transactions, they’re currently at 10% of POS transactions. So when you’re paying in the store by 2026, that’s gonna grow to 15% of transactions. We’ll continue to see a rapid growth in terms of these online digital real time transactions. And to go with that you’re going to continue to see this growth in terms of dealing with that transaction online. Not having to talk to anyone, not having to go into a physical building, doing it all on your app, getting problems resolved in your app, and of course going forward probably speaking to chat bots more and more on your phone or online to resolve queries and answers.

Graham  04:59

So the big game here for retailers is to make sure that they’re aligned to be able to accept these things, right? Because I use Apple pay all the time, and you get to a website that doesn’t have Apple Pay, and then you go, please have PayPal, and then they don’t have PayPal. And you’re like, you know what, I’m going somewhere else. So I’m guessing I’m not the only one that thinks like that?

Imran  05:16

Absolutely. Yeah. So I think there’s a delicate balance here between how merchants and retailers offer ubiquity versus actually having a preference in terms of how the customer wants to pay. So for example, during COVID, we saw a lot of retailers, particularly small businesses refuse to take any kind of cash because there was perceived health risk around it. But also, because cash is quite expensive to process. So actually small businesses, for them, they prefer not to use it at all. So they prefer card contactless transactions instead. And now we’ve seen that diluted a little bit now that that lock down period, and more and more businesses are starting to take cash. But actually, how do you offer the broadest range of payment choice for your customer? But at the same time, how do you also balance the costs of those, so making an online faster payment transaction from account to account from my bank to your bank as one of the lowest cost transactions for a bank to process, if you look at card transactions, actually, card transactions are more expensive, but everyone’s got a card. So if you’re a merchant, you’re willing to say actually, I’m happy to pay the extra cost, because I know the likelihood is my customers are going to have a credit card or a debit card in their pocket. Same with Apple Pay, or Google Pay, or one of these other digital wallets. Actually, I’m happy to pay the cost for those because I know that actually a lot of my customers would prefer to use their mobile phones to just tap and pay for their cup of coffee or whatever it is in the morning. So it’s that balance between offering that ubiquity of channels versus balancing the cost of those and more established mergers, more established retailers are going to be going more for that ubiquity. So they’ll accept everything and anything, but you’re right Graham, it is about keeping up as well. So how do retailers continue to keep up with the trends keep up with how customers want to pay the behaviours, etc, etc? How do they continue to offer that choice to consumers? Absolutely,

Shelley  06:52

Thank you for covering off the history of how far and how fast things have come. Because I think sometimes we forget to stop and look back to really appreciate how we were living, you know, and we all experienced that having to line up at the bank and go through all of these slow, painful transactions. And that was another lifetime in sort of recent history. And then you’ve also covered off some of the stats of how the market is going to progress in the future and how things are going to continue to become more efficient, faster, more seamless, and really feed into that customer experience for people. But are there any downsides to that super slick, super efficient process?

Imran  07:26

Yeah, unfortunately, there’s always the downside, there’s always a counter to the benefit. So one thing that we’ve seen, particularly in the UK and increasingly internationally as well is an increased prevalence of fraud. Faster Payments, unfortunately, also means faster fraud. So what we’ve seen is in the UK, more and more examples of what we call APP scams, so, authorise push payment fraud. So these are basically where a customer has been duped into actually going in and making an online transaction. So it’s not that someone’s gone into their account and taken money out, they’ve gone in into an online banking app and chosen to make that payment, but actually on a false premise. So it could be because they received an email or a text reporting from the government or from a company or utility company that they know that saying something like they need to pay some money, or that there’s been a fraud on their account, and therefore they need to move that money to another account. So they then made a conscious decision to go on there. But the premise is false, it’s a fraudulent transaction. And there’s a criminal behind it. And we’ve seen those scams increase in rate and in value over the course of the last three or four years. And that’s an unfortunate downside. Now the industry is sort of reacting to this, the regulator has introduced a reimbursement scheme, which is currently voluntary for banks basically says, if you lose money in this way, we will give you your money back, that’s going to move to a mandatory scheme where banks will have to do that. And there’s some discussion around exactly how that’s going to work. There’s also been an introduction of a greater friction into the actual payment process. So we’ve kind of gone in this radical journey, which was really slow and clunky and heavily processed, to almost instantaneous real time transaction, which is happening more and more seamlessly, I think the industry is kind of recognise this and kind of going hang on a minute, we just need to slow it down maybe a little bit, but I want to slow the transaction down. But maybe we just want to add a bit of friction into the process, we can actually start to introduce some balances and checks for the customer. So something called confirmation of payee was introduced into the UK a couple of years ago, most of the large banks have adopted this. And what that does is basically it says when you enter the account, and that account name and account details, or the person that you’re trying to pay, it will do a check against the beneficiary account, and it will see if it matches and if it doesn’t match, it will give you a warning. And it will say hang on, these details don’t match. Are you really sure this is who you want to pay.  That’s actually helped in terms of making the customer just a bit more conscious of that payment. Oh, hang on a minute, do I really want to make this payment? Is this right? Am I really making to the right person and just pausing your thinking and that’s been welcomed amongst the industry in terms of an active measure that can help people just reduce those kinds of fraudulent transactions. There’s also talked about how the banks can collaborate further with social media companies and with telcos to actually try and prevent some of these phishing scams and other scams taking place. So that we kind of identify quite earlier on whether this is a fraudulent transaction or not. It is an interesting area, because one of the things that we’re seeing a trend of and one thing that I think will happen more and more in payments is something what we call embedded payments. So these are basically you can almost sense the invisible payments that happened in the background. I guess the best example is a well known large international ecommerce conglomerate that has launched a store where you can go in, scan your app, pick as many goods off the shelf as you want, and then walk out the door and you haven’t actually done a payment transaction physically, yourself, but in the background, the monies taken out your digital wallet or your card. We can do that for taxis now, as well as shopping. And actually now we’re starting to see going forward, is that going to be a trend? Do you roll up to a petrol station to fill up your tank and then just drive off and the payments taken automatically? Do you walk into a cinema screening, and it just recognises that you’re there and recognises your card details and automatically takes the payment for the ticket without you having to do anything. So embedded payments are a trend that we’re starting to see. And I think something that is going to grow more and more, but actually does that just open up the door to potentially some fraudulent transactions or actually mistakes. So payments taken an error, the cinema screening whatever took two payments instead of one or charge you the wrong rate. There are things to think about. And I think the industry generally what it tends to do, it tends to burst forward in innovation and then go crikey, there are some things we need to fix and then quickly catch up with regulation and other measures that kind of just start to sort of fix some of those things that don’t quite work quite right. I think we need to get better at that. So we can innovate, but innovate sensibly, and we innovate with some measures and some protections, I think that’s probably what we’re going to see going forward. But there are unfortunately, real downsides. But the industry is looking at those and and trying to work with those.

Shelley  11:31

I was actually just going to say with the embedded payments, that opens up a potential can of worms, particularly if you go on holiday to a sort of a cash economy, location or destination, waltzing around in and out of the stores without paying because you’re just so used to it all being deducted automatically in the background without actually stopping and thinking and like you said, with some of these taxi apps and large e commerce sites where you have your account, and it’s all totally taken care of. It’s becoming so easy to overspend without consciously thinking about tallying what you’re spending each month and how that sort of working out. Are you overspending or underspending, you know, when you have to queue up in a bank, 15 minutes, it really makes you think about that. Do I really need to be here? Do I really need to be spending this so I completely understand where you’re coming from with there needs to be a healthy amount of friction. And so it’s all very well having all this progress. But actually, we do need to check ourselves from time to time and check the industry and going, Oh, hold on, we need to have a few safe barriers in place just to balance out that risk of fraud, but also individual behaviour.

Imran  12:31

Absolutely. Yeah. So I think one thing I saw a study done recently, which showed that millennials are sort of that younger generation, I guess I’m part of the past it generation are actually increasingly using cash more and more, the general trend around cash usage has always been on a decline for many years and continue to do so. But we’re seeing some people actually start to use cash more. The reason for that is because when you’re paying for something, and you actually have to physically count out, 10 20 pounds, 30 pounds, that really makes you think about how much money you’re spending there and then. Whereas if you actually swipe it on the card or swipe your phone, you don’t have to worry about how much it’s costing, it really makes a difference into the psyche. And actually, it’s a real trend that we’re seeing at the moment, I think you’re right Shelley it is something that we do have to be aware of one thing we’ve seen is a real explosion in Buy now pay later services. So these are where you try to buy some goods, typically online, and you get offered the choice of paying for those goods in instalments over three months or so with no extra charge. But at the end of three months, if you haven’t paid it off, there will be a charge and a late payment for your interest or on their on what we have seen is people starting to get into debt because they’ll go on one site and buy entering into a buy now pay later agreement and then go on to another site. And they do the same again, another site. And so we have people who are about 10 By now pay later agreements in flow. And actually by the end of the three months, they realise oh my god, I owe 10,000 pounds, and I can’t afford to pay this. And again, there are moves by the regulator to bring some regulation into that industry, because it’s not regulated at the moment. And actually to put some liabilities and some mandate those firms to put some protections in place for customers. But But you’re absolutely right. We do often open up a can of worms in terms of people falling into debt, not knowing how much they’re paying, which we have to really be wary of.

Shelley  14:03

It’s all part of the customer experience at the end of the day. I mean, there’s the immediate customer experience with respect, they don’t offer PayPal, how annoying or I want to use credit card, or the whole checkout process is seamless. That’s really, really important. We know that. But equally important is as you say, the longer term effects of well, if customers ended up getting in debt as a result of this, everything being too simple and the ability to overspend so easily, then that’s an issue too. And that needs to be something that businesses are taking into account. So we’d like to ask you, do you have any tips or tricks that you can recommend to businesses, people listening that they can apply to really get started on their own payments journey that can help to support a better customer experience?

Imran  14:45

Absolutely. Yeah. So for businesses in particular, I think for a long time and maybe still is the case in some situations for online journey payments has often been the end bit that people just don’t really worry about or forget about. So actually the online journey for purchasing goods and looking at catalogue of goods on site is great. And we get to see all sorts of products in different shapes and sizes and colours. And that’s great for a customer’s perspective. But actually, when the customer wants to go and pay for it, the process is not great. It’s clunky got to type in lots of details. It’s very slow. And so we tend to see a high dropout rate for customers at that point. And what’s happened over the last few years as we start to see more online payments growing and more and more companies going online and supporting ecommerce companies started to focus a little bit more on that part of the process. Firstly, how can the payment checkout process be as streamlined and as great as the rest of the process, but I would encourage businesses in particular, to focus a lot more on that. So think about your payment process as part of the whole online journey. How can you connect the whole process and the whole experience together? And what does that customer experience look like? So when a customer goes to the checkout page, how are they offered as much choice as possible in terms of payment, but also clarity in terms of what they’re buying? How much it’s costing, and if the customer wants to change their mind, the ease of actually being able to deduct goods, and then the total being updated seamlessly, but then also when they want to make a payment for that to be taken seamlessly. Is there a clever way of a customer who keeps coming back to store that card details, for example, or to support online payments, one trend we’re seeing is a greater prevalence of what we call account to account payments. So this is basically where customer instead of typing in their credit card details can simply request that they pay via their bank account directly. And this is something that’s being supported by what we call open banking in the UK. And what that does is simply redirects the customer from the ecommerce site to their online bank, where they log in, the transaction is recognised on there, they confirm they want to make a payment, the press yes, and then they get moved back on to the retailer site. And what that is, is a seamless way of customers making payments directly from their bank account without having to enter any card details at all, without even having to use a card. And we’re seeing that a lot of customers prefer to use this because some customers don’t have a card. They don’t like typing in 16 digits, but also they like the security and the budgeting aspect of paying from their account early as well. So actually do retailers want to think about offering that kind of capability to their customers as well.

Graham  17:04

Awesome. Thank you so much for joining us on this episode. Everything that you’ve given us is massively invaluable. Thank you for taking us on a history of how we got to where we are and kind of giving us an insight of what’s to come.

Imran  17:16

It was a pleasure. Nice talking to you about thanks, Shelly. Thanks, Graham.

Shelley  17:19

That was Imran Ali, Director of payments at KPMG. talking to us about payments and how they’re critical to customer experience journeys, how they can go well, how they can go horribly wrong, how trust and security and payment processes is vital and how just the right amount of friction is so important to the overall customer experience.