A historic shift is underway in how we make financial payments. The monetary system is moving inexorably towards digital payment systems, with implications for all businesses, large and small.
World expert in digital payments David Birch was in Armidale on 14 November, sharing his insights on the future of payments and how they will change the nature of business.
Mr Birch was hosted by the UNE SMART Region Incubator (SRI), with support from PayED, a platform that specialises in providing education about new payments systems.
A world of solely digital payments may not be as far away as we might think, Mr Birch says. The transformation has began, and he expects a major shift to be underway within 3-5 years as stablecoins (cryptocurrencies that attempt to peg their market value to some external reference) and the Central Banks Digital Currencies (CBDCs) – digital money instead of physical money – gain credibility and acceptance.
Digital payments will revolutionise the underlying mechanics of payments, like removing the friction and therefore the transaction costs currently associated with payments. But to ensure they carry the trust now invested in physical payments, a robust global digital identity infrastructure must be built that supports due diligence for e-money payment systems.
Once credibility has been built in digital payments systems, Mr Birch believes they will continue to support the same forms of exchange developed with physical currencies.
“For reasons of both resilience and inclusion, next generation payment technologies and in particular the coming CBDCs must work offline and support transactions in areas with poor or no network coverage,” Mr Birch says.
“I should be able to buy something at a farmers market even if there is no mobile network, no internet connection and no electricity network.”
Mr Birch addressed the opportunities for businesses, large or small, to capitalise on digital payments, and looked at how businesses can prepare for a world of digital identities.
The seminar at SRI’s NOVA premises was chaired by John Ryan, Founder of PayED and included a panel discussion and Q & A featuring Chris Hancock, Chief Executive of AARNET; Jason Latham, Chief Information Officer of Shaype; and David Birch, Global Advisor and Investor in Digital Financial Services.
