Open Banking Expo’s Ellie Duncan caught up with Tim Corke, chief customer and strategy officer at Token, about the ‘unstoppable’ momentum behind the adoption of account-to-account payments and the many use cases for this payment method.
1. What does your role at Token entail?
Everything customer facing – I cover technical pre-sales, which is the bit before the sales team close an opportunity. Supporting customers to understand our platform, through to technical implementations, which supports integration with our API, testing across Europe and then service management, programme and project management, customer success and account management. I joined full-time in May last year. 
2. What makes the momentum behind APIs and the adoption of account-to-account (A2A) payments ‘unstoppable’, in the words of Token CEO Todd Clyde?
It’s no secret that payments have been historically dominated by cards and wallets. History also tells us that technology is often the driving force of change. For me personally, the reason I think it’s unstoppable – to coin a phrase from Todd – is I’ve been closely involved in a journey similar to this before. When payments started going to mobile, both acceptance and outbound payments, it was a really tough journey. Technology providers were battling a quadrant of issues. The evolution of mobile technology itself (the speed at which it was changing), longstanding traditional merchant behaviour, very traditional banking environments and technologies, plus a huge swing in consumer behaviour and a willingness to adopt around both mobile and banking.
Fast forward to today’s environment with A2A payments, mobile technology itself is no longer an issue, merchants are infinitely further ahead in their technological practices and their approach to the market. Banking platforms, while they’re still maturing, are mandated to be easier to work with, which is a position we’ve never been in before in a technology-led environment. And consumers are, generally, driving the need for a better mobile and banking experience anyway, so their adoption is quicker and broader. In short, when I look at all those factors put together, I can’t see how it can fail.
3. What are the fastest-growing use cases for A2A payments?
The use cases we see particularly at the moment are high ticket value items, which clearly drive cost savings from a merchant perspective. Examples are in the travel or automotive industries.
We’re also seeing user uptake in debt repayment. I believe there’s a multitude of factors driving that use case. Where consumers are dealing with their debt, it is often very sensitive and if there’s a clean user experience within that environment, I believe it gives them a willingness to operate differently and more easily. When they’re working within the app or the website environment of their banks or issuers repaying that debt, the trust is there, which is a really important factor.
We’re also seeing significant growth in wallet loading, particularly around the gaming ecosystem for consumers to pre-load their wallets. It’s simplistic, easily understood, a single provider and often driven by the provider themselves. From their point of view they’re retaining that user engagement in a single environment.
And then ecommerce more broadly. Again, this comes down to user experience. By us working with payment gateways and FIs, they’re already a trusted environment where merchants obtain their existing payment services, which ultimately means that checkout experience is more positive overall.
4. How is the shift towards API and A2A payments changing the fintech landscape more broadly?
I think more choice is empowering a wider range of providers. There are new sets of challenges, as always happens when there’s a change in the payments landscape, so more governance, more regulatory drives. The reality is, and we’re all finding this, that we are learning all the time. The ecosystem will continually strive to catch up with technology.
If I put more of a social slant on it, what’s quite incredible to me is we’re seeing the biggest change in the fintech landscape, arguably ever, with APIs and account-to-account playing a big part in that. What we’re seeing is: this is in parallel with a global pandemic. I wouldn’t be naïve enough to claim a fintech revolution could be put in the same category as the pandemic, but this is the biggest reset button that any of us are likely to see in our lifetime. It will never be something that we can scientifically prove, but I suspect the adoption of A2A (and, generally, the way the fintech landscape has changed in the past 12 to 18 months) would not be as quick were it not for the environment we find ourselves in today.
5. What is Token doing specifically on APIs and payments and how is this being rolled out?
Token works as a technical service provider. In a nutshell, we work through the complexity of the hundreds of thousands of bank API integrations. Then, customers come to us to connect once, benefitting from all the work we’ve done historically and continue to do. That generally means we’re the face behind the scenes.
Our customers create their own propositions and take them to market, using Token as the core infrastructure, so we’re not a consumer brand in any form. We have a considerable channel focus, meaning we provide our technology and services to large financial institutions, PSPs and merchants, who provide their solutions to the merchant.
6. What are the key challenges the industry as a whole is facing right now and what potential impact, if any, might this have on the growth of A2A payments?
As with every industry, there’ll always be challenges in aligning technological capabilities and speed of growth with regulation and oversight. Fintech and payments have probably suffered, and continue to suffer, from that balance. I categorise it into three primary factors that we need to consider. First, the API and ecosystem maturity. By default, we get compared with existing methods or more traditional methods of payment, which is unrealistic, because it’s such a comparatively early stage. Along the same vein is that different geographies mature at different rates, that’s just a natural evolution.
Next, merchant adoption: the expectation of immediately replicating an infrastructure, an ecosystem, at a fraction of the cost in something like the traditional card world that’s been mature for 40-plus years is one of the challenges that we face. I believe the merchant adoption is levelling out in terms of their understanding and expectations that it’s generally a journey you work through with customers.
Finally, consumer behaviour, which can be quite fickle. So the ‘right first time’ mentality is really important. While those three items may control expansion to a certain degree, I don’t think they’ll significantly negatively impact what we’re talking about as an unstoppable growth.
7. What might the industry look like in five years’ time?
I think we’ll see a lot of consolidation. But that’s history repeating itself. It’s perfectly natural in a technology environment to have larger, longer standing organisations maintaining alignment with the ecosystem as it changes.
I also believe we’ll see stability in all the areas we’ve talked about. Twelve to 18 months ahead at the beginning of 2020 looked very different from the 12 to 18 months ahead now.
