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  • khazzaka


I am republishing my paper called Rise of Smart Payments, that won the CSC Papers Award in 2014 in Atlanta and was published by CSC (that became later DXC.Technology)

The paper was written and submitted in June 2013 based on data from 2012 in the payments industry worldwide. it gave some projections based on probable scenarios spanning between 2012 and 2022.


“Do not be afraid of confrontation ... Even the planets collide and from chaos the stars are born.” — Charlie Chaplin

“The battle for the future of mobile money really took off – and, because the opportunity lies at the meeting point of mobile phones with banking, payments, retailing, media and analytics – the stakes are high.” — Visa Europe Annual Report 2012, Business review, CEO’s foreword

The payments sector was considered structured, stable and steady, but in the last couple of years it suddenly attracted investment and flourished with innovations. We are witnessing a new Gold Rush era in payments. It’s estimated that between 2010 through to mid-2011, more than 700 companies brought about USD $3.4 billion in funding for innovations related to the payments sector [27]. The annual research & development funds of Samsung are USD $8.2 Billion, Google USD $4.8 billion, Apple USD $2.5 billion. [62] Meanwhile, financial institutions are keeping pace with new entrants. They are actually spending more on IT than any other industry. [78] 7.3% of the revenues goes into information systems against 3.7% in other industries. But is this money well invested to be on the front row of future banking? That’s a question we’ll be addressing in this paper.

A true economical war is upon us. Fierce battles of innovation are already taking place and shaping the future of payments. The advent of Internet allowed for the creation of virtual markets and the rise of electronic commerce. The deployment of mobile phones and smartphones, which combine the power of Internet and telecommunication means, are introducing fascinating new ways of making transactions.

The technological innovations are bypassing the systematic structuring measures taken around card schemes. Europay Mastercard Visa (EMV) with smartcard chip-and-pin security measures, in addition to the panel of 3D Secure norm and Payment Card Industry (PCI) standards such as PCI DSS, haven’t been globally deployed and have already become insufficient to cover the needs of keeping pace with the new payments innovations.

This Paper will assess mobile payments (m-payments), contactless payments, smartphones payments with diverse technologies, biometric security, the advent of virtual currencies such as Bitcoins, new transformation of smartphones into card acceptance terminals, etc. In addition to all those innovations, the competition between Payment Service Providers and Banks is starting to create a motion towards innovative inter-banking schemes that would allow for better reachability, improved porting, and stronger control of fraud rates.

This paper takes also on the challenge of mapping the global payments innovations and attempts to help forecast the future of payments, or at least bring an educated guess to the Rise of Smart Payments.

Keywords: Payments, smart payments, ewallet, virtual currency, biometric, fraud, contactless, BLE, BYOAD, mobile banking

CSC PAPERS © 2014 Computer Sciences Corporation. All rights reserved.
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