Wealth through Investing

Payment Decisions: Reflections of Culture, Options, and Self


The global payments industry is dramatically improving due to technology. Mobile has changed everything. Payments are getting faster and smarter. Payment options are constantly evolving. Competition is intense. And payments are revolutionizing markets in the developing world even faster than in the developed world.

The untapped potential is enormous,” Kosta Peric wrote. “In just the next seven years, the McKinsey Global Institute estimates that widespread adoption and use of mobile money could increase the GDPs of all emerging economies by 6 percent, or a total of US$3.7 trillion.”

But how does this progress in the payments industry affect the payment decisions we make at an individual level?

I spoke with Silvia Mensdorff-Pouilly, general manager Europe of ACI Worldwide, about the evolution of technology and payments. She feels that the industry needs to remember to keep things simple:

“With all of the hype around fintech, we payment geeks are constantly thinking how we can jazz up payments, but when it comes down to it . . . the only thing that matters is that it works. I’m always reminded of this great quote: ‘Boring in payments is not a bug, it’s a feature.’ A boring payment is a payment that works! Payments need to be embedded in the flow of whatever basic tasks that we are doing.”

What determines how we decide to pay today?

As Mensdorff-Pouilly explained:

The decision on how to pay must lie with the consumer. This will be increasingly relevant in a post-PSD2 world of open banking and payments, and a future move to IoT (Internet of Things) payments.

How would you like to pay for that?

Our payment decisions are a reflection of our culture, our available options, and ourselves.


Payment behavior varies by region.The payments experience we have depends on where we are. Crossing a border changes a lot, and changing continents changes nearly everything. A few examples:

Sweden: In the last month, six out of 10 Swedes have used a smartphone app called “Swish” that has largely replaced cash transactions. Swish is a C2C peer-to-peer money transfer app. “Swish was built within a single country with a unified and trusted payment infrastructure (BankID) and a single currency (SEK),” Etienne Brunet observed. It is not available outside of Sweden.

Hong Kong: Despite the global growth of mobile payments, current spending habits can sometimes be hard to change. Hong Kong is a perfect example — although residents have rapidly embraced smartphones, many people there are creatures of habit when it comes to payments. Octopus has long been the dominant player since it launched physical payment cards in 1997. This “stored-value” card can be used in more than 20,000 businesses, including convenience stores and restaurants, and on public transport. Roughly 97% of Hong Kong residents have Octopus cards.

Mobile payments compose a much smaller share. According to a recent Reuters report:

A Hong Kong Productivity Council survey published in July found that the most widely used mobile payment methods were Alipay and WeChat Pay, but they were used by just 22% and 19% of respondents respectively. Lack of familiarity and worries about data leakage were the most common reasons given for not adopting the new mobile payment systems.

China: By contrast, people have been remarkably quick to change their behavior on the mainland. The Financial Times reported on the explosive growth in mobile payments in China:

Almost half the world’s digital payments in 2017 were made in China, through apps such as Alipay (owned by Ant Financial, an affiliate of e-commerce juggernaut Alibaba) and WeChat (owned by Tencent), according to PwC research.

These progressive apps provide social, e-commerce, and payment functions together in one place so people can manage their financial and social lives at the same time. Ray Chan, vice-president of Ant Financial, said that the rapid embrace of new habits, spending and otherwise, among millennials has fueled his company’s success, telling the Financial Times:

“When we consider new products, we create them for this era, one in which young people have become the main driving force of our society.”

Africa: Mobile reigns in the world of African payments. As Kosta Peric noted:

“The eight countries of the West African Economic Monetary Union (WAEMU) are building an interoperable system that will connect 110 million people to more than 125 banks, dozens of e-money issuers, and more than 600 microfinance institutions.”

Martha Mghendi-Fisher is the founder of both African Women in FinTech & Payments (AWFP) and European Women in Payments Network (EWPN). I asked her if mobile money interoperability is the way of the future:

“From an African perspective, mobile continues to be the main method for payments. I think WAEMU is definitely on the right track trying to bridge gaps and building an interoperable system but in reality they have a long, long way to go. I come from Kenya and I was there when everything started. M-Pesa was born in 2007 and this really changed the way that people think about mobile money. It became so huge in East Africa. Just about everyone can now have access to financial services.

“The fact is that different countries have different regulations and different ways of operating. From a money culture point of view, the way people think about money in Kenya is not the same as the way people think about money in Nigeria. This issue goes to the products that are developed as well as the way the products are supported.

“Interoperability matters for the future but for today mobile matters the most. There are a lot of mobile money operators in Africa — mainly telcos — but M-Pesa continues to be the largest. A business person can now do whatever they need to do on their mobile and you don’t need to have a smartphone since the technology is based on the SMS messaging system. The more that people have access to financial services the better their lives will be. Ease of access to credit has been a very serious problem — all you have to do is send a text and you get money! I am personally advocating for financial education — this will help the economy and it will help alleviate poverty.”

The makeup of the payment industry varies by environment.

The payments experience we have can be influenced indirectly by a particular society’s embedded attitudes, habits, and persuasions.

Stanley Skoglund, a London-based payments consultant, described his experience:

“I grew up in Sweden, a Scandinavian society where tolerance is more prevalent than intolerance. But in my adopted country, the United Kingdom, I was the only senior vice president at Visa International’s London office for many years, who was openly gay in our industry and being gay, of course, implies ‘difference.’ I sensed, as did others, that there was a high level of discomfort around the idea of being different in the UK business community, particularly in banking and financial services. There are so many symbols that persist . . . symbols that defined traditional masculinity — flashy cars and big offices. This is a big part of the issue. The culture keeps the power stacked against diversity. If we could somehow change the corporate culture, men would allow themselves to act differently as well.

“I realize how lucky I have been given my comparatively liberal upbringing, but I am aware that others have unfortunately been much less lucky. Suppressing who you are is just plain dumb. If you have to stage manage yourself this isn’t good for you, it isn’t good for the company, and it isn’t good for business. I will continue to put my energy into helping my industry achieve the goal of equal opportunity and equal reward — no matter what.

“Diversity and inclusion matter in the payments industry and in all industries because they affect the bottom line. Academic research has more than suggested that diverse companies tend to perform better. A recent Ernst & Young report, “Diversity — Is It Good for Business?” explains this well. Hiring diverse pools of talent is also important in terms of competition in the marketplace.”


Technology and demographics are also shifting the world of payments. New fintech start-ups are putting pressure on incumbent platforms, and fees are dropping across the globe. In Canada, for example, international money transfers used to be complicated, unreliable, and at nearly $50, expensive. But my bank now lets me move money to Europe for under $15 using online tools. And it is faster too.

That is happy news for me booking a vacation in Canada. But there are literally hundreds of millions of poorer people around the world for whom the difference between $50 and $15 is massive: guest workers sending money home to support their families or farmers receiving payments for their crops, for example. Changes in the payments industry mean they get to keep more of the money they earned.

There are some interesting demographic trends as well. Duncan Stewart, CFA, the director of research for technology at Deloitte Canada, notes that choice of payment method varies by transaction size and value among millennials aged 18 to 36.

“These young people are daily users of mobile payments for small transactions like coffee or restaurant bills: For them, the phone is the new wallet. But when they research, plan, and book bigger ticket items, such as an international vacation, they usually shift their payment technology from their phones to their laptops. When moving thousands of dollars, they prefer the larger screen and more precise keyboard of the PC for goods such as airplane tickets, hotels, or jewelry. And when it comes to even more expensive items like cars or apartments, they still go to bank branches to make the payment. Interestingly, although use of mobile payments varied considerably by country in both North America and Europe, this shift from mobile to PC was seen in all countries.”


Payment behavior varies by personality. People are all so different. And accordingly, different user personalities demand diversity in the payments industry. Skoglund explains:

“There is a social element to payments (e.g. peer-to-peer transactions) and we need diverse input to design relevant solutions and we need relevant perspectives on innovation. Millennials today don’t have the same archaic notions that seem to persist with older generations — they expect diversity and merit-based hiring selection. The landscape is changing quickly in the payments and FinTech space. The payments industry was included in this Forbes article last year ‘Millennials are pushing for diversity in these 3 industries.’

“There is a lot of innovation and to figure out the trends we need to clearly understand what users actually want.”

What do users want?

Our payment decisions today depend on the choices available to us in payment options, devices, and associated fees. These factors vary radically by geographic region and by culture. All else being equal, how we decide to pay is a reflection of self — many of us are free to express our personal payment preferences.

My payment behavior could be based on any number of things including my mood at the time of the transaction, my desire to appear to be fashionable or in sync with my peers, or my values around paying fees. The world is made up of diverse user personalities with diverse preferences.

How would you like to pay for that?

So after reading this, the next time someone asks you this seemingly simple question, you may well become paralyzed with indecision. Go ahead, mull it over. But regardless of your culture, your options, or your personality, don’t forget to pay!

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer

Image credit: © Getty Images/ FrankRamspott

Barbara Stewart, CFA

Barbara Stewart, CFA, is a researcher and author on the issue of women and finance. She released the ninth installment of her “Rich Thinking” series of monographs on International Women’s Day, 8 March 2019. Stewart uses her proprietary research skills to work as an Executive Interviewer on a project basis for global financial institutions seeking to gain a deeper understanding of their key stakeholders, both women and men. She is a frequent interview guest on TV, radio, and print, and she is a columnist for Golden Girl Finance. Stewart is on the Advisory Board for Kensington Capital Partners Limited in Toronto. All of Stewart’s research is available on Barbara Stewart.


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