The MPE SUMMER WEEK was an excellent endeavor to create a new space for networking and knowledge sharing for payments professionals in “the new normal” context. The virtual event enabled hundreds of people to learn from over 40 industry influencers and experts in over 30 live and on-demand sessions, to discuss, and network. The general vibe was that the payments industry’s dynamics are more exciting than ever, influenced by new factors that might permanently induce new customer behavior and expectations, new business strategies, and new rules and regulations.
The topics approached were very diverse, ranging from merchant payments, risk and security, to payment schemes, PSD2 & SCA, and more. Many presentations explored the facets of the future of payments for merchants. The general view is that although we are already on the path to digitization, the COVID-19 pandemic has accelerated this change. In a few months, some aspects related to consumer behavior have witnessed changes that would normally have taken years to happen.
Covid-19 accelerates the process of going cashless through touchless solutions for the connected customer. In the new normal that is already here, we will see more and more devices becoming acceptance tools. The question on how to orchestrate the entire experience irrespective of the channel remains to be answered. An interesting point of view was expressed by Chris Skinner, who believes that there are no channels anymore, thanks to the seamless omnichannel experiences; physical and digital convergence is already here.
During the next five years, technology will drive significant changes within payments. These shifts are just the beginning, as we are on the threshold of even more rapid technological growth, integration, and interoperability. The next generation of payments includes the use of the internet of things (IoT), the reliance on and integration with software, frictionless payments, machine learning and artificial intelligence, omnichannel, unified commerce, and payments becoming invisible via automated checkouts. Payments will be pushed into the background, but there will always be a need to surface consent. Therefore, authenticating users remains the greatest challenge.
For the global omnichannel consumer, both physical and digital presence are important. Convenience is key, but so are payments, and returns are the new normal. According to the findings from a report by Worldpay, free shipping is seen as one of the most important benefits that would incentive a consumer to give up personal data that merchants can leverage to build new value-adding services.
When it comes to initiatives in reaching payments sovereignty in Europe, EPI, the former PEPSI was also brought into the discussion. This response to global political tensions (among others) will be a shared European card scheme first, will coexist with SCT Inst, and will eventually migrate from the card rails towards SCT Inst rails, covering all use cases running on SCT Inst rails – B2B payments, P2P payments, etc. Everything will work on an existing infrastructure with the aim to bring down the barriers of cross border payments in Europe. For a new and successful European payment scheme, the biggest challenge is to reach enough critical mass on both the payer and the payee side, consumers and merchants, which will create the necessary network effect that is required to reach the scale it takes to compete with non-European giants. In the end, the new scheme should ensure a huge consumer and acceptance space, ubiquity, and interoperability.
The Open Banking opportunity
Within the discussions and presentations, open banking emerged as the new enabler in the payments space, allowing more efficient payments flows. For now, there are few use cases, due to many new shifts in technology, compliance, and infrastructure. Open banking is competing with incumbent bank transfer methods in each region and finds relevance in markets where there are no incumbent bank transfer and no alternative rails. As soon as user adoption will increase, open banking will become a new channel to help enable the transfer of funds in a seamless manner. When it comes to connected devices and the internet of things, the general view is that we just need to fill in some gaps in technology, regulation, and compliance to reach true potential. In this context, open banking drives collaboration, as it takes us to RTP, automation, and new value-adding products and services that challenge the status quo, placing the consumer in pole position.
For PIS and AIS, fintech companies interested in building new products and services will need a platform capable of connecting and maintaining the connections to the bank interfaces in any market, regardless of their technical specifications for integration. We are the right partner for any type of integration with European banks and for the expansion of new PSD2 products in any European market. If you want to hear more about accessing any European bank you like, contact us at hello@ibanXS.eu.