Payments 2018: The predictions so far

February is nearly out of the way, meaning we’re well into 2018. It’s already been a major year for payments, with Open Banking and PSD2 reshaping the landscape for good, but opinions on how the following months will pan out has differed among the experts who’ve spoken to PaymentEye.

Some are optimistic about the fortunes of the fintechs – others, less so. Some think crypto is the future, others see it as, at best, passing fancy, at worst, a dangerous game. Here is a collection of the predictions so far, from professionals and thought-leaders from across the entire stretch of the payments industry.

Who do you think is on the money? Who do you think is miles off? Join the discussion by tweeting us @PaymentEye.

 

Open Banking & PSD2

 

“I think that the impact of PSD2, in the short term, will be muted. I don’t think it’s going to be what the European commission think it will be, and I think that the eventual beneficiaries of PSD2 probably won’t be who we thought it would be, either. Regulators deciding how innovation should work is ridiculous, because how do they know? They’re not business guys.”

John Chaplin, advisor to Emerging Payments Awards 2018, former Senior Executive at Visa and First Data. Read full article.

“I think the most immediate thing that needs to occur is the feeling that it’s safe to use Open Banking. Although the term is good, it’s also equally bad, because it sounds like banks are just opening their doors and letting everyone have access to their data.”

Samantha Seaton, CEO, Moneyhub. Read full article.

“I think PSD2 is going to open a huge Pandora’s Box, because a lot of banks are going to have to draw back the curtain and show The Wizard of Oz, so to speak. It’s going to be a situation where banks are going to have to compete on the basis of the quality of their APIs, which means not only the reliability but also the speed, because a lot of the processes that are going to be behind PSD2 are today very manual in some banks.”

Jed Grant, CEO, KYC3 and Peer Mountain. Read full article.

 

 

Banks vs. Fintechs

“Traditionally, banks have assumed that the market will move at their speed. But as online spending habits change, and as the options available to merchants and customers expand, the market is simply beginning to outpace their offering.”

Peter Caparso, President North America, Checkout.com. Read full article.

“The companies that will win are those that bring value to the consumer, and offer a nice user experience. Open Banking makes this easier. I think it puts a lot of pressure on incumbents to offer good services.”

Victor Trokoudes, CEO and co-founder, Plum. Read full article.

“My gut feeling is that there will be a small number of winners, and a lot of them will be the big tech companies swooping in – Google, Facebook and so on. Will we get lots of niche services focused on lots of different things, or will they consolidate among fintechs, or among banks?”

Garrett Cassidy, CEO and co-founder, Trezeo. Read full article.

“The key fintech leaders of the future don’t just need great ideas, but also need top technological talent to execute those ideas. Without that, it would have taken us another 10 years to build what we’ve built, and by then the space would have moved on.”

Ryan Breslow, CEO and co-founder, Bolt. Read full article.

 

 

The Blockchain hype

“Blockchain, in payments, is massively overhyped. A lot of the investors will lose their money. I think Blockchain may have application in certain areas, but I don’t believe that it has an application in retail payments, because it’s too slow and too expensive. It costs $5 to process one Bitcoin transaction. So how about paying for a cup of coffee with a Bitcoin, where it costs $5 just to process the transaction? I don’t believe that retail payments and blockchain sit together.”

John Chaplin.

“The technology that makes up blockchain has incredible potential, but it’s been introduced into a world that is not equipped to realise that potential yet. The way information is recorded, reported and managed today is still the same, unsophisticated way it has been for decades. Blockchain will have a profound impact but because the world is so dysfunctional today it will take time to embed that technology and begin the transformation.”

Marcus Treacher, Global Head of Current Accounts, Ripple. Read full article.

 

 

Cryptocurrencies:

“I welcome anyone to try and short bitcoin and would remind them that it trades 24 hours a day, so they’ll get their faces ripped off and lose all their money … There’s no crash coming. There’ll be volatility and price fluctuation, but the true value of a bitcoin is the cost of securing the ledger at that moment in time.”

 

Sean Clark, tech entrepreneur and founder of Hut 8. Read full article.

“We’re going to enter in some kind of currency war type thing, where cryptocurrencies are going to face off against fiat. I think you already see that happening – the UK banks have said they will not open bank accounts for any company that’s dealing in crypto, and they say this is out of regulatory prudence, but I think it’s also a business protection thing.”

Jed Grant.

 

 

Where the money is:

“Businesses around the world should ensure they are preparing themselves to capitalise on the Chinese audience, even if they don’t have a huge global operation. Analysts estimate that UK retailers stand to make upwards of $337 million from Chinese consumers in the UK, with 55% of China’s online shoppers spending on average £104 a month on British products.”

Myles Dawson, UK country manager, Adyen. Read full article.

“In practice, B2B payments is a better area to invest in than B2C. You’re likely to make more money and it’s a better market […] I think we’ll see more and more the innovation coming in the B2B space, because it’s very hard to make a profit in consumer payments, especially in Europe. You’d be better off investing in B2B in Europe than B2C.”

John Chaplin.

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