Fintech focus: EU CEO of BlueSnap talks about trends for 2023
Nikhita Hyett is EU Director of BlueSnap, a global payment technology company BlueSnap, the all-in-one payment platform designed to increase sales and reduce costs for B2B and B2C companies. She has extensive experience and expertise in retail and the payments industry from previous positions at both payment provider Adyen and retail technology company Global Blue, where she worked directly with strategic partnerships and customers. We caught up with her to find out more.
What new trends will we see emerging in the next 12 months?
There are two trends we will be watching closely in 2023, namely embedded payments and strong customer authentication.
The first is embedded payments – which will eat away at B2B software platforms as they try to diversify revenue streams and improve customer retention. With a low market penetration of 15% in B2C transactions and 3% in B2B, we predict exponential growth in the embedded payments sector opening the real opportunity for embedded finance.
With today’s push and pull between improving conversion rates and reducing fraud, strong customer authentication (SCA) will grow beyond Europe and into North America. As 3-D Secure has proven popular with merchants in Europe, as it has helped reduce interchange fees and shift fraud liability to the acquiring bank, we can expect it to spread further across the pond. We’ve seen this happen with embedded smart chips and PIN authentication in the past and expect history to repeat itself. But for it to flourish in 2023, enablers like EMVCo need to show that false declines aren’t rising in parallel.
Where do you see the development of embedded finance by 2030?
In 10 years, we will see embedded finance at the forefront of fintech services. Embedded payments – which enable businesses to process their own payments – will drive this widespread use, as they represent the largest slice of the embedded finance pie. In an increasingly competitive software market, SaaS providers want to capture new revenue streams, and help their merchants do the same by monetizing their payments. As more businesses adopt embedded payment solutions and consumers become accustomed to the seamless payment experience, demand will become increasingly intertwined with this combination of superior convenience, personalization and cost.
What will the future of BNPL look like?
With regulation around crime protection on the horizon, financial institutions that specialize in BNPL compliance will reach more consumers. To date, the easy availability and low interest rates of this short-term loan option have led to young buyers finding themselves in more debt – and cultivating a negative reputation for the sector. The recent change to the Consumer Credit Directive, which aims to improve judgment around online debt repayment and fairer credit advertising, shows that this reputation cannot be dismissed as a bad apple, but rather an indication of a widespread problem.
As such, BNPL compliance has the opportunity to rebrand the industry from a debt trap to a useful tool in tough economic times. By shifting focus from traction to protection through fairer and more digestible consumer contracts and stronger credit checks, financial institutions can begin to rebuild consumer trust and confidence. Ahead of 2030, we will also see both traditional banks and fintechs looking to invest or acquire in this area to ensure they have a competitive edge when it comes to compliance.
As for BNPL for business to business, we will not see a dominant player in the next three to five years. As B2B payments are processed through local financial institutions, which lack the technological infrastructure to process international transactions, there are still inroads to be made in B2B payment innovation. Paytechs, which provide the technology to allow businesses to pay through global payment networks, will push the trend with B2B use cases – but only through more significant deployment of payment technology can we see this trend become widely adopted.
