Moneycorp: End of Year Payments Industry Recap – What’s Next?

The fintech and payments industries have enjoyed unprecedented heights of innovation this year, while maintaining their resilience and rapport amid the economic changes experienced in recent quarters. Many remain hopeful that these trends and success stories will be implemented as the industry prepares to enter a new year and a new phase of growth.

Here in our last guest post for 2022, The cow The idle chatter of Moneycorp offers its predictions for the development of the payments industry in 2023.

Vanpraet is EMEA head of Moneycorp, a payments fintech that operates with agility and dynamism backed by a strong foundation of four decades of experience in the payments market.

Moneycorp focuses on creating a balance between shaping the future of the payments industry and building meaningful relationships. It is committed to improving the payment process by reducing friction while providing customers with competitive products.

As CEO of EMEA, Vanpraet is responsible for running the respective UK and European operations, including the roll-out of existing and new Moneycorp products and services, and expanding Moneycorp to offer peripheral services in the payments and banking space.

With over 30 years of experience in technology markets, Vanpraet has contributed to driving value for global technology brands, e.g. Xerox, Hewlett Packard and Easynet/Heaven.

Having joined the fintech industry almost 12 years ago, Vanpraet has built a proven reputation through senior roles within companies such as Global Collect/Ingenico and Credorax/Finaro.

Here, Vanpraet describes the growth of the latest payment methods and how they will cultivate completely new benefits for the consumer, as well as a look into the changing regulatory landscape surrounding them:

Year-End Payments Industry Summary: What’s Next?

As the world emerged from the clutches of the pandemic, many industries saw irreversible changes in how customer demands had to be met. As one of these groups, fintechs experienced a number of sweeping changes throughout 2022.

Of them all, the most far-reaching trend to follow this year has been the rise of blockchain technology. As the underlying technology for digital assets, industry players have been keen to use it to decentralize financial services and apply it to cross-border transfers.

Despite the challenging year for digital assets, almost looks 2 trillion dollars wiped out the crypto economy and incoming regulations, blockchain technology will only continue to grow as we develop further uses for it within the fintech space and beyond.

Embedded finance is another important topic in 2022 that gained popularity due to the accelerating changes that would otherwise have taken years to implement. However, this rapid increase in digital payments and online banking had led to the emergence of a critical security challenge – the verification of identities and the ability to combat money laundering.

To address this issue, automated know-your-consumer (KYC) solutions were developed that enable the convergence of billions of data points to make way for stricter and more secure compliance processes and ultimately remove many layers of complexity to provide a more user- friendly and customer-centric value.

This progress towards digital experiences for the financial industry has led to growth and optimistic outlook for partnerships between fintechs and traditional financial institutions, providing greater convenience and flexibility for end users. With the number of trends and movements in the space, it would not be a stretch to say that we are witnessing nothing short of a payments revolution.

However, 2022 was only the beginning of the economic transformation. With the many trials and developments of these technologies laying the foundation for the industry, 2023 will be the true test of modern fintech, as many of the upcoming trends are the result of events of the previous year.

Among the major events of 2022 are the early signs of a global recession that will undoubtedly have an impact on this industry and beyond, including in the form of increased regulations, but if properly navigated and set up, combined with opportunities in B2B international payments and blockchain can allow fintechs to thrive.

Regulators and fintech

2022 was an explosive year of growth and innovation for fintechs, and as a result, regulatory bodies are paying more attention to fintech companies and payment providers. The rise of non-banks offering financial services has reached a tipping point, and regulatory bodies have increased scrutiny of these companies.

Into 2023, regulators will require more oversight of non-banks that offer financial services to consumers, to ensure that their data is properly protected under compliance and consumer protection laws.

On the other hand, regulators must find a way to support innovative financial services that provide an alternative solution to underserved customers, while still leveling some restrictions on these companies.

In the US, the Officer of the Comptroller of the Currency (OCC) has already begun to do so, stating a dedication to working closely with fintechs to develop regulations, although the effectiveness of this has yet to be seen.

Accelerated convenience in B2B international payments

Driven by the improved experience and ease of use in B2C payments, B2B cross-border transfers in 2022 have seen a massive push to match the ease of use of consumer services. On top of that, there has been a general growth in demand for cross-border payments due to consumers seeking faster and more competitive prices as well as an increase in the importance of globalization.

To meet these rapidly changing demands in 2023, digital payment providers must implement more diversity in payment solutions through investment in APIs, with the goal of increasing efficiency in B2B international payments.

Doing so will help payments companies prepare for the global macroeconomic swings and volatility coming in 2023. Through more efficient international payments, B2B payment providers can deliver much-needed support and value to companies as their investment strategies change and supply chains are reconfigured.

The Blockchain Future

Blockchain technology will be the future of the fintech industry despite the challenges that digital assets faced this year.

Through 2022, we saw the infancy and growth of this innovative technology, showing many industry players the value and potential it has for fintech companies through decentralized finance and smart contracts.

As we move into 2023, we will begin to see blockchain technology take off and companies begin to push the boundaries of what was possible through its use. Smart contracts have a strong potential to create the convenience in B2B international payments that businesses want, and companies will look for new ways to popularize and optimize it for their cross-border transfer systems.

Whether for payments, KYC, transfers or other purposes, blockchain technology will find its way across the industry and become the basis for many upcoming innovations in 2023.

Economic Elephant: Recession and Inflation

One of the biggest developments leading into 2023 will be the discussions about recession and inflation. Perhaps more than other industries, fintech and payments are inextricably linked to the economic conditions of the world, and as such we need to keep an eye on central bank moves and concerns about a global recession.

Unfortunately, this means that investors will take a more cautious approach and become more selective with the companies they choose to invest in. This is already happening and will continue to do so in the next year, reducing the number of players in the payments space and causing a consolidation of the industry.

On the other hand, the overall outlook for payments remains positive, but will favor cash-rich and financially stable companies much more than before.

A challenging, yet hopeful 2023

Fintech companies are a strong group and despite a major looming threat, many will continue to innovate on the new technologies that began to flourish in 2022. For these companies to flourish, it will be key to have a good understanding of volatility to make the best of 2023 when we possibly enter a global recession.

Some may even want to enter emerging markets in Latin America and the Middle East and Africa, making a name for themselves there before other players flood the markets.

While the overall outlook for 2023 seems like a challenging year for payments and fintech, those who can take advantage of these ongoing trends and come out the other side will have cemented their positions in the market.