As much as 75 per cent of financial institutions (FIs) are struggling to utilise new payment offerings and stronger cybersecurity due to continuing reliance on legacy core systems; Endava, a technology services company, has revealed.

Endava delves into FI strategies for meeting customer demand in its new Retail Banking Report, finding that 75 per cent of organisations believe they offer a good user experience, have strong data management practices and better technology than competitors.

However, even though over half of the FIs have moved their core systems to the cloud, the responses reveal problems implementing, scaling, or managing them. The top barriers to implementing a cloud-based core are competing technical priorities (40 per cent), a lack of technical resources to manage it (37 per cent), a fear of a long implementation (32 per cent), and fraud/security concerns (29 per cent).

Fred Fuller, global head of banking at Endava, commented: “FIs have come a long way in embracing the fact that modern banking and a cloud-based core go hand-in-hand. Banks also recognise that migrating a legacy monolithic core to the cloud is not modernisation.

“They need to leverage modern digital technology to truly modernise the core to create a flexible and dynamic infrastructure that can quickly respond to customer and market demands. Although FIs think their technology is stronger than their competitors, the reality is that new features and functionality are usually built on older systems, which massively limits their scope for innovation.

“Working with technology partners who can implement and manage a new core will help them embrace customer-centric banking. This means being able to quickly roll out new products and services, as well as streamlining and securing their internal processes – all of which will help them hold onto market share.”

Upgrading existing tech remains high priority

FIs continue to face rising interest rates and inflation, and the report also taps into economic drivers such as creating a more profitable and loyal customer base. FIs ranked high-priority ambitions for the next year as increasing efficiency (85 per cent) and retaining customers (83 per cent), as well as improving the digital customer experience (85 per cent), maintaining system stability (83 per cent), and strengthening security/reducing fraud (83 per cent). To meet these goals, many firms are now looking to new technologies to improve internal processes and customer-facing products.

While most are in the early stages of adoption, half of FIs understandably view AI as a top area for investment, closely followed by data analytics (45 per cent) – both of which can offer powerful real-time fraud detection, virtual assistants, security, and investment management.

When it comes to their existing tech, upgrading open banking (81 per cent) and payment gateways (81 per cent) are high or very high priorities. These focus areas will help them tackle ongoing challenges by becoming more customer-driven and tapping into additional revenue.

International banking group Crédit Agricole has partnered with Worldline, the payment and transactional services company, to launch a new joint venture CAWL; a payment services brand for merchants in France.

CAWL will offer all-in-one payment solutions combining acceptance and acquisition and integrating value-added services specific to each business sector: industry-vertical offerings to simplify merchants’ lives and enable them to focus on developing their businesses.

CAWL’s solutions will enable merchants to focus on their growth, effectively manage their commercial performance, optimise their sales, and mitigate fraud risks, thus fostering the development of their business activities.

Meriem Echcherfi, CEO of CAWL, explained: “CAWL has the ambition to be a major player in payments for all merchants in France, with an offering that combines service, proximity, and high technology, leveraging the strengths of Crédit Agricole and Worldline. We also aim to be a leader in innovation by creating integrated offerings that significantly increase the added value for merchants and, by extension, for their own customers.”

CAWL combines Worldline’s technological expertise, offerings and services with Crédit Agricole Group’s commercial performance and distribution power.

The payment services provider aims to provide complete and innovative offerings for all merchants, regardless of size, industry, and sales channels. For larger merchants, CAWL will offer omnichannel solutions with dedicated commercial teams and expertise for each industry.

Starting in 2025, CAWL will roll out all-in-one offerings by industry verticals. Crédit Agricole Group banks plan to widely distribute these offerings, through dedicated teams, as well as via an entirely digital channel.

By leveraging the capabilities and technologies of Worldline, alongside Crédit Agricole Group’s knowledge of the French market, CAWL will launch a platform with new features enabling merchants to offer their customers a seamless and omnichannel shopping experience and optimise their conversion rates and commercial activities.

All new offerings will enable merchants to access multi-currency, multi-country, multi-payment network services, and alternative payment methods, supported by a pan-European acquisition platform and personaliszed services.

Guests at restaurants, cafés, bars, lounges, hotels, and cinemas can now pay directly from their mobiles following a new partnership between EasyTip, a cashless tipping platform, and Opaala, a UAE cloud-based platform.

Payment delays and lack of transparency on who receives customer tips are causing recruitment and churn issues in critically important industries such as hospitality and beauty services. In fact, it’s estimated that the collection and distribution of tips in the UAE amounts to over AED 5billion each year and costs businesses at least AED 200million of additional operating expenses.

To address these concerns, EasyTip and Opaala have joined forces to expand fair tipping practices across the UAE by integrating EasyTip’s tips collection and distribution systems into Opaala’s digital menu and pay-at-table platform.

Opaala’s existing and future customers are now able to collect and distribute tips directly to each employee via EasyTip’s distribution platform. Tips collected and distributed via EasyTip enable hospitality businesses to unlock substantial operational cost savings, boost the level of collected tips and empower employees with unparalleled transparency on tips distribution and payouts.

Understanding consumer feedback

Integration between Opaala and EasyTip will also provide clients with a unique set of data analytics on the performance of their teams, customer feedback and spending. Tip recipients, in turn, will be able to track all tips and payouts via the EasyTip app and benefit from faster settlement times. The Easytip and Opaala partnership is already live and enabled at locations in Dubai including venues such as Nightjar.

Overall, the integration will be available to over 1500 hospitality clients that use both platforms and empower over 20,000 hospitality workers in the UAE to receive tips faster and more transparently.

“The EasyTip and Opaala partnership developed out of a profound desire of both companies to transform the way tips are collected and distributed in the UAE. Combining innovations of Opaala’s best-in-class digital menu and ordering system with EasyTip’s tip collection and distribution platform is a powerful proposition to clients looking to boost their teams income, reduce costs and bring fair and transparent tipping practices to their businesses,” said Evgeniy Chuikov, co-founder and CEO of EasyTip.

“This collaboration is the first of its kind in the UAE and is truly a win-win for platforms, merchants and customers.”

“Collecting tips is of fundamental importance to hospitality venues but the industry’s greatest challenge has always been on distributing them fairly, quickly and transparently to relevant team members. Opaala and EasyTip integration does exactly that and we are pleased to see Opaala clients adopting this important integration and enhancing tips in their venues,” said Marwan Saab, co-founder and CEO of Opaala.

“Cash is king” and “if it ain’t broke don’t fix it” are common phrases heard in the payments industry. However, digital payments have had an undeniable impact in the sector, and according to new research from Boku, the global network for localised payment solutions, there has been a continued decline in the market share of traditional card payments.

Produced in collaboration with Juniper Research, the Boku report, titled 2024 Global Ecommerce Report: The Changing World of Payments surveyed 10,500 consumers. It analysed data from 37 major markets across the globe to identify global, regional and country specific trends. The findings highlight significant and rapid consumer shifts in e-commerce payments away from the traditional card networks (and in emerging economies cash on delivery) towards local payment methods such as digital wallets.

Nick Maynard, VP of fintech market research, at Juniper Research said: “Our research for this report from Boku highlights that against a backdrop of continued strong growth in e-commerce, the global card schemes (credit, debit and card-linked wallets) continue to lose share to regional and local payment methods. This is a trend seen at an aggregate global level but also repeated in every region across the world.”

Emergence of A2A payments

Further findings revealed that account-to-account (A2A) payments (instant payments and bank transfers) such as PIX in Brazil, UPI in India, or iDEAL in the Netherlands are revealed as the fastest-growing payment method within e-commerce. A2A payments are forecast to more than double and become the fastest growing local payment method within e-commerce. This accounts for 18 per cent of all e-commerce transactions by volume by 2028 globally (up from eight per cent in 2023).

Furthermore, instant A2A and non-card-linked wallets will account for over 50 per cent of e-commerce transaction value globally by 2028.

Declining card transactions and growing local payment methods.

The report also found that card values will decline to 19 per cent of transaction value by 2028 (down from 31 per cent in 2023). By volume, card payments will account for just 30 per cent of e-commerce transactions in 2028 ( down from 41 per cent in 2023).

By 2028, local payment methods will account for 58% of ecommerce transaction values (up from 47 per cent in 2023), accounting for a majority of transaction value online for the first time. Boku also estimated that in four years 37 per cent of all individuals globally will actively use local payment methods.

Younger generations are paving the way

Payment choice is key for consumers around the world. Today’s mobile-first generations – with whom access to and affinity with card networks is low – prioritise the convenience and seamless nature of paying with digital wallets, direct carrier billing and Instant A2A payments. As with the adoption of many new technologies, the adoption of localised payment solutions by younger generations and populations is paving the way for adoption by older consumers.

Stuart Neal, CEO of Boku said, “Our research shows the way the world transacts online is changing fast, and that change is being driven in the main by a consumer preference for convenient, seamless payment methods like digital wallets, direct carrier billing and Account to Account transfers.

“Merchants now realise that the key to their future global growth and success lies in their ability to offer consumers more payment choice. At Boku, we’re excited to provide the world’s largest merchants with access to our global network of localised payment solutions so their customers can more easily pay for the things they love, the way they want – no matter where they are in the world.”

Regional takeaways include:

Africa & Middle East

Africa & Middle East is in many ways already a local payments and mobile money success story, with the region’s services such as M-PESA and MoMo seeing strong adoption. As such, merchants require highly localised payments strategies in these markets to ensure continued results.

Asia Pacific

Asia Pacific payment requirements are changing quickly. While card payments will continue to account for a significant amount of payments – around a third of e-commerce payments by volume by 2028 – local payment methods are fast gaining traction, winning market share from card payments.

Europe

Europe, in particular, will see a dramatic shift away from cards, with the proportion of e-commerce transaction volume featuring cards dropping from 53 per cent in 2023 to just 30 per cent in 2028. A2A payments will experience massive growth from 16 per cent volume of transactions in 2023 to 25 per cent in 2028, due to the ability it provides in moving money without additional intermediaries.

Far East and China

Far East and China is a mobile wallet-dominated market, with great emphasis on ‘super apps’ such as WeChat and Alipay. E-commerce payment methods are anticipated to stay somewhat consistent with this over the forecast period with little shift in the payment methods used, due to how well-established the market already is.

LatAm

LatAm is a market in motion – e-commerce payment methods are changing rapidly, which means merchants must alter their acceptance strategies, or they will fail to take advantage of e-commerce growth. PIX is the obvious early success story, but CoDi in Mexico, as well as PSE in Colombia are also winners.

North America

North America is a heavily-developed market in regards to e-commerce, with the majority of consumers having access to bank accounts and plastic cards. One of the greatest concerns for e-commerce consumers across North America is the ability to checkout seamlessly, as well as having the ability to pay in installments resulting in growth of lower friction payment methods such as; Buy Now Pay Later (BNPL), A2A payments and non-card-linked wallets.

The Indian Subcontinent

The Indian Subcontinent is seeing an increasing shift towards local payment methods, with A2A payments in particular gathering momentum. Local payment methods are anticipated to have a sizable share of payment methods by 2028, equating to 72 per cent of e-commerce transactions by value, an increase from 58 per cent in 2023.

India is the largest driver of both volume and value within the Indian Subcontinent, therefore it is unsurprising that the highly successful UPI scheme is driving local payments forward, providing a template for future growth.

As of April 2023, there were 1,000 active fintechs in Latin America (LatAm) with a vast majority focusing on financial inclusion, tackling the issue of 70 per cent of the population not having access to formal financial services. Em conversa looks to uncover what the future of fintech could look like in the region, following a $2.1billion valuation in 2022.

Here, Ray Merceron, general manager of sales, LAC region at i2c, the global payment processor, breaks down how Latin America’s payment market is evolving, its challenges, as well as i2c’s plans in the region.

Can you provide a deeper insight into i2c and the significance of your position within the company?

i2c’s mission is to responsibly help our clients remove barriers to innovation. We help financial institutions and fintechs of all sizes build a competitive edge in today’s fast-paced world— without compromising on quality or functionality.

Our unified banking and payments platform provides a solid foundation for delivering differentiated offerings that cater to each customer with the flexibility and agility to quickly respond to the unexpected.

As for my role, I spearhead the expansion of our customer base across North America and Latin America. Having been with i2c for seven months as the lead in sales, my background includes two decades at Mastercard, which equips me with a deep understanding of the payments industry. My goal is to leverage this experience to drive growth and foster solid client relationships in our target markets.

Latin America’s payment technology landscape is evolving rapidly. What trends are most impactful in the region?

The paytech scene in Latin America is indeed burgeoning with innovation and growth. We are witnessing a significant surge in contactless and digital payment adoption. Financial institutions on both the issuing and acquiring sides are heavily investing to scale up digital payments. They are rolling out contactless cards and enhancing terminal infrastructure across key Latin American markets.

This shift is propelling an increase in low-value payment transactions, effectively displacing cash from the equation. Another key trend is the rise of P2P payments. Alternative payment methods and e-wallets are revolutionising how people transact, providing near real-time fund transfers. Brazil’s PIX system is a testament to this trend, symbolising the region’s embrace of modern payment solutions.

i2c is known for its proactive role in advancing the payments sector. Could you elaborate on the specific actions i2c is taking to enhance the payments landscape in Latin America?

i2c is deeply committed to revolutionising the payment sector in Latin America through a three-pronged approach:

1. Elevating Customer Experience: We’re enabling our clients to launch highly differentiated products swiftly and efficiently. Our platform’s inherent flexibility allows for quick configuration updates, bypassing the need for extensive technical deployments. This agility ensures that our clients can offer digital and mobile experiences that rival the best globally.
2. Boosting Profits and Mitigating Risks: Innovation is at the forefront of our strategy. We aim to keep our clients at the cutting edge, facilitating quicker routes to revenue and nurturing deeper customer relationships. Our suite includes automated credit decisioning, virtual cards, personalised rewards, real-time coupons, and a comprehensive set of risk management tools, all enhanced by AI technology.
3. Agility and Speed to Market: Our modular platform architecture is a game-changer. It requires no coding and is built from over 100,000 pre-coded building blocks. This allows our clients to quickly configure and optimise their offerings for rapid market entry using our global SaaS platform.

How does the LatAm payments sector compare to that of the rest of the world?

Latin America’s payment sector is swiftly evolving, catching up with global standards through rapid innovation and a proactive approach to digitalisation. Overcoming traditional barriers, such as high unbanked rates and cash reliance, the region has become a hub for fintech growth, often outpacing more developed markets in adopting technologies like mobile wallets and real-time payments. Brazil’s PIX and other initiatives reflect a decisive shift toward immediate payment systems.

Moreover, the region’s approach to digital transformation in payments is often more open and collaborative. Regulatory frameworks, like Mexico’s Fintech Law, are also fostering a supportive environment for innovation, with a clear focus on inclusion and accessibility.

In terms of infrastructure, while there’s still ground to cover compared to some advanced economies where digital payments are nearly ubiquitous, the gap is closing swiftly. We are witnessing significant investments in contactless technology and payment security, propelled by the pandemic’s push for low-touch transactions.

What sets Latin America apart is not just the speed of adoption but the innovation in its approach. There’s a vibrant interplay between fintech startups, traditional banks, and tech giants, all converging to create a unique ecosystem that is tailored to the local needs and culture. As a result, payment solutions are not just imported but crafted within the region, ensuring they are well-suited to LatAm’s diverse markets.

Every market has its peculiarities. What unique challenges does Latin America present in the payments space?

Latin America’s payment sector faces distinct challenges that stem from its unique economic and social fabric. A significant portion of the population remains unbanked or underbanked, which poses a hurdle to financial inclusion and the broader adoption of digital payment methods.

Moreover, as financial institutions, fintechs, and governments work to develop alternative payment methods and e-wallets, interoperability becomes crucial. It’s not just about introducing new technologies but ensuring they work harmoniously to scale the industry and accelerate digital payment adoption across the region.

Looking ahead, what are i2c’s strategic plans for growth and development in the Latin American market

i2c’s roadmap for Latin America is marked by strategic investments in human resources and focused market engagement. We are intent on bolstering our presence by concentrating on pivotal markets and segments where our products and services can have the maximum impact. Our spotlight will be on regions such as the Caribbean, Central America, Mexico, Colombia, Peru and Chile. In terms of segments, we will continue to engage with a diverse clientele, including financial institutions, fintechs, as well as credit unions, ensuring that our solutions cater to the varied needs of the market.

In light of the developments and challenges in the Latin American payment sector, what are your final reflections on the role and future of i2c in the region?

The Latin American market is teeming with potential. Financial institutions and fintechs are at a pivotal point where the need to modernise and upgrade their payment platforms is both a challenge and an opportunity.

i2c is not just offering payment solutions but is paving the way for a more inclusive and technologically advanced financial ecosystem. Our goal is to bridge the gap between the current market state and the future of payments, where every transaction is seamless, secure, and accessible to all segments of society. This vision for a digitally empowered Latin America is what drives i2c’s commitment to the region, and we’re excited about the role we will play in shaping this future.

The fraud prevention industry is experiencing rapid growth in response to amplified regulatory pressure and increasingly sophisticated threats of online fraud.

Dorian Maillard, vice president at investment bank  DAI Magister, outlines the significant growth of the fraud prevention market due to the rise of digital payments, stressing the need for companies to enhance their strategies in response to evolving fraud risks and tighter regulations.

The meteoric rise of digital payments over the past decade has been a double-edged sword. It has revolutionised convenience for consumers and created new business opportunities, but it has also opened a Pandora’s box of fraud risks.

This growing threat landscape is set to significantly propel the growth of the fraud prevention market, which is predicted to more than double to $67billion by 2028.

Digital payments, encompassing everything from online shopping and mobile payments to e-commerce, have created a vast new playing field for fraudsters to exploit. These malicious scammers are growing in number and refining their strategies, employing ever more sophisticated methods, including account takeovers, synthetic identity fraud, and social engineering scams. In the UK alone, fraudsters syphoned off £1.2billion in 2022, with almost 80 per cent of app fraud cases starting online.

As the financial toll climbs, regulators worldwide are stepping up, implementing stricter security and compliance mandates to safeguard the digital payment ecosystem and enforce corporate accountability in fraud prevention. The UK’s recent Economic Crime and Transparency Act 2023, which includes a provision to make businesses liable if they fail to prevent staff or a connected third party from committing an economic crime, is one such example.

Amid this backdrop, where advanced fraud schemes meet tightening regulations, companies across industries have little choice but to elevate their fraud prevention strategies. Investing in advanced solutions that can navigate the evolving regulatory landscape and protect against increasingly sophisticated tactics has become more critical than ever.

Key benefits of digital fraud prevention tools

Real-time monitoring leveraging fraud detection algorithms

The power of modern fraud detection tools lies in their ability to monitor transactions and user behaviour continuously, in real time. By analysing vast datasets, these tools can spot anomalies that signal fraudulent activities, such as unusual spending patterns or suspicious login attempts, with greater accuracy and efficiency. This ensures enhanced protection against fraudulent activities while allowing legitimate transactions to flow smoothly without unnecessary interruptions or delays.

Scalability and customisation

As businesses grow, so does their need for scalable and customisable fraud prevention solutions. Cloud-native digital fraud prevention tools are particularly adept at meeting these needs, offering the flexibility to scale with a business’s growth and the adaptability to respond to evolving transaction volumes and fraud strategies. These tools also enable businesses to tailor their fraud prevention measures, allowing for the integration of industry-specific rules and parameters that align with their unique risk profiles.

Enhanced security and regulatory compliance

In sectors like finance, healthcare, and technology, stringent regulations govern the protection of sensitive information from unauthorised access or misuse. These regulations mandate comprehensive measures, including data encryption, secure storage, meticulous access control, and detailed reporting of security breaches or suspicious activities. Integrating digital fraud prevention tools that offer multi-layered security features, such as encryption, authentication, and robust access controls, allows organisations in heavily regulated sectors to meet these stringent security requirements more efficiently and effectively.

Improved customer retention and financials

Implementing strong fraud prevention measures demonstrates a business’s commitment to protecting its customers’ security, an essential aspect of building a trustworthy relationship. This commitment instils trust and fosters a deep sense of loyalty among customers. When customers feel secure and valued, they are more likely to continue using the services or products of a business, leading to increased customer retention. Over time, this loyalty translates into sustained revenue growth as satisfied customers make repeat purchases and are more likely to recommend a business to others, expanding the customer base and boosting revenue further.

AI-native technologies unlock new possibilities

Advanced fraud detection and prediction

AI-powered fraud detection utilises advanced algorithms to do more than analyse real-time transactions. These algorithms learn from historical trends and predict potential fraud risks before they even happen. This proactive approach offers a significant advantage over traditional methods, which often play catch-up with fraudsters’ ever-evolving tactics.

Multi-dimensional analysis

AI algorithms are powerful detectives in the fight against fraud. They can analyse diverse data sources, such as transaction history, device fingerprinting, geolocation data, and social media activity, to create a comprehensive risk assessment for every transaction.

Automation of operations

AI automates many aspects of fraud detection and prevention, significantly reducing the need for manual intervention and enabling organisations to efficiently process a higher volume of transactions.

A consolidated future for fraud prevention

The battle against fraud faces a double threat: smarter criminals and stricter regulations. Fraudsters are deploying ever-more sophisticated tactics, leading to billions in losses annually. Adding fuel to the fire are increasingly stringent regulations, especially for companies operating across borders. This creates a perfect storm – businesses need advanced technology to combat a growing array of fraud risks while navigating complex compliance requirements in multiple regions. The diverse and complicated nature of these challenges is increasing the demand for comprehensive fraud protection solutions incorporating advanced analytics, machine learning, and AI capabilities.

Consolidation allows fraud prevention providers to acquire the advanced technologies and expertise to offer more comprehensive and globally scalable solutions to meet these requirements. It also enables providers to cater to growing customer preferences for integrated, end-to-end solutions that provide a wide range of capabilities, from detection to prevention and mitigation.

Rapid technological advancements will also likely further propel this consolidation in the sector as developing effective in-house AI-native solutions is becoming increasingly complex and resource-intensive, especially for large incumbent players that have yet to fully embrace the technology and AI shift.

GoCardless, the bank payment company, has reached an agreement to acquire competitor Nuapay, the open banking business of EML Payments Limited, subject to regulatory approval.

The Nuapay acquisition will significantly scale GoCardless’ indirect channel proposition, consolidating its position as a key payment provider to existing and new customer segments including Independent Software Vendors (ISVs) and Payment Service Providers (PSPs).

By incorporating Nuapay’s offering into its bank payment platform, GoCardless will fast-track the rollout of new disbursement capabilities to its customers and prospects. This could also enable GoCardless to unlock new vertical sectors and use cases in areas including payroll, financial services, utilities, insurance, gaming and gambling.

Luke Fossett, general manager of GoCardless ANZ, said: “Acquiring Nuapay will not only accelerate the execution of our product strategy, but will also enable us to meet the demand for more comprehensive payment solutions from Australian and international businesses.

“The combination of both organisations will create a full-service bank payment provider that will help businesses collect and pay out via direct debit and PayTo, something our customers have been asking for across a range of industries. We know that approximately 95 million direct debit payments occur in Australia every month, and we estimate the volume of the payout and disbursements market to be almost double that, presenting a significant opportunity for GoCardless.

“The acquisition will allow customers to unlock these capabilities via a single payment provider. In addition, they’ll get access to advanced features to help them combat fraud and improve payment success rates — not to mention integrations into more than 400 platforms they use to run their business, from CRM to billing to invoicing.”

Transforming how the world pays

Businesses and partners will benefit from a full-service provider with a “relentless” focus on bank payments, enabling disbursements and payment collection through direct debit, real-time payments and open banking, alongside enhanced features for improving payment success and reducing fraud.

Brian Hanrahan, co-founder and CEO of Nuapay, said: “How the world pays and gets paid is being transformed, with account-to-account payments and open banking playing the central role in that shift. Building on that shared vision, this acquisition will result in a combined organisation with deep domestic and international payments and open banking expertise plus the scale to harness these opportunities for our clients and partners.”

The announcement is the latest milestone for GoCardless as it accelerates its path to profitability. In the last year, it has launched GoCardless Embed, a white-label product to PSPs to acquire customers at scale, and has engaged in new partnerships and renewed existing agreements with the likes of JustGiving, Xero and Ecommpay.

High payment company valuations and funding rounds were driven by investors bidding up deal prices without paying significant attention to profitability. However, now there is a far greater focus on earlier profitability over hyper-growth; leading to questions on whether this trend will last. 

The findings come from a new report released by the Payments Innovation Jury, a not-for-profit initiative analysing insight of leaders from the payments industry. The 2024 global report ‘Market meltdown – impacts on infrastructure, regulation and innovation‘, reveals global payment leaders’ views on how tumultuous macroeconomic changes over the past two years have affected their sector.

Research undertaken in collaboration with the World Bank and backed by Interswitch, FIME and HPS, features 136 jurors from across the globe, all of whom are in senior roles at national payments companies, banks, fintechs, payments policy bodies, central banks and investors.

Overall, the Jury judged start-up businesses (55 per cent), as the most negatively impacted by plummeting valuations and investment rounds, followed by scale-ups (38 per cent) and enterprise-scale businesses (seven per cent).

Businesses developing AI and climate fintech tools and technologies also look the most likely to benefit from the diversion of investment from payments businesses.

The report also suggests that, while credit and debit cards will remain important in developed markets, their growth is becoming increasingly more difficult to achieve than before. In emerging markets in which they were unable to replicate this success, cards could struggle to improve their position – due to fierce competition with account-to-account payments and mobile money.

Planning to ‘weather the storm’

Banks, rather than fintechs or mobile network providers, will ultimately be the major players in mobile wallets globally.

The talent acquisition activities of payment enterprises in developed markets are a significant challenge for those in emerging markets, with almost 60 per cent of Jury members in emerging markets saying that they are losing an unacceptable number of staff with consequential risks to innovation programmes and sometimes even ongoing operations.

Asia Pacific retained its crown as the region with the most payment innovations, while the Middle East and Africa emerged as a clear second favourite despite Africa’s macro-economic challenges, relatively low levels of investment funding and a talent drain.

John Chaplin, founder and chairman of the Payments Innovation Jury, commented: “Looking back on the last two years of market turmoil, it feels like this unique insight from industry leaders has never been more needed. Our Jurors’ deep understanding of the causes and effects of macroeconomic changes and their impact on the long-term direction of the payments industry helps all of us understand how we can best move forward and continue to weather the storm.

“I am immensely grateful to each of the 136 members of the Jury for thinking through such complex issues and sharing their views, as well as to the World Bank, Interswitch, FIME and HPS. Their participation and support makes the publication of these insights possible, and this report is very much their report.”

Klarna has introduced open banking-powered settlements in the UK, enabling consumers to pay directly from their bank accounts instead of using debit cards.

This move marks a significant shift in the global payments and shopping solutions provider’s ambition to create a future-oriented payments network. Open banking settlements simplify and secure transactions for consumers while providing insights into spending habits.

Established in 2005, Klarna has focused on accelerating commerce and now boasts more than 150 million active users worldwide and facilitates 2.5 million transactions daily.

Open banking settlements have been introduced for Klarna’s Pay Now instant payment option, with plans to extend this feature to Pay in 30 and Pay in 3 later in 2024. This launch is poised to significantly boost open banking adoption in the UK, where approximately five million Britons utilise open banking payments monthly.

Outside the UK, Pay Now by bank is already live in 10 countries around the world and is regularly used by over 20 million consumers each month.

Pay by bank

To complete a payment, consumers select ‘Pay by bank,’ redirecting them to their mobile banking app for a swift and secure transaction.

By linking their bank account to Klarna, consumers gain access to spending insights and budgeting tools within the Klarna app. Moreover, sharing bank data enables Klarna to make more informed lending decisions based on the consumer’s actual spending habits, ensuring a tailored fit with their budget.

Wilko Klaassen, VP, open banking at Klarna, said: “Open banking offers a huge opportunity for Klarna to reduce the cost of payments to society by cutting out the established card payment networks, and using up-to-date bank account data to make ever better lending decisions. This new launch builds on the success we have seen in 10 countries across Europe and will give UK open banking a major boost.”

NatWest announces a strategic minority investment in fintech firm Icon Solutions, bolstering their partnership initiated last September.

The investment aims to accelerate NatWest’s payments modernisation efforts, enhance customer choices, and foster future payments innovation.

Last September, NatWest selected Icon Solutions Payments Framework (IPF) to accelerate the bank’s payments modernisation. IPF is a low code payment framework that empowers business payment experts to create industry leading workflows, along with enabling software engineering teams to quickly extend and create highly customisable integrations into existing bank systems.

The investment and ongoing partnership with Icon Solutions forms part of a payment platform modernisation plan which will build on the bank’s existing relationships and accelerate its ability to respond to the rapidly changing payment market.

Developing payment innovations

Mark Brant, chief payments officer at NatWest, praised its relationship with Icon Solutions for bringing “our payments estate to life”.

“This investment is fundamental to the delivery of our modernisation in payments technology, which will enable us to better serve our customers and to remain at the forefront of the payments industry,” he said. “We continue to play a major role in developing payment innovations for the future, embracing new technologies, standards and capabilities to shape the future of the payments landscape while improving customer experience.

“Combining the scale and resilience of a bank with the speed and innovation of a fintech like Icon Solutions means we can bring new payment services to our customers quickly and safely.”

Tom Kelleher, co-founder and director of Icon Solutions, also added: “NatWest and Icon have been on a journey together since 2019 to modernise payments at the bank, inspired and led by Ian Povey and Mark Brant. We have a common belief in the adoption of low-code technologies to deliver new payments systems quickly and safely, with a significantly lower cost profile.

“Overcoming vendor lock in and powering in-house builds with the Icon Payments Framework (IPF), NatWest can now drive change from within. Building new revenue streams, anticipating regulatory change, responding to market changes or competitive pressures. Today’s investment is much more than an investment, it’s a commitment to a future where payments are safe, immediate, and flexible.”