This month at The Fintech Times our focus switches to reflection as we look back at developments over the last 12 months. 2022 has certainly been a challenging year for everyone with global economic activity experiencing a severe slowdown, with inflation higher than seen in several decades.
Throughout this week, our community of fintech CEOs and leaders have shared their thoughts on this year’s major fintech trends. Today, we have a focus on paytech and embedded finance with Liberis, TransferMate, Nium, BR-DGE and Adflex.
Rob Straathof is CEO of Liberis, an embedded finance solution and platform founded in 2007. Liberis is on a mission to provide small businesses with accessible and responsible finance, based on the belief that funding should always be a positive force for small businesses.
Naturally for Straathof, embedded finance has continued to dominate 2022 but warns that B2B payments need addressing.
He says: “Embedded finance remains ‘hot’ to investors, which is great news for consumers and small businesses who are in need of better bank accounts, embedded payments and better lending options to improve availability.
“Buy now, pay later for businesses is one of the last mega markets to be truly cracked. Huge amounts of funding have been raised by several players, but none of them has yet broken through as the leader of BNPL solutions.
“Business payments remain broken, with every business working within different processes and parameters, losing hours to admin and severely limiting cash flow. There is a trillion-dollar opportunity to fix B2B payments throughout the UK, and internationally, by seamlessly bringing the manual into the digital.”
Sinead Fitzmaurice, CEO of B2B payment technology firm, TransferMate, echoes Straathof’s views on putting the spotlight on developing B2B payments.
She says: “Over the past number of years, fintech has focused on enhancing the user experience of consumers and individuals, while many businesses have still relied on decentralised systems, particularly within the payments/finance arena.
“Now business is starting to catch up and during 2022, TransferMate has seen a surge in businesses and our partners seeking to modernise their systems and create that same push-button experience, with a growing request for embedded B2B payments infrastructure.”
Also concentrating on payment trends in 2022 is Brian Coburn, CEO at payment orchestration firm BR-DGE. In 2018, he founded BR-DGE with a mission to push the boundaries of payment technology, creating an independent payment orchestration platform that is simple to integrate and adopt.
Coburn comments: “The payment ecosystem has continued to grow in complexity this year as new and innovative providers, methods and services are brought to market. BNPL adoption has continued to grow, accelerated by a downbeat macroeconomic backdrop where consumers are more likely to want to spread the cost of purchases over a longer period, especially for retail purchases.
“However, this has been matched by the traction gained by open banking this year with studies predicting there will be up to 40 million users of the technology within the UK by 2025, according to Zopa. New innovations are quickly becoming an important part of the payments landscape, as customers seek frictionless payment experiences and merchants realise the value of providing greater choice and flexibility.
“Furthermore, payments’ role in building strong connections between merchants and consumers is becoming increasingly clear at this time of continuing economic uncertainty. Across different sectors, especially retail and travel, we are seeing greater awareness among merchants of the risks posed by lost revenue due to inefficient payment systems and the risk fraud poses in damaging credibility with customers. These factors are driving investment in payment solutions that are both joined up and build loyalty with customers.”
For Pat Bermingham, CEO at B2B payments service provider Adflex, many of the biggest trends in 2022 have been influenced by the economic uncertainty that everyone faces.
“As profit margins bear the brunt of pressure from inflation, businesses have had to look to drive internal efficiencies to ensure they can stay afloat, without relying on significant price hikes that could deter customers.”
“One way they are doing this is by streamlining accounts payables (AP) processes using automated payment methods such as straight-through processing (STP), which allow a buyer to ‘push’ a payment to a supplier in real time, greatly reducing the amount of time and resources spent on making and receiving each payment.
“In comparing STP to more legacy methods, we can see that both buyers and suppliers previously needed to access payments through multiple portals and track payments manually. STP automates the process and works seamlessly with business’ back-office enterprise resource planning (ERP) systems through API integration.”
Spencer Hanlon is global head of travel payments and head of Europe at Nium, the B2B financial services technology platform. He describes modern payments as a platform for growth.
“Over the last few years, fintech has been somewhat contained in an economic bubble. The industry has often outpaced other sectors in terms of growth and hiring rates. It has also seen a raft of new innovation enter mainstream financial services, be it crypto, buy-now-pay-later, real-time cross border payments or open banking.
“But faced with macro-economic issues, like the conflict in Ukraine and supply chain shortages, fintech has pivoted away from new projects and beta testing, to focusing on proven solutions that can be executed fast and deliver returns on investment. That’s why real-time, frictionless payments have continued to rise in adoption.
“Businesses have discovered that faster, cost-effective and efficient payment infrastructure can offset financial pressures and ensure greater cashflow management – critical in times of uncertainty. This year, modern payments has been viewed as a platform for growth, not cost cutting, and we expect this to continue in 2023.”