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

The fintech and payment industry has enjoyed unparalleled highs of innovation this year, while also retaining its resilience and rapport among the economic shifts experienced during the latter quarters. Many remain hopeful that these trends and success stories will be carried through as the industry prepares to enter a new year and a new stage of growth. 

Payments industry predictions 2023
Koen Vanpraet, EMEA CEO, Moneycorp

Here in our final guest post for 2022, Koen Vanpraet of Moneycorp offers his predictions for the evolution of the payments industry in 2023. 

Vanpraet is the EMEA CEO for Moneycorp, a payments fintech operating 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 payment industry and building meaningful relationships. It’s committed to improving the payments process by reducing friction while providing clients with competitive products.

As EMEA CEO, Vanpraet is responsible for driving the respective UK and European business including the rollout of existing and new Moneycorp products and services, and growing Moneycorp into providing peripheral services in the payments and banking space.

With over 30 years of experience in technology markets, Vanpraet has helped to drive value for global technology brands, including Xerox, Hewlett Packard and Easynet/Sky.

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

Here Vanpraet details the growth of the latest payment methods and how they’ll cultivate entirely new benefits for the consumer, as well as a look into the shifting regulatory landscape surrounding these:

End of year payments industry recap: what’s coming next?

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

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

Despite the challenging year for digital assets, seeing nearly $2trillion wiped off 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 major topic in 2022 that gained popularity because of the accelerating changes that otherwise would have taken years to implement. This rapid rise in digital payments and online banking however had caused a critical security challenge to emerge – the confirmation of identities and ability to combat money laundering.

To deal with this issue, automated know-your-consumer (KYC) solutions were developed, allowing for the convergence of billions of data points to give 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 advance towards digital experiences for the finance industry has led to growth and an optimistic outlook for partnerships between fintechs and traditional financial institutions, allowing for 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.

2022 was just the beginning of the financial transformation though. With the many trials and developments of these technologies setting the foundation for the industry, 2023 will be the true test for modern fintech as many of the coming trends are a result of events in the year prior.

Among the major events in 2022 are the early signs of a global recession which undoubtedly will have an impact on this industry and beyond, including in the form of increased regulations, but if properly navigated and set up, the regulations 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 greater attention to fintech companies and payment providers. The surge of nonbanks offering financial services has reached a tipping point and regulatory bodies have increased scrutiny on these companies.

Moving into 2023, regulators will call for more oversight on nonbanks that offer financial services for consumers, ensuring their data is properly protected under compliance and consumer protection laws.

On the other hand, regulators need to find a way to support innovative financial services that provide an alternative solution to underserved customers while still levelling some amount of restrictions over these companies.

In the US, the Officer of the Comptroller of the Currency (OCC) has already started to do so, stating a dedication to work 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 convenience 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 an overall growth in demand for cross-border payments due to consumers seeking faster and more competitive pricing as well as an increase in the importance of globalisation.

To meet these rapidly changing demands in 2023, digital payment providers will need to implement more diversity in payment solutions through investment in APIs, with the goal to increase efficiencies in B2B international payments.

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

The blockchain future

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

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

Moving into 2023, we will start to see blockchain technology take off and companies start to push the boundaries of what was possible through its utilisation. Smart contracts have strong potential for creating the convenience in B2B international payments that businesses crave, and companies will look for new ways to popularise and optimise it for their cross-border transfer systems.

Regardless, of whether it is for payments, KYC, transfers, or other purposes, blockchain technology will make its way across the industry and become the base for many upcoming innovations in 2023.

Economic elephant: recession and inflation

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

Unfortunately, this means investors will be taking a more cautious approach and become more selective with the companies they choose to invest in. This is already taking place 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 favour 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 started blooming in 2022. For these companies to prosper, it will be key to have a proper understanding of volatility to make the best of 2023 as we possibly step into a global recession.

Some may even want to enter emerging markets in Latin America and the Middle East and Africa, creating 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 that can take advantage of these ongoing trends and come out the other side will have solidified their positions in the market.

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