Fintech and the disruption of banks – where are we now? Part 1: Payments

The landscape for financial services is changing, and while some trends stand out as inevitable, the endgame is still unclear. Fintech is not one single discipline, but a collective term descibing diferent ways of improving and/or disrupting traditional financial services through use of technology, hence the term FinTech. Payments is still the biggest and most mature field within fintech, what is the state of payment innovation, and how is this affecting incumbents?

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What could Facebooks European payment license mean for banks?

Early December, Facebook finally unveiled their newly acquired licenses for e-money and payment services out of Ireland. The rumors of Facebook entering the payment space in Europe has been going on for a while, ever since it was reported that Facebook applied for a money transfer license a while ago. Facebook is already in a unique position to disintermediate retail banks as the most powerful digital ecosystem out there for consumers. The key to Facebooks powerful position is the ability to evolve alongside changing user behavior, and so far, Facebook is excelling at this. According to a study conducted by pwc, 68 percent of bankers are concerned with losing control over their customer interface. A regulatory compliant Facebook should definitely make those concerns turn into worries.

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PSD2 – opportunities, threats and strategic options for banks

As I have described in previous posts, PSD2 will force banks to open up their infrastructure to third parties by offering APIs under the XS2A (access to account) rule. The directive has the potential to fundamentally alter the payment landscape as we know it. One of the reasons why PSD2 will have such a large impact is that it will level the playing field and increase competition by integrating the role of new and emerging payment services into the regulation. While incumbents have the most to lose, there are also opportunities ahead for banks.

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What does PSD2 mean for online merchants?

The purpose of the upcoming payment service directive PSD 2 is to create an even playing field for payments and encourage innovation. The players on this field include banks, fintechs, the PCI (Payment Card Industry) and merchants. While banks are at risk of losing up to 43 percent of retail payment revenues by 2020, the directive represents several opportunities for online merchants.

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A short introduction to PSD2

The coming payment service directive from the European Commission marks a shift in banking regulations. Instead of prohibitions and limitations, the overall purpose of PSD 2 is to create an even playing field and encourage innovation in the payment space as a part of SEPA (Single Euro Payment Area). Although all the technical details is yet to be sorted out, the directive states that banks need to offer payment APIs to third party-providers of financial services, also known as TPPs (Third Party Provider) under the XS2A (Access to account) rule.

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Mobil betaling handler ikke om å bytte ut plastkortet med mobilen

Kampen om mobilbetaling er i full gang, og kundene kan nå velge mellom en rekke ulike tjenester fra bankene. Dette er bare begynnelsen, og flere mobile betalingstjenester er på vei fra Facebook, Apple, Google, Samsung med flere. Tidligere meldte dagligvarehandelen seg på, med en annonsert betalingsløsning fra Norgesgruppen og Coop, ikke ulikt CurrentC fra de store varehandelsaktørene i USA. Mens banker, varehandelen og teknologiselskapene kjemper om å skaffe seg en posisjon innen mobilbetaling hevder flere at bankkort fortsatt er den enkleste betalingsformen og ser ikke behovet for betaling med mobilen. Denne konklusjonen har én fundamental feil, og det er forutsetningen om at måten vi betaler på forblir uendret.

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