What macro-trends will impact the fintech sector in 2023?
It's hard to ignore the global macro-economic headwinds that are impacting every part of the economy, not just fintech. An economic downturn means possible slowdowns in payment volumes, but also makes a compelling case for why businesses need more efficient payment rails that are seamless, fairer and faster. Add to that a high inflation environment driving rising costs and squeezed margins for businesses, and I'd expect to see more merchants focusing on what they can control in the checkout, which is driving down their transaction costs and improving conversion through better UX. That means looking at alternatives to the card-based systems that deliver on those two goals - Open Banking in particular is really well placed to meet these needs.
What's the biggest risk to Open Banking over the course of 2023?
Open Banking payments are already here, and there's no going back - the benefits are too great for merchants and consumers, and the cat is to some extent out of the bag. However, the biggest risk is that the ecosystem doesn't continue to build on the single payment foundations of the Competition and Markets Authority (CMA) order in the UK and PSD2 in Europe (as well as other OB initiatives globally) by extending into more use cases such as subscriptions and direct debit replacements. There has rightly been a lot of talk about the advent of non-sweeping VRP, which will be a big part of that and has the potential to totally reshape the way we pay and get paid. But at the moment as an industry we're still testing and learning how this will work, so getting this right with engagement across Open Banking payment providers and banks is going to be key to delivering on the early promise of Open Banking in coming years. Across payments, navigating the likely upcoming recession is going to be top of mind for many businesses along with the usual suspects such as information security risk and fraud.
What regulation do you want to see implemented in 2023?
In the UK, the upcoming deadline for the implementation of the Financial Conduct Authority (FCA) Consumer Duty is welcome, ensuring all companies are putting the welfare of their merchants and consumers at the core of their business. This is something we've always strived to do at Vyne, and the rigour across the industry is going to improve consumer outcomes. We've also been working alongside peers on Joint Regulatory Oversight Committee (JROC) consultations to plan for the future of Open Banking, and would love to start implementing some of the potential quicker wins that are being identified. In Europe, bringing in mandatory instant payments support with no consumer fees will be a fantastic step forward that will turbo-charge the growth of account to account payments.
How do you see Open Banking and the payments market in general evolving over the course of 2023?
2023 is going to be a breakout year for Open Banking payments, in the UK and across the world. We're going to see account-to-account payments becoming an established consumer behaviour in more and more markets, with merchants realising the benefits of offering it on their checkouts. It will be the default payment method in certain sectors such as automotive earlier than people realise.