Across the industry, it’s been a month dominated by research and regulatory news, with significant updates to Open Banking, and a new industry group formed.
It was also a busy month at Banking Circle. In the latest episode of our Knowledge Circle series, we brought together a panel of industry leaders to discuss ‘The Great Resignation’ and how recruitment is changing within the current landscape. Watch it on-demand here, and look out for part two, coming on 6 April.
March also saw us celebrate International Women’s Day, speaking to leading female influencers in the payments, banking, FinTech, and financial services world. We were also pleased to receive a double nomination in the Women in Payments EMEA Awards 2022. Our Global Head of Marketing, Miranda McLean, is shortlisted in the Inspiration category, whilst Livia Benisty, our Global Head of Business AML, is shortlisted in the Rising Star category.
On the subject of awards, we were thrilled to come away with the Best Cross-Border Payments Platform in the 2022 Pan Finance Awards, as well as winning the Cloud Computing Innovation of the Year category at this year’s FSTech Awards.
In addition, we have been nominated in the Cloud Innovation, Digital Transformation, and Financial Services Tech of the Year categories at the National Technology Awards, as well as for a further three categories at the UK FinTech Awards, for Payments Tech, Banking Tech, and Rising Star of The Year 2022. Leading specialist provider of global payments data, FXC Intelligence, has also named Banking Circle in its annual list of Top 100 Cross-Border Payments Companies.
March also saw us welcome two new clients. Swiss financial services provider, Igson Capital AG, is enhancing its IBAN offering for companies by working in partnership with us to give its business customers advanced multi-currency account solutions. BCB Group, the leading global provider of business accounts and trading services for the digital asset economy, is also utilising our unique Virtual IBAN solution to improve payment processes for its clients.
Here are some other important stories from the industry you may have missed in March:
New research on payments regulations post-Brexit
The Payments Association, UK Finance, and global law firm Latham & Watkins have together launched a new research report, ‘UK Payments Regulation Review: Making sense of where to go now’.
It investigates the impact of regulation and takes a look at how the industry and its regulators can work together to enhance the payments infrastructure and regulatory and supervisory frameworks following the UK’s exit from the EU, as well as increasing the digitalisation of the economy.
The report identifies areas of opportunity, such as driving change through self-regulation, future collaboration between market participants and regulatory stakeholders, and the importance of international market infrastructure access.
Read more on that here.
The FCA to oversee Open Banking in the UK
The Financial Conduct Authority (FCA) is set to jointly oversee the future of the UK’s ongoing Open Banking implementation, alongside the Payments Systems Regulator (PSR).
In October 2021, the Competition and Markets Authority (CMA) declared that the Open Banking Implementation Entity (OBIE) was not correctly managed by its former boss, who has since resigned.
As a result, a new regulatory oversight committee will be established, led jointly by the FCA and PSR, with HM Treasury and the CMA as the other members, and the CMA will continue to oversee order-related activities until the establishment of a long-term regulatory framework for Open Banking by the FCA and PSR.
Read more about what the change means here.
UK FinTechs criticise the CMA over Open Banking payment uncertainty
In an open letter, over 20 FinTech companies have criticised the Competition and Markets Authority (CMA) over a lack of clarity in defining and implementing an Open Banking mechanism for recurring payments, calling for the watchdog to define variable recurring payments (VRPs), an alternative to Direct Debit or a continuous payment authority.
The companies, in conjunction with industry body Innovate Finance, claimed that without clear communication for the implementation deadlines, FinTechs are at risk of losing clients by not allowing them to benefit from VRPs.
The parties involved in the letter also shared their concerns at the delay in the publication of the CMA’s plans for the future of the Open Banking Implementation Entity (OBIE), as detailed in the story above.
The CMA responded to the letter by publishing a clarification of the definition of VRPs for sweeping.
Find out more about that here.
RFI Global publishes BNPL report
A new report, released by RFI Global, titled ‘The Global State of BNPL: How Banks and Providers Can Champion and Leverage Customer Interest to Succeed’, looks into Buy Now, Pay Later (BNPL) attitudes across Europe, Asia Pacific and the US.
It finds that increasing numbers of consumers are taking advantage of flexible payment options, and looks into key drivers of usage, the reason behind Gen Z and Millenials’ interest, and the merchant benefits of this.
The report also explores how traditional banks and BNPL providers can maintain the momentum and leverage opportunities as the growth of BNPL continues.
Download the report here.
Pay.UK publishes new strategy document
On 2 March, retail payments authority, Pay.UK, published its new strategy document, ‘Our foundation for the future 2021-2026’, detailing its purpose, vision and strategic goals, aimed at helping it to “continue to keep the UK at the forefront of the global payments industry.”
The new strategy provides the framework to deliver a fast, efficient and well-managed payments platform today, and a next-generation payments platform for the future.
View the new strategy here.
2022 Global Payments Report predicts growth of global e-commerce market
The 2022 Global Payments Report by Worldpay from FIS examines current and future payments trends across 40 countries.
The new report shows the global e-commerce market is projected to grow 55.3% between 2021 and 2025, reaching approximately $8.3 trillion in transaction value.
The study also revealed that BNPL is projected to be the world’s fastest-growing payment method both online and in-store through 2025.
Download the full report here.
Crypto firms waiting for approval as registration deadline looms
The Financial Conduct Authority (FCA) has so far only approved a quarter of applications from crypto firms seeking the necessary permits to run a business in the UK, ahead of the 31 March deadline.
From April, UK-based digital asset businesses must be on the list of registered cryptocurrency companies, but so far only 27 of the 106 companies that have applied have been given the green light from the regulator.
The FCA evaluates the ability to participate in the registration of crypto companies with controls to prevent their products from being used for money laundering and terrorist financing. However, it says that many applications so far have been ‘poor’.
Read more on that here.
UK SCA rules deadline arrives
On 14 March, new strong customer authentication (SCA) rules came into force in the UK.
The new rules, which were adopted by the FCA in 2019, are designed to help protect consumers from fraud when shopping online, with customers being asked to verify their identity, through methods such as their banking app, or a one-time passcode.
Businesses have had two years to prepare for the change, and as of 14 March, any merchants that haven’t implemented the new rules risk having customer purchases declined.
There are two key exemptions to the SCA to help merchants and limit the risk of consumer disruption. The first is the SCA reauthentication exemption – customers will not need to reauthenticate when they access their account information through a third-party provider (TPP).
There is also a contactless exemption. Issuers may choose not to apply SCA to contactless point of sales transactions where some conditions are met, for example, the amount of payment transactions not exceeding certain thresholds.
EU ACHs complete migration to TIPS
The migration of European automated clearing houses (ACHs) from TARGET2, to the TARGET Instant Payment Settlement (TIPS) system, the new market infrastructure service launched by the Eurosystem, has been successfully completed.
11 ACHs moved their technical accounts from TARGET2 to TIPS for the settlement of instant payments.
The move to TIPS began in December last year and took place in several waves, with groups of ACHs migrating at different times and finally completing on 25 March 2022.
New report from the FSB reveals Big Tech and FinTech grip on financial services
A new report from the Financial Stability Board (FSB), ‘FinTech and Market Structure in the COVID-19 Pandemic’, shows how the pandemic has enabled Big Tech companies like Google, Amazon and Apple, as well as FinTechs, to widen their footprint in financial services.
The paper looks at both the benefits of this expansion, including improved cost efficiencies and wider financial inclusion for previously underserved groups, as well as providing a caution over the potential for market dominance.
View the report here.
Innovate Finance forms International Fintech Group
The industry body has formed an International Fintech Group to promote the UK FinTech scene overseas.
Innovate Finance and the Department for International Trade (DIT) will co-chair the Group, which will convene for 12 months to increase collaboration across the sector on initiatives designed to increase the UK’s position as a global leader, as well as build awareness of existing and planned trade agreements, frameworks, and available support.
Key objectives over the next year include the creation and publication of a UK FinTech Trade & Investment brand that expands on the DIT “Made in Britain” campaign, as well as the creation of a portfolio of more than 20 UK FinTech case studies, with a focus on those that have achieved success in overseas markets.