Payments, Banking & FinTech roundup: November 2020

Despite the year drawing to a close, the payments industry is by no means slowing down, with market growth, cashless societies and acceleration of digital transformation all key themes in November.

Of course, this time of year also means talk of Christmas, and ahead of the big festive sales push, Banking Circle is proud to be supporting payment businesses’ merchants by providing USD collections for sellers across a wider range of online marketplaces.

In an interview with Finance Monthly Magazine Banking Circle Chief Executive Officer, Anders la Cour discussed whether banks should be afraid of tech giants, shared his views on the likes of Amazon, Google and Apple entering the payments sector, and explained how financial institutions can stay competitive. In his latest piece for The Paypers, Anders provided insight on how to successfully serve SMEs both now and post-COVID-19.

Finally, our Chief Growth Officer, Søren Skov Mogensen, reflects on Sibos 2020, exploring the drive towards the digital delivery of payments in this podcast.

Here are other important stories from the industry you may have missed this month:

China set to become the first cashless society

According to the China Fintech Report released by The South China Morning Post, the country is poised to become the first cashless society. The report, which delves into latest trends and future trajectories, claims the shift will be mobile-first, with mobile payments already comprising four-fifths of all payments and over half the value of all non-cash retail payments.

Chinese FinTech companies are already renowned for pushing boundaries, and other key findings from the report include the expansion of InsurTech, as well as the prioritisation of blockchain.

The country is stepping up its blockchain use with applications in SME lending, risk management and operation efficiency in anticipation of launching the world’s first sovereign digital currency.

COVID-19 spurs two years’ worth of digital transformation in two months

The fast-tracked digital transformation is being seen as the silver lining of 2020, according to the Sibos 2020 Report compiled by Finextra and Intel.

The resource explores the internal impact on financial institutions, from mass remote working and distribution of IT estates to adapt to, alongside rigorous oversight of new workflows, security practices and productivity.

Expectations and behaviours of retail customers also added to the challenges faced, however, adopting and embracing these changes has helped financial institutions to become more flexible.
This is a topic we’ve explored in-depth at Banking Circle, delivering a number of webinars throughout the year, looking at the benefits of digital as banks and payment providers have had to work in new ways.

McKinsey and Euro Banking Association examine the future of European payments

The new report takes a look at the options facing banks in a changing landscape.

The collaboration reveals that Banks’ payments have grown steadily at approximately 3% over the past 6 years, however, some specialist payment providers have grown considerably more in the same time frame, suggesting a challenge to banks’ traditional role at the centre of the payments ecosystem.

The report also indicated that executives and experts believe that the rise of technologies could allow other payment providers to come between banks and their customer relationships, and cited concerns over lack of flexible operating models along with rising customer expectations.

Banks have a choice whether to lead, accelerate, follow or reduce their payments footprint. McKinsey and Euro Banking Association investigate more of the strengths and opportunities for banks here.

Payments processing solutions market expected to grow by 11% in 5 years

A new study from Global Market Insights projects the industry to grow by more than $80 billion by 2026, from $60 billion to over $140 billion.

This growth is expected to come from increasing digitalisation, growing adoption of mobile wallet and the increasing popularity of cashless transactions. Consumer preference for mobile commerce will be enhanced further by rising smartphone usage.

Latin America, in particular, will witness a Compound Annual Growth Rate (CAGR) of more than 13% during this period, with much of this change due to the high penetration of mobile wallets.
Elsewhere, the Middle East and Africa look set to also record significant gains in this area. Consumer preference towards m-commerce is growing, particularly in the Gulf states.

Find out more from the report here.