Firstly, the blockchain technology and crypto space. Over the last couple of years, significant strides were made in the adoption of the technology and next years will bring even more developments in the space. It is time to prepare for a revolution that will impact the way we process transactions or manage data, among others. We should jointly focus on making sure that our community is well equipped, understands and can operate safely and successfully in this new environment. Secondly, open banking with a goal to improve the customer experience. Ensuring maximum transparency and security whilst increasing competition are some key aspects to be looked at. Open Banking will revolutionise the way customers engage with financial products and services and will be fuelled even further by the behavioural changes triggered or accelerated by the pandemic. And thirdly, ensuring a fair and safe regulatory environment for the members and the whole payments community.

A significant challenge faced by our industry relates to cryptocurrencies. Many industry participants have concerns related to AML/CFT/KYC issues but also do not wish to miss what could be a substantial business opportunity. With the extended low interest rate conditions, increasing cost of compliance and vastly increased levels of competition for customers; it is unsurprising that market participants look to crypto as being both alluring and concerning in equal measure. The advent of CBDCs adds another layer of complexity; especially, in countries such as Nigeria who have recently launched the eNaira. The Payment Association has the opportunity to be a guiding light across the industry to help participants navigate these complexities and to truly represent the industry participants as they engage with regulatory bodies.

1. Working with regulators and enabling Tier 1 / high street banks more receptible to EMIs and payment service providers…. can we aim for a cultural shift!!
2. Innovation and trust in industry. How can the industry innovate and also build trust given the current overly regulated landscape and increasing  frauds in the pandemic.
3. How do we go back and Start trading in Europe like pre Brexit days!!! A tall ask!!!!

I have been conscious of the gap between the payment ecosystems across the US and North America and the United Kingdom and Europe. Despite the constraints put upon us all in the aftermath of a pandemic, lines of communication and visibility of affairs has never been more open. However, it is our payment ecosystem that is yet to be synchronised. I believe here there is an opportunity for these international sectors and schemes to join together and imagine an overall better-connected landscape.

There are several challenges and opportunities that the payments industry will experience, in order to provide the most value and insight to its membership I believe the Association should focus on the following:   Regulatory – thought insight into and lobbying to affect regulation

• Especially post Brexit, how to help payment providers and their clients keep safe in a busines friendly manner across the UK and Europe
• How to address potential regulation in associated industries that affect payments i.e. increased regulation in credit for BNPL providers and how that affects the payment industry (payout of loans etc.)

  Challenge of new digital currencies

• Thought leadership on the future of digital currencies, and how to work with them today and adopt them as they become more mainstream
• Discussion on how as an industry we are setting up to ensure the use cases (technical and monetary) are utilized

  Digitisation of payments

• How to ensure as the digitization of payments does not lead to less financial inclusion – how to help the wider population across Europe
• How to remove the pain points of payments – i.e. how to make those back office processes like KYC simpler/more efficient

  Membership relevance:

• As more and more members join from diverse industries (as embedded finance grows for example) how to ensure relevance to all parties

  I do believe also that the Payments Association should start to focus on activities across Europe, as more and more companies look for pan-European solutions, help and advice.

There are many challenges ahead and believe we must unite as an industry to adapt. Brexit was always something on the horizon, many unsure of the implications and feel this is still a challenge for many with regards to cross border marketing and licencing. Regulations also may become stricter since events such as Wirecard unfolded. This may in some way improve our processes by adhering to new regulations but at the same time it puts additional workload and expense on smaller fintechs. This may also address increase fraud issues across the payments industry, some of which is associated with the expansion of cryto currencies in our sector. This is an area that certainly needs focus as regulators and the central banks across UK and EU will be watching. Also like many other industries the pandemic has hit many, although feel as a sector we have responded well, but still a challenge to be aware of for the future.

Mitch believes the key challenges that The Payments Association should address in 2022 are:

• Changing regulation: The Payments Association should be at the forefront of thought leadership and advising its members on the new UK Money Laundering Regulations, and increased regulation and supervision of operational resilience and wind-down plans.
• Additional post-Brexit requirements and how to work with Europe effectively: There is an excellent opportunity to cross-share information between The Payments Association and The Payments Association EU, to assist the wider industry with best practices. This could also be useful in promoting innovation and helping the industry to evolve by monitoring trends across the EU and helping to ensure the UK maintains its position in the FinTech ecosystem.
• The expansion of the industry and the capacity of the FCA to review applications: While The Payments Association works with the regulator already, the industry needs support from the FCA and the FCA in turn needs the industry to appreciate the application process. The Payments Association is well positioned to support this.
• The FCA approach and review of trade finance: The FCA is focusing more and more on trade-based money laundering. Bringing together project financial crime, project international trade and project regulator from a board perspective could have cross-project benefits.
• De-risking and financial inclusion: The more de-risking happens, the more that certain areas of society have fewer options when it comes to accessing financial services. The Payments Association should use its voice to keep the focus on this important matter, and to help the industry avoid another payments lockdown, as happened with Wirecard.

1. Shaping Post-Brexit landscape: Shaping the agenda for the UK to follow EU regulation standards and at the same time allowing tailored approach for the domestic market. 2. Regulatory alignment and divergence – Alignment between UK regulators (e.g. PSR and FCA) – Post-Brexit divergence from the EU – Opportunities for cooperation and alignment with other jurisdictions (e.g. Asia and US) 3. Promoting innovation: Leading the conversation on Stablecoins, CBDCs and Cryptocurrencies to drive the agenda. Providing a platform for members to connect with regulators at a global level. 4. Expending support systems and collaboration platforms across geographies and jurisdictions to create a truly global community.  

The main challenges that I think the The Payments Association should focus on are:

1. Managing the changing regulatory landscape and it’s impact on the growth of the payments community:
   1. Balancing both the relationship and needs of the payments community with the regulators to promote continued growth and innovation
   2. Creating a healthy relationship between all stakeholders

 

2. The rise of new innovative technologies (e.g. Blockchain) disrupting the status quo:
   1. The future of payments depends on it’s ability to continually innovate and bring new capabilities, use cases, and efficiencies to society as a whole
   2. In my view The Payments Association will play a key enabler role to ensure we capitalise on new technologies as they develop.

 

3. Open Banking levelling the playing competitive field for new fintech entrants:
   1. Unleashing payments potential to bring safe, secure and a fair ecosystem for all participants

 

4. Enabling greater access to Financial Inclusion to help serve society better:
   1. Using trusted and secure payments to promote an inclusive and diverse society
   2. Promote equal opportunities for all

I believe the following should be major focus areas over the next 12 months:

• Whilst more and more people are making digital payments, there are still some consumers who can’t pay digitally or are not confident to do so. As more payments go digital, how do we ensure that vulnerable customers are not left behind and their needs are still catered for?
• Once SCA goes live, what are the next steps in developing innovative security and authentication capabilities?
• After COP26, what should the payments industry focus on delivering that supports a more sustainable future?
• How do we continue to support the development of blockchain technologies such as central bank digital currencies?
• How does The Payments Association continue its evolution, expanding its member base across business types and into new geographies?

There are lots of practical areas that the Payments Association is currently focusing on – and rightly so. This provides immediate value to its members. Two topics which I would love to discuss as potential focus areas are the development towards open finance & following on to open data. These two points next to the currently discussed topics are going to be the cornerstone for the development of the payments industry over the nexts 5 years.

There are many challenges ahead in the Payments world – the challenge of meeting customer demand for real-time payments whilst balancing the need to introduce friction in certain payment journeys is not an easy one but reducing fraud and enabling customers to feel safe and secure when making payments is key.  A successful delivery of Strong Customer Authentication next March is critical for both Merchants & Issuers – we need to ensure that customers are not getting payment declined incorrectly and that both Merchants & Issuers are ready whilst also ensuring compliance and start to realise the benefit of reduced fraud losses.  The way Merchants react to ensuring minimal friction is critical – and the use and growth of Delegated Authority by Merchants will be an interesting development. Fraud losses in electronic payments through Authorised Push Payments (APP) scams continues to rise and is an increasing concern for both consumers and the industry.  Whilst the New Payments Architecture and the reshaping of Faster Payments and introduction of ISO20022 is important, we have to address the increasing concerns around APP losses now, not wait for when NPA delivers.   It is really important the industry works together bringing cards and electronic payments as one to drive down fraud losses and customer impact. The increasing use of inappropriate messages in electronic payments (similar to what we see in Social Media) is a major concern and one that needs to be addressed now.  We need to stop these messages at source but also ensure we have the protective opportunity to remove them if they are sent to our customers. The other challenge will be to find a way of ensuring we still have an opportunity to innovate and compete and not only be able to respond to regulatory change over the next 12 months.  

The payment industry is facing an unprecedented change on a global scale. This development is occurring throughout the payment’s ecosystem from domestic and instant rails, to cross-borders payments. Driven by new technologies and new customer expectations, the future payments landscape will be friction-less and real-time. However, although the various payments initiatives are moving in the same direction, their lack of synchronicity makes the process fragmented, hybrid, and often difficult to predict.   Moreover, payments transformation relies on complex new technologies and sophisticated customer expectations – all contributing to the creation of further hurdles in understanding what the impact will be on the payments ecosystem and sub components of connectivity, messaging, existing infrastructure and core systems. The payments industry like most others has been rapidly digitizing. The increase in the use of cloud technology and applications is giving the general public more accessibility to all things in their lives. As a result, consumers expect to have instant access to everything, including financial services. The broader financial services landscape is thus transforming. FinTech’s, or financial technology companies, are flooding the market, determined to disrupt the former financial industry by capitalizing on the increased accessibility to all things digital. As customers have grown accustomed to increased access to faster and more convenient payments on the retail side, they are now demanding similar conveniences and service levels in B2B payments and transaction banking. Traditional lending platforms like banks just aren’t meeting the expectations that today’s consumers have around ease and speed of payments. This will open even more doors to consumers and continue to reconstruct the payment ecosystem to incorporate customers’ increasing demands for personalization, customization, and speed. Innovations are reshaping the payments landscape, boosting customer expectations, and intensifying competition globally.   Bosted and driven by rapid changes across the industry, the new world is seeking recognised, trusted, expert for payments, securities, connectivity and messaging with a track record of success to help them steer through this storm of change.  Instead of providing technology with functional components that deliver a service, the Industry is now starting to see the shift, driven by the consumers and is looking for more to ensure it retains its ability to grow and extended access to global markets & services through multiple clearing, networks and gateways that are compliance and secure.  The industry needs to transition away from old tech, on prem, heavy and expensive infrastructures to operate and maintain services in the new Digital Transformation world of micro-services and APIs, underpinning the need to Lower the TCO with limited IT & infrastructure cost. With a mixed adoption pace this has create a fragmented landscape where managing interoperability and country specific requirements will be key. It is for this reason that organisations such as the Payments Association, should focus on key initiates that will help set the agenda for the next 2-3 years. Therefore, it is my recommendation that the Payment Association should offer a platform for greater thought leadership and address such topics as:

• Providing seamless and secure payments and removing the barriers to entry
• Fraud-prevention
• Make data your most valuable asset
• Driving a global seamless economy
• Improving the mobile commerce experience
• Transition of cross boarder payments to real time
• Changing Legacy systems to SaaS
• Integrating artificial intelligence and machine learning to drive better business decision making

As we know many organisations are struggling to make this change so one of the functions of the Payment Association is to give people a platform to understand these topics better and to work with fellow professional and like-minded people to help improve our industry and to accelerate the pace of change through better collaboration and partnerships.

For the Payments Association, it is key in 2022 to finalise brand transition from EPA to The Payment Association and therefore develop visibility of the brand. In terms of our industry, the acceleration of the digital journey becomes a strategic priority and the key trends and topics should be around: 1. Putting the customer digital journey central to make it frictionright (not frictionless).  2. How can we work at making now open banking a reality for core banking services, but also in terms of payments integration. 3. Related to the future of payments with crypto currency, coming to real world. 4. What will be the new normal of payments and how this impacts all players in the ecosystem.

AI and Machine learning Governance Digital currencies  

Industry-leading thought leadership for not what is available today but for the chart of course for where we need to be tomorrow.   We need to forecast and understand the needs of the industry 5 years from now and deliver the progressive ideation of what that can and should be delivered.   Innovation and change are what everyone will look for from this group.

One of the biggest challenges we face in the payments sector is that we have a well-established set of processes which, largely, work well. There are inefficiencies, of course. There are some questions about concentration of commercial power, and a host of anomalies, but overall, the system is very robust and has evolved to be stable and effective.

At the same time, there are a number of innovations that offer genuine improvements in efficiency, levelling the field and flexibility. Yet, in challenging the status quo, they also bring new risks and challenges. To me, the Payments Association must be alert to these challenges and help the industry steer a safe path to positive innovation without unintended consequences. As an example, the principle of central bank digital currencies seems tremendously encouraging as a means of moving value. Yet if funds are no longer moving between entities (albeit electronically), there is potentially no role for the retail bank as a holder of the nation’s deposits. Under current regulations, deposits underpin lending capacity for the banks and, without them, the impact on liquidity could be profound. At the same time, if the operation of a central ledger becomes the domain of the central bank, then overnight the bank becomes a consumer service. This is not intrinsically bad, but it is very challenging given the construct and original purpose of the facility.  Crypto has a vital role to play in the economy but its impact is complex and facts are often obscured by passions (Whether positive or otherwise). The Payments Association can and must help clarify thinking. New technologies bring new flexibility and new consumer opportunity – but only if everyone has access to the appropriate technologies. Financial inclusion will become a growing challenge for the entire industry over the coming year. All electronic payments bring a level of audit trail and, relative to cash, an erosion of anonymity. What is the right balance to strike? And finally, Covid has challenged the world’s thinking about supply chains. With world shortages of components, skills and freight capacity, there will be a considerable rebalancing of the way business run and this could lead to a significant repatriation of investment and growing political localism. The danger is that with localism there often comes regulatory fragmentation. Many controls are driven by government and governments are not always good at balancing urgency with importance. Hasty regulations can cause real damage. The Payments Association must be in a position to bring realism and balance to the debate.