Change is afoot in global payments
“Notwithstanding the pandemic and the recession… the electronic payments industry is in pretty good shape”, a senior executive from Intrepid Ventures told Third Bridge Forum when asked about the state of the global payment industry. However, on the downside, “COVID-19 has accelerated concentration in some sectors in retail, and concentration in payments is bad for almost everyone in the payments ecosystem.”
The future of regulations “is worrisome”. With an incoming Biden administration, the specialist believes that this will be “less friendly to the industry on a number of fronts”, pointing to the Biden-Sanders Unity document as a portent. Moreover, they envision a change of helm at the Consumer Financial Protection Bureau [CFPB], “so I think a more active, more industry-hostile CFPB is a given.”
On the topic of regulations in the global payment industry, the specialist highlighted developments in the EU. “I think it’s all bad [in the EU], but it’s slow. PSD2 is in force, and that’s generally a negative.” In addition, late last year “16 European banks announced the European Payments Initiative. This is the latest putative EU payments champion of the ECB and EC.” The specialist also delved into the ongoing dynamics within China, which is viewed by many US companies as filled with potential as the second-largest global market.
Global Payment Industry Disruptions
When asked about what disruptions the global payments industry is likely to face, the specialist explained that “I don’t see disruption-disruption. The things that could be disruptive to the payments ecosystem will take longer to gestate.” This comes in the form of digital fiat currencies. “I think with digital fiat currencies, there’s no guarantee, but a digital dollar… that consumers or merchants could access, carry, transact with from their mobile phone anywhere, any time, presumably transaction-free, that could have a big impact.” It wouldn’t just be in competition with physical cash, but also money transfer and retail payment systems, he continued.
Alternative sources of revenue and the likelihood of M&A were also discussed.
To access all the human insights from Third Bridge Forum’s Global Payments – 2021 Outlook Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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