All eyes will be on how PSD2 will change the payments landscape this year – but instant payments, advanced authentication technologies and DLT will also change the way we pay in 2018. Capgemini's Top 10 Trends in Payments 2018 outlines some key themes for payments in the year ahead. As far as corporate treasury and big businesses are concerned, the report highlights several key areas of development:
- the growth of instant payments, which will become the 'new normal' for big businesses;
- continued efforts to combat payments fraud, with more investment in advanced authentication technologies;
- research into distributed ledger technology to transform cross-border payments;
- consolidation in banking/payment vendors and changing role of banks in wake of PSD2.
The revised Payments Services Directive (PSD2) is likely to shake up the role of banks in the payments industry this year. It comes into effect from 13 January 2018 and will open up customer payment initiation services and account information services to authorised third parties, which will open the door to more innovation from non-bank providers as well as more competition for banks in the sector. Capgemini's report refers to a new payments ecosystem of better services, greater competition, new technologies and ever-changing regulation. But overall this new payments ecosystem will spur greater collaboration between banks and fintechs. Added to that, instant payments are likely to take off in 2018, offering corporate treasurers the option of making immediate transactions – the report hints that instant payments “are likely to become catalysts for next-generation payments technology offering customers better and faster payments solutions”. And technologies are likely to impact not just the speed of payments but also the infrastructure for cross-border transactions, as well as developments in payments authentication and security.
Capgemini's top payments trends for 2018 are:
- banks becoming platform players to aid collaboration, retain payments’ role;
- infrastructure rationalisation is likely as payments intermediaries come together or evolve;
- payment vendors and banks are expected to consolidate their operations to form larger groups;
- open APIs enable stakeholder collaboration;
- alternative payment channels such as contactless and wearables gain acceptance;
- banks and fintechs explore distributed ledger technology to transform cross-border payments;
- instant payments processing likely to become the ‘new normal’ for corporate treasurers, industry at large;
- as global cyberattacks rise, regulators focus on data-privacy law compliance;
- robotic process automation, machine learning help payment service providers in fraud detection;
- payments firms continue to invest in advanced authentication technologies to fight fraud and data breaches.
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