In 2017, we have witnessed several key developments in the mobile payments, online banking and mobile banking ecosystems. With 2018 approaching, it is a good opportunity to review the main news and trends that have shaped the industry and set the stage for what is to come next year.
Mobile payments – Facebook, Microsoft and Google foray into payments
The smartphone vibe has paved the way for many companies to implement new services for their users, with the aim to streamline digital transactions. In April 2017, Messenger users in the US have been granted the ability to transfer money to groups of people in order to be able to split the cost of things, while in November 2017, through a partnership with Nordea and Nets, Facebook implemented a service which enables consumers to pay their bills via Facebook Messenger.
In an effort to make mobile payments and ecommerce as seamless as possible, in October 2017 Google Pay has allowed Android phone users the ability to pay for goods and services with credit or debit cards they have already added to their Google account. Later, in November 2017, Microsoft made a similar announcement, with the launch of its mobile payment app, Microsoft Pay.
Alipay and WeChat Pay moving west
The potential of millions of Eastern tourists visiting European and American countries was exploited through several partnerships that brought benefits for retailers and customers alike. In November, BNP Paribas introduced WeChat Pay to retailers in France and announced plans to expand the service across other European countries. In October, Alipay extended its partnership with Adyen to enable retailers worldwide to accept non-cash payments from Chinese customers in store, while the partnership between Alipay and Marqeta has made it possible for Chinese travelers to pay via Alipay when shopping in the US. A similar agreement was signed in September with Snap Pay, this time for the Canadian market.
Only Europe is visited annually by 8.5 million Chinesse tourists, who spend averagely EUR 3000 for shopping, luxury goods being among the most in-demand products by Chinese tourists. The number of tourists is expected to grow and so does the necessity of addressing the needs of these potential consumers.
Android Pay, Samsung Pay and Apple Pay strengthen their position on the market
Payment service providers have continued the journey of accepting popular payment methods, and banks have jumped on the bandwagon as well. In October, Wirecard has integrated all three payment methods, while Monzo and BBVA have announced the integration of Android Pay. Several banks and credit unions across the US, the UK, Australia, Russia, and China have joined Apple’s list of participating partners in June and August. In June, 60 banks in the US have announced that they started supporting Android Pay.
In 2017, we have seen PayPal moving more and more into mobile payment methods, through the agreements signed with Apple Pay, Samsung Pay and Android Pay that enabled users to select their PayPal balance as a payment method in brick and mortar stores.
Companies taping into online and mobile banking
Among the players that entered the online and/or mobile banking arena, Samsung Pay, Wirecard, Orange, and Oracle have implemented their online, mobile or open banking solutions and platforms with the aim to provide a wide range of services to their customers.
Consultancy Ernst & Young projects a six-fold growth of the online banking business over the next decade. The growth is expected to be driven by the advent of open banking regulation, which should allow companies the access to banking data with the customers’ consent, allowing for the development of tailor made services. In this context, the Open Banking Implementation Entity (OBIE), set up by the Competition & Markets Authority (CMA), is aimed at enabling a new way for customers to take control of their financial data and share it with organisations, other than their banks.
Going the long way of obtaining a banking license
Payment service providers and other fintech companies have gone a long way to obtaining a banking license. In June 2017, Adyen has been granted a pan-European banking license that allows the company to bypass banks and process cross-border payments. Monzo, the UK challenger bank, received its full banking license in April 2017 while Revolut has applied for a European banking license at the beginning of November.
Challenger banks and the year of important investments
Challenger banks have been in the spotlight this year, with Monzo leading the way. The UK-based challenger bank has raised GBP 71 million (USD 93 million) to boost investment in its chase for customers disenchanted with traditional banks. Atom, another UK-based bank, has surpassed GBP 900 million in deposits two years after launching its first savings accounts product and has raised GBP 83 million (USD 102 million) in a funding led by BBVA in March. Tandem, after gaining an investment of GBP 35 million from House of Fraser, has acquired Harrods Bank in August.
2017 at The Paypers
The complex digital transactions industry developments had to be reflected in The Paypers’s guides and reports as well. In 2017, we have launched our first edition of Open Banking and APIs – a new era of innovation in banking and the seventh edition of B2B Fintech: Payments, Supply Chain Finance & E-invoicing Guide 2017. For both publications, we had insightful contributions from experts, partners and influencers who shared their thoughts about the present and future of the payments and banking industry.
We would like to take this opportunity to thank you all for following us and reading our stories this year. We hope that you will continue to follow us on social media and read our insights in 2018. There’s more to come!
Happy holidays from The Paypers!
About Ana Sabie
Ana Sabie is Content Editor at The Paypers and has been actively involved in covering digital payments - related topics, especially in the mobile payments and online and mobile banking space. She is passionate about finding the latest news on cross-border ecommerce, challenger banks, artificial intelligence, and fintech startups.
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