Non-European finance players stole the show on the first day of Money20/20, the largest European fintech event in Amsterdam. American payment company PayPal grabbed the spotlight when it announced the launch of the PayPal Commerce Platform, an e-commerce system that facilitates buying and selling, fully equipped with functions like fraud protection. This platform is now available in France, Germany, Italy, Spain, the United Kingdom and the United States. Later this year, PayPal wants to expand to other countries, including the Netherlands.
Not much later, the attention shifted from America to China, when the panel members of the session 'Towards new commercial models in payments' on the Commercial Galvanisation Stage pointed out the dangers of the rise of super apps. Panel members felt that super apps could pose a real threat to some players, including banks. The best example of a super app comes from China, where WeChat is now the largest in the world with more than a billion users every month.
Via this lifestyle app, users can chat, order a taxi, go on social media, buy tickets, pay bills, navigate, transfer money and much more. This is all possible via a platform that seamlessly integrates all components. WeChat (like its compatriot Alipay) has also been building up its acceptance network in Europe. In the Netherlands for example, Chinese people can now pay at Schiphol Airport using WeChat Pay, the payment service of the super app. The Dutch airline KLM has also already started working with WeChat.
It is clear that players from other continents are in a hurry when it comes to the creation of new payment solutions with global reach. This poses the very question of whether such solutions, such as the super apps, could disintermediate the financial services industry in Europe. There has been discussion around this topic during Money20/20 and there are those who agree and those who argue that European culture, landscape and regulation differ so much from other continents, that they rule it out. The jury is still out.
One thing that is clear for the financial stakeholders at Money20/20 is the fact that the European landscape is changing. However, this will not come from any new technologies, rather from the application of technologies that already exist. In an audience poll, 58% believed that open APIs are the technology with the biggest impact in the next five years: hardly a new technology.
Whilst PSD2 is stimulating this approach to open banking, too many banks are still in defense mode, focusing on compliance rather than opportunity. If we examine the rise of the super app, social media and marketplaces, it is clear that API-driven platforms are changing the economic landscape and the way consumers, SMEs, and corporations will exchange information. Again, we are left with a question: will incumbent banks participate in this platform economy and embrace it as a new channel?
It won't be easy, is the general thought. European cooperation - not only between banks but also with fintechs - and standardization of infrastructures throughout Europe is still needed for European market players to remain relevant in the long term.
Discussing these developments certainly provided some thought-provoking visions on the first day of Money20/20.