Starting in 2015, when the European Parliament adopted open banking standards (PSD2), there has been a growing momentum in adoption of standards. And, as it happens with standards, this can catalyse innovation and efficiency across the world of payments once they reach a critical mass of adoption. Open banking regulations require banks to open up their systems and data to third-party providers through secure channels. This has the potential to accelerate:
Several financial services firms are increasingly looking to blockchain technology to mitigate the risk of fraud. The three fundamental underpinnings of the technology are distributed ledger, and immutable and permissioned access. Taken together to underpin a payment processing service, they make it possible to trace the entire sequence of wire transfers. Visa launched its B2B Connect Platform based on a private blockchain with the aim of enabling faster cross-border payments. Similarly, a host of banks, including HSBC, BNP Paribas and ING, launched Contour, a blockchain- inspired platform designed to make the $18-trillion trade finance market more efficient and secure. I expect this space to see a lot more action in the coming years.
After decades of plodding along with archaic systems, the $2 trillion behemoth that is the global payments industry, is waking up, shaken up by the fintechs (a revolution of sorts that PayPal ignited). And, as it often happens, innovation in one sector rapidly spills over to adjacent areas; the dramatic change that started in consumer payments created the technology building blocks for digital disruption in corporate payments too. Combined with the adoption of standards and, most notably, the maturity of blockchain technologies, the corporate payments industry is primed for a burst of innovation.
Students and Mentors: Fill up your details and submit
