European and North American Payments Outlook: Insights from a Former Adyen Executive
- Johann Kerhousse
- Jan 31, 2024
- 2 min read
A conversation between Hannes Leitner of Jefferies Investment Bank and Johann Kerhousse of FinBlue Partners.
The payments landscape is poised for significant shifts, influenced by past economic policies and emerging market dynamics. During a comprehensive conversation, Johann and Hannes outline what they see as a sector navigating through the complexities of regulatory change, market saturation and technological advancements. To succeed financial technology firms will need to change how they operate, functioning in a way that continuously self-adjusts, maintain competitiveness and capitalise on new opportunities. Six key themes going into the second half of 2024.
Read the full interview below:
#1 Increased Regulatory Scrutiny and Impact on Innovation
Johann noted the likely intensification of regulatory focus, particularly affecting financial technology firms that are unaccustomed to such heightened oversight. This could stymie innovation temporarily as companies adjust to new compliance and data protection standards.
#2 Consolidation and Market Saturation
The payments industry is ripe for a wave of consolidation due to increased competition and a crowded market. Firms unable to differentiate their offerings could face exists or be absorbed by larger entities. This consolidation trend is partly a correction from the past decade's rapid expansion fuelled by loose monetary policies which led to a proliferation of tech-savvy payment players.
#3 Shifts in Investment Patterns
The indulgence that investors showed towards payment firms and neo-banks will wane, pivoting towards a more cautious and selective approach. This could affect the funding landscape, pushing companies towards private credit funding, driving forward a more sustainable business model and seeking operational efficiencies.
#4 Technological Adaptations and Operational Challenges
Financial technology firms will be expected to enhance their focus on operational excellence, cost management, and automation to stabilise their balance sheets. Those who can effectively implement these strategies while maintaining a lead in innovation, product differentiation and market expansion.
#5 Rising Importance of Account-to-Account (A2A) Technologies
Johann highlighted the growing relevance of A2A technology, which bypasses traditional payment rails and card networks, leveraging innovations in the open banking space. This development is expected to garner significant attention and investment, reshaping how transactions are processes and potentially reducing costs for end-users.
#6 End Market Dynamics and the Role of RegTech
With regulatory demands increasing, RegTech solutions that enhance compliance processes are becoming crucial. These technologies will likely see a surge in adoption as firms strive to meet complex and evolving regulatory requirements efficiently.
Interested in speaking to our experts?
Johann Kerhousse
FinBlue Partners