For the last few years, if you wanted to know what the next big thing in payments was likely to be, your best bet was to look at Asia. The region – and in particular large, fast-growing economies such as China – has proved to be a fertile breeding ground for innovation for the sector.
But a new report suggests that – while Asia is still leading the way in this regard – Europe is catching up. This is among the findings of the Global Payments Innovation Jury, which noted that Europe has overtaken Africa, North America and Latin America to come second in the innovation table for the first time in nine years.
John Chaplin, chairman of the Global Payments Innovation Jury, said: “While Europe has never been rated favorably for payments innovation in the past, the 2017 Jury sees real grounds for optimism.”
One of the key reasons for this is a much more positive regulatory environment, which is now working to stimulate payment innovation rather than stifle it. Mr Chaplin stated that the more progressive regulatory environment has helped turn the likes of London and Berlin into world-leading hotspots for innovation in the payments market, while consumers in the region are also more willing to “give new financial service providers a go”.
Three-quarters of the Jury agreed that APIs will play an increasingly important role in the payments market over the next three years, and this is an area that Europe is looking to address as part of cross-border regulations such as PSD2.
“Payments are often a source of friction and that means lost sales for retailers and frustrated customers,” Mr Chaplin added. “Using APIs, it is much easier to integrate payments into apps so that transactions become almost automatic.”