Paris Fintech Forum 2019 – back to basics, or how to reinvent global payments

This year’s Paris Fintech Forum stirred the spirits of all its enthusiastic attendees, notably surpassing its past records on this 4th edition. At the very end of January 2019, the Palais Brogniart – a fitting place for such an event, as a XIXth century stock exchange, now an ornate architectural delight for the neoclassical nostalgics – accomodated more than 2,700 attendees, +150 exhibitors, along with conferences, panels, and discussions to spare.

According to the organizers themselves, Altéir Consulting, numerous panels were held over the course of two days, counting, among other panellists, Christine Lagarde, Managing director of the International Monetary Fund, Carlos Torres Villa, Group Executive Chairman of BBVA, the finance ministers of 4 European countries, or the duo panel gathering Brad Garlinghouse, CEO of Ripple and Gottfried Liebbrandt CEO of Swift.

The event focused on themes surrounding digital tranformation in financial technology, banking needs in Europe, financial inclusion, the evolution of challengers and fintech startups, AI and cloud technology, cryptocurrency and where blockchain is heading as a disruptive force, the most important steps taken towards innovation in payments, cybersecurity and fraud, and the future of insurtech and regtech among many others.

There was a number of topics that buzzed in our years and we made it our mission to dig deep and come back with a hefty collection of trends and opinions that we felt were floating in the air during almost every conversation.

Putting the customer back in ”customer experience”

One of the most ubiquitous topics that we felt were tackled both inside and outside the panel auditoriums during this edition of the Paris Fintech Forum was definitely re-placing the end-user, albeit within a B2B or a B2C paradigm, back in the center of attention.

As Wim de Waele, CEO of B-hive pointed out, ”all the financial companies and initiatives exist to support real businesses, the end consumers. People think of ecommerce and finance as a world of its own, the so-called finance industry. The finance industry is supporting infrastructure for other businesses. And as that infrastructure is becoming digitised, a lot of businesses take charge and develop their own technology.”
This is where tech can become a tool in order for SMEs and end-users to be granted a lot of new liberties and decision-making options. Companies such as Moneyou (enabling people to handle their own financial needs with confidence and independency), Holvi (working with microbusinesses to digitise accounts payable and accounts receivable), Traxpay (focusing on redefining the insurance payments experience in the automotive rental industry) or Wirecard (experimenting with monitoring the shopping basket to get the freshest data in order to improve how merchants tailor their offers to customer needs) were just some handpicked examples of a narative ultimately heading towards the same conclusion: true progress in innovation when it comes to payments and financial technology will ultimately be obtained by looking back at all the ways in which fintechs can make the payments process simpler and more embedded in the day-to-day routine of its clients.

As Sussane Steidl, CPO of Wirecard pointed out, we need to focus beyond the end-to-end payment process and more on what eases the life of a user. If we think of normal mobility on a day-to-day basis, people may like to pay for a package for their daily travels that would allow them to change between a rental bike and a train ticket, and get that all in one. Those things should make payments companies think beyond just a normal transaction process and have the potential of changing the way we live and work.
Simple enough, in theory.

The recipe for success in payments: Innovation, regulation and a sprinkle of loyalty

PSD2 will have a great impact on online banking, was a thought brought forth by Liesbeth Rigter, CEO at Moneyou. “For example, normally you can have a joint account or a single account. But you cannot have a family account, or part of your account for your company and then another one for your family. One of today’s realities is combined families and needing to have an insight to your finances with your ex-partner for your children. For every specific situation, there is a need for a different account and customers often cannot have it within the same bank because you are confronted with the fact that «you already have an account»”. Companies such as Moneyou look at regulations such as PSD2 as an opportunity for fintechs and PSPs to leverage banking data in order to enhance their products for the benefit of the end-user.

Furthermore, Jason Gartner from Marqeta quoted a report from Edgar, Dunn & Company stating that there is a USD 60 trillion issuing process opportunity around that world and Asia is a market with a sometimes untapped potential when it comes to innovation in payments. In places like Vietnam, 7% of the population is banked, 3% are carrying credit cards, and Visa and Mastercard have basically become utilities, Gartner says. The two card issuers have connected every merchant around the world, online or offline. Building these card products, from an issuing and processing perspective, brings the consumer or the business into the ecosystem, and there is a need for POS technologies to enhance that. There is going to be continuing innovation happening at the point-of-sale. The infrastructure is there, and a lot of companies that are being built today, whether it’s Uber, GoCheck or others, they are all being driven off by the acquirer – the money in – the consumer paying for the ride, and the money-out, which is the issuing and processing. Balancing the scale to the customer’s advantage, while making a profit, seems to be a matter of having the most viable technology, but also being as in-tune as you can with each country’s regulatory framework.

Regulations such as GDPR favours the big companies. Because you want to be part of Facebook, WeChat and the rest, you will be accepting the terms and conditions, whereas for the minimerchants, it’s really a matter of concern about whether their data is indeed safe or not. So in that sector, companies such as Wirecard or SumUp indicated that there is a need for some adjustments in GDPR because those small businesses require a better grasp of what happens to their data. This is another place, it seems, where consumers will drive change, especially when educating the public about regulation will come paired with good loyalty strategies.

The clash of the cross-border payments titans – Ripple vs Swift

You cannot talk about this year’s edition of Paris Fintech Forum without touching upon the elegant, witty duel between two of the major global players when it comes to streamlining the cross-border payments process. During the “Let’s Send the Money” panel, tensions rose, as the future of payments took the form of constructive competition.

While Gottfried Leibbrandt laid out the scene for the benefits brought forth by the new Swift platform, “bank-centric, deep liquidity, with all the controls that banks have built around KYC, sanctions screening, and the whole of the compliance controls that go with it”, Brad Garlinghouse of Ripple went as far as to compare the two payment players with the competition between Amazon and Walmart in the mid-1990s, not shying away from using a David and Goliath metaphor.

Garlinghouse continued to build on the argument that, while Swift’s efforts with its GPI platform are to be praised for its intent, what Ripple is doing for seamless, frictionless payments is paving the road for the paradigm shifts the “same way as we’ve introduced new technologies like TCP/IP and HTTP that became the internet of information. I think the future we see is certainly one of many networks, interoperable networks, reducing the friction of payments to close to zero and I think we are going to see a lot of innovation apart from Ripple.”

Blockchain came up, as well as the optimum ways to leverage the XRP coin within a regulated payments environment, how GPI could offer better integration with APIs, and how, as payment transactions take place at a faster pace, currency volatility will stop being an issue in the future. It was a sight to be reckoned with, but a thrilling experience to watch, as one seldom gets such a palpable experience of how competition has the potential of driving innovation, for the benefit of the financial environment, ultimately.

Final thoughts

As the dust settled on this year’s edition of Paris Fintech Forum, one idea seems to delineate itself from all the theories, product demos, spirited debates, and buoyant predictions for the future of payments: any technological innovation, regulatory framework, or platform model that fintechs, banks, or PSPs come forward with has to – first and foremost – embed itself, as seamlessly as possible, in the life of the end consumer.

About Alexandra Constantinovici

Alexandra is a Content Editor at The Paypers, specialising in B2B payments and fintech, as well as lending, e-procurement, e-billing, supply chain finance, e-invoicing and accounts payable automation. A passionate writer, Alexandra has an extensive background in journalism – as a graduate of Journalism and Communication studies –, as well as editing, publishing, and marketing. Together with the team of editors, she strives to bring forward the latest trends for our readers, while investigating and sharing with our community the upcoming innovative industry shifts.