What is the future of payments within the evolving world of fintech? At the recent Fintech Nation event in Dublin, a lot was said on two particular acronyms, API and PSD2, which will play a crucial role in the years to come.
One of the panel discussions at the event focused on payments, which is perhaps the one area of fintech that the average person on the street is going to interact with on a daily basis, through contactless payments or, in some countries, mobile payments like Apple Pay.
But behind the scenes, software developers in start-ups and SMEs are busy developing open-source software for financial institutions to use, with the ability to tweak it to their own design using APIs.
‘Banks are at a crossroads’
This is of particular importance, at least according to Visa Europe’s relationship manager, Jonathan Forde.
“From a Visa Europe perspective, we’ve opened up our developer platform, which is opening up our network as a platform of services, allowing people to build in our payments network into what they’re developing,” he said.
Equally crucial, it seems, is the EU’s Directive on Payment Services 2 (PSD2), which was enacted in 2013, which created an equal playing field for payment service providers, as well as emerging start-ups looking to move into payments.
“I think that banks are at a crossroads of where they want to go from here,” said Owen O’Byrne, head of product at Fire Financial Services.
“It’s a choice of whether they want to be just a store of money, which will make them money and that’s not a problem, but I don’t think that’s the best way to go as you’ll be an unknown entity in the person’s life.”