Fintech Innovations like Open Banking, CBDCs, Stablecoins, Instant Payments Are Transforming Financial Services Sector: Report

Juniper Research specializes in identifying and appraising new high-growth market
sectors within the digital ecosystem.

They provide market research covering 90 technology markets. Their research reports form the basis on which their analysts make various predictions.

As noted in an update shared by Juniper Research, the POS (Point-of-Sale) market has “evolved greatly since the first POS systems were introduced back in the 1970s.”

The earliest systems had “to connect to a mainframe to process transactions and were more akin to being a screen interface than a true POS system.”

Today, hardware-based POS systems “come in a variety of shapes and sizes, whilst recent developments haves seen the arrival of Soft POS (Software POS) solutions, each designed to fit a specific use case.”

Considering that POS is intrinsically twinned with payment transactions, it is natural that POS systems are “reflective of the ways in which payments are conducted.” The forms of POS that best facilitate the contemporary and majority means of payments will “emerge as the market-leading solutions,” according to Juniper Research.

As noted in the report from Juniper:

“As POS has such a broad range of applications, given the variety of forms of retail, POS solutions have diversified to accommodate the different needs of various types of retailers. Traditionally, Soft POS has been limited to devices running on Android OS. However, the recent announcement from Apple that it has developed a Soft POS solution, ‘Tap to Pay’, will open up the capability to third-party vendors in iOS as well.”

The ability to transform any particular mobile device “into a Soft POS device means that merchants are able to circumnavigate the need to purchase a bespoke POS terminal, thus limiting their costs exclusively to software.”

As mentioned in the report from Juniper, instant payments, “also called real-time payments, are a form of electronic payment that is available 24/7/365 and the payment is processed, and funds made available to the recipient instantly.”

However, there is “not a singularly accepted definition of instant payments with differing definitions on how quickly a payment must be processed to qualify as instant.”

The report added:

“Juniper Research defines an instant payment as: ‘Any payment scheme where funds are capable of being received in 10 seconds or under, outside card networks, and confirmation of the payment to the parties are available in one minute maximum.’”

Payments are in “a constant state of development, but the current market has seen
the possibilities for payment types accelerate beyond what many in the market

To date, blockchain has “had a mixed impact across payments and banking, but the rise of stablecoins and CBDCs threatens to accelerate this impact significantly.”

Stablecoins and CBDCs “are two ways of solving the same problem – how do you offer
a better digitally-native payments solution?”

Most existing payment types “have been designed around traditional systems intended for in-person or telephone payments, such as credit cards, or even cash.”

Stablecoins and CBDCs are “showing what can happen if a system is designed from the ground up as digital.”

However, when any payment’s system is “changing to the same extent CBDCs and stablecoins are threatening to, there are many implications of this.”

This report will “explore the implications of changes to the fundamental payment models that are used today, what the drivers of this change are, and what we expect to see in future.”

As noted in the update:

“The Open Banking market has matured in the UK and European markets, primarily owing to regulatory interventions and fintech enthusiasm to implement Open Banking practices. Open Banking initiatives have accelerated in recent years, with regards to enhancing the customer experience and reducing the cost-to-serve for legacy banks.”

Juniper Research defines Open Banking as:

“The practice of sharing, and to an extent control, personal financial information between FIs (Financial Institutions) and TPPs (Third-party Providers), mostly in the form of fintech developers, subject to customer consent via the use of APIs (Application Programming Interfaces).”

Open Banking has been “revolutionary for TPPs; helping them extend the scope of their offerings beyond just banking and into other areas with enhanced capabilities.”

Open Banking is also “advantageous for banks, despite the perceived loss of custodianship over their data, by providing greater accessibility to banking services.” The report concluded that Open Banking has shown that it can “help serve big tech, with these companies able to leverage the technology to create tailored services according customers’ preferences and/or economic limitations; converting themselves into smaller-scale FI-like organizations.”

Register Now
Sponsored Links by DQ Promote



Send this to a friend