Closed-loop payment systems are top of the alternative payment product wish list for payment professionals, with account-to-account payments at the point-of-sale running a close second, according to research by regulatory intelligence agency Vixio.
The 2022 Payments Compliance Outlook report is based on research conducted late last year with 113 (56 UK, 57 US) compliance professionals who work at fintech and payments firms with $10m+ in revenues. It found that 52 percent plan to launch a closed-loop payment product in 2022 and 61 percent will develop one by the end of 2023.
It also found that 45 percent plan to launch an A2A product for POS payments in 2022 and 53 percent will launch one by 2023.
In addition, a sizeable number are planning to launch e-wallets and digital currencies, with 41 percent of financial services and payment functions planning to focus on these products in the next two years.
Demand for alternative payment solutions is coming at a time when traditional card payments are under increasing scrutiny from regulators. The rise of Open Banking arrangements, supported by payment modernisation initiatives such as the proposed New Payments Architecture in the UK or the new FedNow instant payment service due to launch in 2023, is driving the trend.
Andrew Neeson, research director at Vixio, says: “Brands must innovate and chase growth opportunities in the face of a rapidly evolving regulatory landscape, and alternative payment solutions can play an important part of this. Firms are aware of the benefits of offering faster, efficient and frictionless user experiences that many alternative payment methods offer, and so are understandably keen to include them in their arsenal.”