Money 20/20 Europe 2024: Our Takeaways

Money 20/20 Europe this year was incredibly informative and productive as always, providing a hub for finding new contacts and catching up with regular contributors to Vixio’s editorial work, and below are just five of my top takeaways and and most-prevalent topics from the exhibitors, speakers and conversations at the event.

1) Artificial Intelligence

All anybody wanted to talk about was artificial intelligence (AI), but I got the feeling as well that people are keen to cut through, and get a better understanding of what is new and what has been around for a long time. People were reassured by the EU's AI Act, as it means they know where they can invest and where they shouldn’t both. Sentiment from some that the UK should hurry up and implement its own regulation, and that internationally, standards are important. For payments firms, use of AI appears to remain best for fighting fraud. Fraud detection tools are vital to payments and banking firms, but I also noticed some anxiety about how to tackle deepfakes. It seems like there is a worry among some that incoming liability rules in the UK and EU (via the Payment Systems Regulator and Payment Services Regulation) could be incredibly challenging for firms if they have to reimburse customers who have fallen victim to deepfakes.

2) EU payment champions

Everybody is cynical and divided over what should be the EU’s payment champion. Sovereignty is a key driver for the regulation that we report on from the EU, whether that be the Instant Payments Regulation (IPR), or the work on the digital euro. Regulators are highly ambitious for there to be an EU payment method with critical mass. Yet, we’re far away from it. The closest to it seems to be the European Payment Initiative, and I was surprised to find out that iDEAL (an A2A mobile payment method in the Netherlands that everyone uses) will even rebrand as ‘Wero’ (the official EPI name for its solution). The European Central Bank is really pushing this, but for now, it remains in only a few member states and also, the link with the digital euro seems to be uncertain. This could have a negative impact on clients whether through loss of market share, or through having to invest to be able to accept new payment rails such as the digital euro. I did also hear that the digital euro project could be paused or delayed though, due to lack of political support from members of the European Parliament.

3) The SEPA Payment Account Access (SPAA) scheme 

This scheme covers the set of rules, practices and standards that will allow the exchange of payment accounts related data and facilitates the initiation of payment transactions in the context of premium services. It was created and is now overseen by the European Payments Council. A problem so far with the scheme, which launched earlier this year, is that account servicing payment service providers, otherwise known as banks, are not joining, despite payment initiation service providers, such as TrueLayer, Token.io, and Tink, having joined. One thing I heard was that we could see the European Commission propose mandating SPAA. For now, fintech attendees told me they’d rather banks voluntarily joined and are not causing a fuss as to not spook them, but slow progress is becoming frustrating.

4) Commercial VRPs

Commercial VRPs again look like an area that could see more regulatory intervention from the Payment Systems Regulator. I see this as the UK’s version of payment sovereignty and slow movement, again from the banking industry, is frustrating fintechs and merchants. The PSR’s Kate Fitzgerald suggested that the regulator could make an intervention on pricing, however, she continued to stress she’d rather that this was a market-led adoption.

5) PSD3 and PSR

I heard from a variety of market players about their thoughts on the PSD3 and PSR so far. The changes to the Limited Network Exclusion (LNE) is an area that came up, as the use of this is being narrowed in the PSR which could end up hitting e-commerce firms who currently benefit from the provision. Open banking  was also mentioned in this context; the feeling among some is that the European Commission’s defined set of obstacles to open banking APIs will not be helpful and that banks will simply find a way round it. Whether screen scraping should be allowed to continue remains a wedge issue among fintechs, with some believing that the contingency measures in PSR that say that banks need to have their systems up for at least 98% of the year will mean that they could be negatively affected when systems are down (one person suggested that this number should be closer to 99.something). There was also a general feeling that screen scraping limitations could cause regulatory arbitrage with DORA, due to operational resilience issues if an API was to go down.

However, people I spoke to said that they think that the Commission is pushing for local regulators to be tougher on banks not complying with their open banking obligations. I heard whispers that banks are not going to be ready for the instant payment timelines, which will impact fintechs who need this for open banking. I also heard that verification of payee (VoP) has been a struggle to implement for some jurisdictions. Considering how ambitious the timelines are, and the fact that compliance with DORA is at the same time, I’m wondering whether the EU will cut some slack on this or whether banks will face flack, considering the political push for instant payments. Otherwise, a general acceptance that fraud is about to skyrocket and there isn’t much that can be done to prevent that. This appears to be because of what happened in the UK with Faster Payments. One attendee said government’s need to step in and provide more fraud education related to this.

Overall, it was a successful event for Team Vixio, and we’re looking forward to Vegas!

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