Money 2020 Europe: Good Ideas, Great People, Gorgeous Venue

We attended the Money2020 Europe conference in Copenhagen a couple weeks ago. This was the first Money2020 conference outside of the epic assembly of payments geeks in Las Vegas, and it was a great first effort. People were universally pleased with the venue, a conference center near the airport, and there was ample opportunity to network. Unlike in Las Vegas, it was fairly easy to find people and have good conversations.

The crowd was friendly, and the vibe was easygoing and enthusiastic. And there was a lot to talk about for us payment geeks, as reliable sources told us that 40% of all fintech activity is related to payments. Here are a few of the topics and ideas that resonated with us at the show.

• PSD2: The EU’s Payment Services Directive 2.0 was the talk of the town in Copenhagen. That may surprise some readers; was Money2020 not all about innovation and cool fintech stuff? Well, the more mundane parts of the directive, like capping interchange fees and further enhancing consumer protection, were more or less taken for granted. These regulations will cost banks money—business as usual. However, the buzz centered around the newly introduced category of “third-party providers” (TPP). Examples of such companies are providers of accounting software or e-payment solutions. PSD2 obliges banks to open up customer account information for TPPs (account information services) and facilitate third-party payments from their customers’ accounts (payment initiation services) when the customer demands they do so. Banks need to work on APIs to provide standardized access to their legacy ledger systems, which looks like a formidable task.
  Fortunately, there is still some time. The directive is currently translated into national law by the EU member states, a task that should be finished by the end of 2017. But additional work is underway by the European Banking Authority to publish the required security standards, which will take us well into 2018.  
  It was clear at Money2020 that banks and their fintech partners realize that just being compliant with the law will be a sure loss-maker. Many ideas were discussed: Should banks become data aggregators themselves? Should banks open up even more to provide data outside the payments domain, creating new revenue models? If the PSD2 continues to play out like this, It looks like the regulator is on track to deliver on one of its objectives, which is to foster innovation. 
• TransferTo: The cross-border remittance market is huge and growing, and customers are looking for convenient, fast, and cost-efficient ways to transfer money home. TransferTo (majority owned by Ingenico) is building a network by interconnecting FI and operator-issued digital wallets across the globe. This network can be used by foreign workers to send both airtime and money home to their friends and relatives electronically.
• Verifone Carbon: Verifone announced a new POS platform, Carbon, which combines a customer-facing screen and a merchant-facing tablet into an elegant device that can work either as a handheld mobile point of sale (MPOS) or countertop device. The cool part is that the merchant tablet is on Android while the consumer-facing component uses Verifone’s secure payment technology. Lots of opportunity for new applications from developers without risking transaction integrity.
• Amazon’s partner program: Amazon is offering the “Pay With Amazon” button to third-party online and mobile commerce service providers, like Shopify and PrestaShop. This move will quickly increase Amazon’s distribution capabilities, accelerate adoption across the web, and enhance the Pay With Amazon brand. 
• OmnyPay: Two payment heavyweights, Bill Melton and Mohammad Khan, are behind this new mobile wallet venture. It’s a white-label offering targeting major retailers, providing the ability to integrate with the retailer’s own loyalty and promotion schemes and customer relationship management (CRM) platform. The initial execution is optically based, but it will also be NFC-capable. 
• Yandex.Money: It was impressive to hear that about 50% of Russian online shoppers buy cross-border, predominantly on Chinese sites. Yandex Money seems well-positioned to deliver the accompanying digital payment services, seducing average Russians away from their beloved cash. 
• Fraud  and identity management: We saw some really innovative solutions (like from New York-based Socure) to combine machine learning and data analytics from several sources (both public and private) to check a digital identity and monitor user behavior in real time. Also, biometrics applications appear to have become quite sophisticated. It was explained to us, for instance, that software is able to distinguish between a real human face and a picture by detecting the flow of blood through the tiny veins under the skin.

Overall, it was a great event for the payment space, and with 3,000 attendees at the first event, we expect it to grow quickly over the next few years.  

Co-authored by Thad Peterson and Ron van Wezel