14th March 2024, London: The Payments Innovation Jury today releases its 2024 global report “Market meltdown – impacts on infrastructure, regulation and innovation”, which reveals global payment leaders’ views on how tumultuous macroeconomic changes over the past two years have affected their sector – for better and worse.
With research undertaken in collaboration with World Bank and supported by Interswitch, FIME and HPS, the 2024 Payments Innovation Jury is the most diverse in its 16-year history. 136 Jurors from all over the world participated in the research, all in senior roles at national payments companies, banks, fintechs, payments policy bodies, central banks and investors. This year, the number of central bank & regulators and investors each increased by 25%, enabling an even more representative picture of the challenges and opportunities ahead. The Jury was also delighted to welcome several Jury members from South and Central America for the first time, making the insights gathered truly global.
Importantly, it is a foundational practice of the Payments Innovation Jury that all members participate on an anonymous basis, as this allows them to speak freely – unencumbered by the commercial priorities of their current organisation.
The report offers insight into many aspects of the payments industry that were impacted by the recent period of market turmoil.
Key findings include:
- The primary reason for previously high payment company valuations and funding rounds was investors bidding up deal prices and paying insufficient attention to profitability – a view shared by the investors canvassed.
- The above has led to a greater focus on earlier profitability over hyper-growth, which the Jury overwhelmingly regard as a positive for the industry – although there’s a lack of consensus on whether this is a long-term market movement
- Businesses developing AI and climate fintech tools and technologies will benefit from the diversion of investment from payments businesses.
- In emerging markets where cards have not yet gained a significant foothold, they will struggle to gain cut through when competing with account-to-account payments and mobile money.
- Credit and debit cards will be hard to dislodge from their leadership role in developed markets, but growth will be much harder to achieve than previously.
- Banks, rather than fintechs or mobile network providers, will ultimately be the major players in mobile wallets globally.
- The talent acquisition activities of payment enterprises in developed markets are a significant challenge for those in emerging markets, with almost 60% of Jury members in emerging markets saying that they are losing an unacceptable number of staff with consequential risks to innovation programmes and sometimes even ongoing operations.
- High-profile crypto exchanges failures, such as FTX in the US, can impact confidence in global markets – not just where the failures occurred. This is clearly a concern for national regulators but remains complex to address.
- APAC retains its crown as the region with the most payment innovations, but perhaps more surprisingly, Africa & the Middle East was a clear second favourite despite Africa’s macro-economic challenges, relatively low levels of investment funding and now a talent drain – a clear tribute to the resourcefulness of the continent’s entrepreneurs and policy makers.
John Chaplin, Founder and Chairman of the Payments Innovation Jury, comments: “Looking back on the last two years of market turmoil, it feels like this unique insight from industry leaders has never been more needed. Our Jurors’ deep understanding of the causes and effects of macroeconomic changes and their impact on the long-term direction of the payments industry helps all of us understand how we can best move forward and continue to weather the storm
“I am immensely grateful to each of the 136 members of the Jury for thinking through such complex issues and sharing their views, as well as to the World Bank, Interswitch, FIME and HPS. Their participation and support makes the publication of these insights possible, and this report is very much their report.”
