6 things in fintech and payments news in 2023

Here’s what grabbed headlines from our “Last week, today” fintech and payments news roundups for the year:

1. Generative AI makes quite an entrance: Generative AI seemed to come in like a lion in 2023. What can it do for payments? Early use cases include fraud prevention and customer service.

Good read. Does Sam Altman Know What He’s Creating? - The Atlantic

What’s ahead? In 2024, new regulation in Europe may inform how other countries approach regulating generative AI. In the US, expect guidelines and best practices on AI systems from the National Institute of Standards and Technology (NIST) as required by a Biden administration Executive Order on Safe, Secure and Trustworthy Artificial Intelligence.

2. Tougher payment security in focus: Secure credit card processing gets a boost with PCI DSS v4.0 – the gold standard other payment security-focused organizations and standards look to for guidance. Flywire’s leadership in this regard was on display this year as CTO David King, one of the original architects of PCI compliance, and CISO Barbara Cousins were appointed to the PCI Board of Advisors.

Good read. Pokemon Playing Fish Commit Credit Cod Fraud - Finextra

What’s ahead? Cyber/information security will be the top technology category for increased investment, according to 2024 Gartner CIO and Technology Executive Survey, 2024.

3. U.S. debuts instant payment rails with FedNow; real-time payments’ adoption gets stronger globally: Globally, real-time payment methods are gaining maturity. India’s Unified Payments Interface now has 260 million users, Forbes reports, roughly 19% of its 1.4 billion people. The Federal Reserve’s debut of FedNow could take several years to gain mass adoption, but holds great promise.

Good read. The global state of real-time payments - FinTech Nexus

What’s ahead? US financial leaders may take a measured approach to real-time payments, waiting for infrastructure and weighing the cost.

4. Strong year for cross-border payments, evidence of globalization’s persistence and resilience: “Payments revenues grew at 11 percent in 2022—a double-digit rate for the second consecutive year—reaching more than $2.2 trillion, an all-time high,” according to McKinsey’s 2023 Global Payments report. While B2B payments led the way, desire for international travel and international education experiences contributed to cross-border payments growth.

Good read. 2023 In Cross-Border Payments: A Strong Response To A Challenging Year - Forbes

What’s ahead? More news on the G20 Roadmap for Enhancing Cross-Border Payments – and the four targets for cross-border payments to meet by 2027: limiting cost, improving speed, boosting access and increasing transparency.

5. Cash is not king: “Cash usage declined by nearly four percentage points globally in 2022, according to McKinsey’s 2023 Global Payments report – while demand for instant payments and digital wallets continues to climb. We saw that in our survey of international higher education students – where use of cash is high, students want options to pay tuition using local, digital payment methods. Students in Mexico and Peru, for instance, want to use PayPal, and students in China prefer AliPay.

What’s ahead? Growth in instant payments and digital wallets across the globe, but especially in cash-heavy, developing economies, according to McKinsey.

6. CFPB issues proposed open banking rule. In a move that is widely expected to advance open banking in the U.S., the CFPB proposed an open-banking rule in October, with finalization expected in 2024.

Good read. Can Open Banking really reshape and rejuvenate financial use cases? - TearSheet

What’s next? Clarity on rules is expected to jumpstart open banking in the U.S. Tearsheet writes that “Banks in the US are poised to take advantage of regulatory clarity on the subject, with 17% saying they are willing to provide open data access through third parties and 48% showing interest in working with select third-parties for increasing data access.”