The latest edition of Oaklen Consulting's Industry Watch analyzed various studies and surveys highlighting the immediacy and universality of all retail payments.
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The latest edition of Oaklen Consulting's Industry Watch analyzed various studies and surveys highlighting the immediacy and universality of all retail payments.
A draft European regulation plans to impose market conditions during 2023 so that instant transfers can supplant credit transfers. It includes four key points:
- The obligation to send and receive instantaneous transfers
- The obligation to apply the same billing conditions to the instantaneous transfer as to the transfer
- The obligation to offer the payer a service to verify the consistency between the IBAN and the name of the beneficiary of an instant transfer
- The obligation to check once a day, and not at each transaction, that its clients (payer, payee) are not subject to European sanctions in the fight against money laundering and terrorist financing
These obligations apply to payment service providers (PSPs) for transactions in euros. The timetable for implementation ranges from 6 to 36 months, depending on whether a transfer is sent or received and whether the PSP is located in the euro zone.
It should also be noted that this obligation does not apply to payment institutions (PEs) or electronic money institutions (EMIs) because they cannot have direct access to clearing systems (Clearing and Settlement Mechanism CSM).
After analyzing the payment habits of individuals, the European Central Bank surveyed more than 10,000 companies in the euro zone at the end of 2021 to find out their cash usage. The results show that there are very significant differences in usage between countries:
- 100% of companies accept cash in Cyprus and only 90% in the Netherlands;
- Cash-back is possible in 59% of companies in Belgium but not in Portugal;
- 79% of companies pay their suppliers in cash in Austria and only 4% in France;
- In Germany, 73% of companies make their cash deposit on an ATM, while in Greece, 83% do so in their bank branch.
It also shows a very strong resilience of the species:
- Less than 5% of businesses that accept cash plan to stop accepting it in 1-10 years;
- Businesses make far more cash deposits (85%) than withdrawals (28%);
- 80% of businesses that make cash withdrawals use it to make change.
A working paper from the Banque de France analyzes the use of coins and banknotes issued by the Banque de France between 2002 and 2019 :
- Although the share of cash in payment transactions is steadily decreasing, cash issuance has increased from 2% of GDP in 2002 to 6% in 2019;
- In 2019, only 15% of net issuance is used for payment transactions in France. 25% is used for hoarding in France. The rest is used outside France: 10 to 20% in other euro zone countries, and 40 to 50% outside the euro zone.
Based on a survey conducted in the UK in Q3 2022, Token anticipates that 64% of merchants are ready to convert the One-Click card payment to a recurring variable payment (PVR) subject to appropriate customer journey.
Token breaks down the types of transactions eligible for PVR into two main families:
- Automation of transfers between accounts of the same customer ("sweeping"): savings, reduction of overdrafts, reimbursement, etc.
- Automation of product or service payment: invoice payment, one click ecommerce, subscription, etc.
The study notes, however, that today's Open Banking does not offer a sufficiently uniform framework for payers to have confidence in the use of PVRs. In this respect, the study highlights the interest of the future SPAA (SEPA Payment Account Access) scheme currently being developed by the EPC (European Payments Council).
In the United States, based on a survey conducted in December 2021 of the five major BNPL players on their day-to-day practices, the Consumer Financial Protection Bureau (CFPL) highlights the "harmful" effects of BNPL:
- An opacity on loan conditions: some clients being refused even though their borrowing capacity seems sufficient;
- Insufficient verification of borrowing capacity to be correlated with an overrepresentation of the 25/32 year old population;
- The presence of "hidden" interest with late fees in more than 10% of the files;
- The difficulty in filing and resolving disputes with the continuation of deductions despite the opening of a dispute;
- The shift towards a model of personal data collection inciting compulsive buying.
A decree and an order dated October 7, 2022 specify the dates and conditions of application between July 2024 and January 2026 of the obligation of electronic invoicing (B2B) and remote VAT declaration (B2B / B2C). The security requirements imposed on dematerialization platforms may present an opportunity for payment platforms already familiar with these security requirements to expand their business.
For more information and to obtain the complete watch do not hesitate to write to us: contacteznous@oaklen.eu
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