What Money 20/20 told us about Europe’s payment priorities - Trade Treasury Payments

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What Money 20/20 told us about Europe’s payment priorities

AI, stablecoins and embedded payments were the key topics under discussion in Amsterdam this year. The importance of collaboration across the payments ecosystem was a common thread throughout the conference.

Money 20/20 Europe is a useful barometer of the health of the European payments industry, in addition to providing insight into the debates that are shaping its future. The mood was buoyant in Amsterdam, encouraged by a plethora of new entrants in the space. Competition is intensifying, but so is cooperation. 

At its first iteration in 2016, Money 20/20 attendees in Copenhagen were mainly fintechs looking for investors and investors looking for the ‘next big thing’ to invest in. The event has matured over the past 10 years, going beyond its original base to attract participants from across the payments ecosystem, including large incumbent banks such as Citi, HSBC and JPMorgan, payment giants like Mastercard and Ant Group, retailers and merchants like IKEA and Booking.com, and big tech companies such as IBM and AWS.

Importantly, central banks and supervisors have also joined the discussion, including the Banque de France, European Central Bank and the UK’s Payment Systems Regulator (PSR). For the first time this year, Money 20/20 Europe hosted a policy summit, together with the Bank for International Settlements (BIS), bringing together around 60 private and public sector organisations. Clearly, regulation and innovation aren’t mutually exclusive.

AI, stablecoins and embedded payments stood out as hot topics among the almost 8,000 attendees in Amsterdam. As in preceding years, addressing the friction in cross-border transactions continued to dominate many discussions. However, there were much fewer discussions around a previous popular subject of buy now, pay later, most likely as a result of greater regulatory oversight as regulators step in to prevent unconstrained borrowing amid a cost-of-living crisis.

Broad partnerships

Collaboration across the whole payments ecosystem continues to be a common thread at Money 20/20 Europe. Panels throughout the event showcase different industry partnerships, particularly between incumbent players and fintechs but also involving regulators.   

One of the main aims of collaboration between the public and private sectors is to help navigate the balance between consumer protection and enabling innovation. For example, Oliver Hanmer, head of Supervision at the PSR, participated in a panel entitled ‘Creating an EU Payments Vision’ focusing on the alignment between the UK’s New Payments Vision (NPV) and the EU’s TARGET Instant Payment Settlement and the European Payments Initiative (EPI). Considered by many to be a positive step forward in the European payments landscape, the EPI is backed by 16 European banks and financial services companies and is working on plans to launch Wero, a new digital wallet. 

The panel stressed the importance of public-private partnerships and radical thinking to drive innovation and consumer protection. It also highlighted the need to address consumer trust, choice and governance for a new payment system to be successful.

One important but perhaps overlooked benefit of the UK’s NPV, in Hanmer’s view, is that it encourages government authorities, regulators and private industry to work together. “We are trying to create a broad regulatory framework that creates flexibility for the private industry to then innovate. We are putting guardrails in place without being prescriptive,” he said. 

Another panel, entitled ‘Upgrading Cross-border Payments: A Unified Ledger for a Fragmented World’, discussed the BIS’s Project Agorá, an initiative exploring how tokenisation can solve the challenges around wholesale cross-border payments, such as cost, speed, transparency, and access. 

Launched in April 2024, the project involves seven central banks and 43 financial institutions, financial market infrastructure players and card companies – totalling more than 500 people across seven time zones. 

The idea is to use a unified ledger to integrate central bank money, commercial bank money and tokenised assets, with the aim to perform all information checks and balance sheet updates simultaneously, thereby reducing costs and manual intervention. 

“It’s a common venue where all these different types of assets can interact in a more seamless way to eliminate some of the unnecessary frictions,” explained Priscilla Koo Wilkens, BIS senior economist. “Tokenised assets also unlock the ‘contingent performance of actions’, taking the benefits of distributed ledger technology platforms – such as programmability and composability – to allow more complex workflows to be brought together.”

As a private institution in the Agorá cohort, NatWest is focused on customer benefit and commercial viability, according to Lee McNabb, head of Group Payments Strategy at the UK bank. “We as a group need to understand where to place our bets in terms of people, time and money to deliver what’s best for our customers,” he said. “Additionally, there’s no point building an all singing, all dancing rail to take money around the world if each transaction is extremely expensive.”

Both McNabb and William Lovell, senior technology advisor at the Bank of England, pointed to the difficulty the project faces in harmonising not just the technology but the legal, regulatory, terminology, and governance frameworks. Echoing Hanmer’s point, Lovell emphasised the importance of building a cohort that understands how to deliver change at a global level.

“Through this project, we will have created a group of people who know how to collaborate at this scale, which is something we’ve never done before. Having created that level of knowledge and experience, we can then go on to conquer other challenges,” he said.

The BIS is set to issue an RFP this year to choose a technology partner for Project Agorá.

Stablecoin strategy

Unsurprisingly, most every panel touched on AI, whether it was the topic under discussion or not. Perhaps less expected is the increase in stablecoin panels at Money 20/20 Europe this year. Moreover, there was a lot of discussion about their role in the evolution of payment experiences and strategies on the conference floor, especially as the US Genius Act was about to be voted on in the senate.

The bill would require stablecoins to be fully backed by US dollars or similarly liquid assets and mandate annual audits for issuers with more than $50 billion in market capitalisation.

During the panel entitled ‘The next three to five years in payments – technology, risk, and innovation’, Gary Conroy, CEO, Transfermate, a business-to-business (B2B) payments technology company, said: “The real innovation is happening around the stablecoins that are US dollar pegged, such as USDT and USDC. If the US Genius Act gets over the line, effectively authorising a fiat asset-backed guaranteed one-to-one stablecoin, then I think programmable money backed by trust will prove to be a powerful development.”

He added: “Every company here should have an AI strategy and a stablecoin strategy. And if they don’t, they should come out of these three days with one.”

JC Rodriguez Inigo, senior director of Fintech Commercial at Booking.com, agreed that every company should have a strategy around stablecoins. “When thinking about marketplaces as international as we are, I believe we can solve a lot of [liquidity] issues with [stablecoin] strategies,” he said. 

In addition to stablecoins, the panel discussed embedded payments. Kara Parkey, head of Strategic Accounts at Coast, which helps companies showcase their APIs, commented on how to shift to digital and intent-driven engagement has redefined personalisation. 

“It’s no longer about local familiarity but is now about giving the customer exactly what they need when they need it, without them having to ask for it. Therefore, banks and financial institutions need to extend their products outside their ecosystem by embedding services and banking capabilities into vertical software platforms, such as ERPs and marketplaces,” she said. “It’s not about pulling the consumer into the bank’s world; instead, banks need to push their capabilities into the consumer’s world, wherever they are.” 

Transfermate’s aim is to bring the consumer experience of embedded payments to B2B users and has developed a simple API that enables embedded payments to go through in a seamless fashion.  

“We live in the world of APIs, and if you’re not API-first today, you will be,” Parkey added. “APIs are increasingly being treated as commercial products, meaning clear ownership, great documentation and thoughtful go-to-market strategies to drive adoption.” 

Sustainability needs attention

A topic that didn’t receive much attention this year is sustainability, perhaps due to the backlash coming out of the US. Only one session – ‘The Commercial Advantage of Sustainability: Turning ESG into Revenue, Resilience and Reputation’ – brought it to the forefront.

The panel discussed the integration of environmental, social and governance (ESG) principles into the payments sector, emphasising how it can drive commercial performance and act a lever for growth, as well as being essential for future-proofing the business.

Charlie Bronks, group head of sustainability at Crown Agents Bank (CAB), which provides wholesale foreign exchange and cross-border payment services in emerging markets, highlighted the bank’s journey to B Corp certification in 2023. She argued that organisations will soon be at a competitive disadvantage if they don’t embed ESG into their governance models. 

“The governance piece is critical, as is ensuring that sustainability is a priority among the stakeholders within your organisation,” she said. “When doing materiality assessments, ensure that this brings in everyone across your stakeholder base.”

Taking a “beyond compliance approach” has led CAB to collaborate with the Alliance for Innovative Regulation (AIR), an NGO that works with the public and private sector to enable the shift towards a fairer and more inclusive financial ecosystem.

Victoria Jory, strategic engagement lead at AIR, stressed the need for collaboration and transparency in regulatory innovation. In addition to assessing infrastructure, supervisory tools and consumer regulation, AIR runs tech sprints, or policy sprints, to solve “wicked problems” (complex, ill-defined social or policy problems that are difficult to solve because of their intricate and interconnected nature), such as climate change, financial inclusion or digital payment fraud. 

“We bring the whole ecosystem – academics, regulators, financial service providers, payment providers, etc – around the table for several days to develop solutions and then put them through an innovation accelerator. Within that process, the conversations have begun, which is the most important part,” explained Jory.

Collaboration is key to for turning ESG into a commercial advantage, according to Bronks. “To solve these ‘wicked problems’, the commercial piece has to be part of that discussion with regulators to find the right solution for the ecosystem as a whole,” she said.