Fintech focus: EU MD of BlueSnap talks 2023 trends

Nikhita Hyett is the EU MD of BlueSnap, a global payment technology company BlueSnap, the all-in-one payment platform designed to increase sales and reduce costs for B2B and B2C companies. She has extensive experience and expertise in the retail and payments industries from prior positions at both payment provider Adyen and retail technology company Global Blue, where she worked directly with strategic partnerships and customers. We caught up with her to find out more. 

What new trends will we see emerge over the next 12 months?

There are two trends we’ll be keeping a close eye on in 2023, namely, embedded payments and strong customer authentication. 

The first is Embedded payments - which will eat B2B software platforms, as they look to diversify their revenue streams and improve customer retention. With a low market penetration of 15% in B2C transactions and 3% in B2B, we predict exponential growth in the embedded payments sector unlocking the real embedded finance opportunity.

With the current push and pull between improving conversion rates and reducing fraud, strong customer authentication (SCA) will grow beyond Europe into North America. With 3-D Secure proving popular with merchants in Europe, as it has helped to reduce interchange fees and shift fraud liability to the acquiring bank, we can expect it to further proliferate across the pond. We’ve seen this happen with embedded smart chips and PIN authentication in the past and expect history to repeat itself. However, for it to flourish in 2023, enablers such as EMVCo must show that false declines don’t rise in parallel. 

Where do you see embedded finance development by 2030? 

In 10 years' time, we will see embedded finance at the forefront of fintech services. Embedded payments - which enable businesses to process their own payments - will drive this widespread adoption, as it represents the largest piece of the embedded finance pie. In an increasingly competitive software market, SaaS vendors are looking to capture new revenue streams, and help their merchants do the same by monetising their payments. As more businesses adopt embedded payments solutions, and consumers become used to the seamless checkout experience, demand will increasingly become intertwined with this combination of superior convenience, personalisation, and cost.

What will the future of BNPL look like? 

With regulation around delinquency protection on the horizon, financial institutions that specialise in BNPL compliance will reach more consumers. To date, the easy accessibility and low-interest rates of this short-term lending option have meant young shoppers are finding themselves in more debt - cultivating a negative reputation for the sector. The recent amendment to the Consumer Credit Directive, aimed at improving the assessment around online debt repayment and fairer credit advertising, shows that this reputation can’t be explained away as one bad apple but rather indicative of a widespread problem.

As such, BNPL compliance has the ability to rebrand the industry from a debt trap to a useful tool during tough financial times. By shifting the focus from traction to protection through fairer and more digestible consumer contracts and stronger credit checks, financial institutions can start to rebuild consumer trust and confidence. In the lead up to 2030, we’ll also see both traditional banks and fintechs look to invest or acquire in this space to ensure they have a competitive advantage when it comes to compliance. 

When it comes to BNPL for business to business, we won’t see a dominant player for the next three to five years. As B2B payments are processed through local financial institutions, which lack the technological infrastructure to process international transactions, there are still inroads that need to be made in B2B payment innovation. Paytechs, which provide the technology to allow businesses to pay through global payments networks, will push the trend of B2B use cases - but only through a more significant deployment of paytech can we see this trend become widely adopted.