• Alexander von Schirmeister, Executive Vice President for Europe at SumUp


• 28.12.2020 01:05 pm

What can we expect in general for the fintech industry in 2021 (what will be trending in Europe / key markets)?

Next year we should expect continued growth all around as consumer behaviours keep demanding better and more innovative products. The general acceleration towards online (which was particularly accelerated by the 2020 pandemic) will continue, and fintech will be a natural beneficiary of that trend.

The push from regulators to go cashless will speed ahead, with Italy as a forerunner, and we’re certain to see the continued closure of branch banks in small towns across Europe, eliminating easy access to cash. Concurrently, we’re likely to see a wider variety of mobile payment solutions, in addition to new ways of paying via QR codes.

Within the fintech industry by and large, we also expect some consolidation. This may be in the form of larger players acquiring smaller players, or as national champions merge to create bigger regional players. We’re sure to see some of the larger legacy banks go shopping among the fintech scene in order to introduce innovation into their offerings.

An important trend of “rebundling” will also continue to reshape our industry in 2021. Until fairly recently, fintechs used to focus on narrow product categories in which they excelled, for example, in lending, current accounts, payments, etc., where they essentially unbundled a wider range of financial services traditionally offered by banks. Customers will surely continue to look for one-stop-shop solutions with transparent pricing, so fintechs that have reached a certain scale will follow the reverse trend of rebundling (by going broader in product categories) in order to drive greater revenues.

Can you share any thoughts on fiscalization and what will be happening here next year (IT/DE only?)

I think what we have seen in terms of fiscalisation in IT and DE is only the beginning of a broader shift from a number of governments to become more in control of their economies, and introducing either legislation or incentives to ensure the entire economic activity in their markets gets captured. I suspect we will see other European countries start following suit.

What technology/technologies do you recommend fintech should prioritize in the coming months in order to optimize digital/customer experience?

I do think there is a general question mark as to whether 2020 was finally the year when the QR code went mainstream in Europe, and will start emulating some of the use cases we see in Asia. I think it’s also fair to say that the 2020 pandemic gave a serious boost to contactless payment technology, which is why I believe we will see further NFC-enabled payment trends (e.g., wearable payment devices such as watches and even rings).

‘Request to Pay’ is an interesting, yet nascent technology that could spur new payment methods, mainly in the ecommerce space. And finally, face ID identification, and Apple Pay and Google Pay will continue their rapid penetration.

What role will technology, machine learning and AI play in financial services in 2021 and beyond? What exactly?

I think the biggest role they will play will not be consumer-facing, but instead internally, in regard to risk assessment, credit scoring, etc. We will see significant inroads of technology, data and AI, but I believe most of it will be in empowering and improving fintech solutions, rather than being something the end-consumer experiences themselves.

What’s happening with PSD2?

Acquirers and issuers still need to work on making the experience of strong customer authentication smoother in order to get net positive value, where benefits from reduced fraud will outweigh lost revenues for the merchants. Having frictionless user experience is especially crucial now, when lots of people are moving to online payments due to lockdowns. 

Allowing for open banking APIs and connectivity to customer details and financials will also ensure a more compliant and efficient merchant onboarding process for SumUp, so we can see PSD2 providing a number of beneficial, strategic shifts for us as a company.

How will these and other digital trends impact human work/skillset and/or the payment landscape in general?

It will be interesting to see how the combination of new digital trends play out in the aftermath of the pandemic. One could argue that the gig economy will continue to explode, as more people are out of stable-paying jobs and looking for ways to innovate.

Delivery, fulfilment, logistics are interesting sectors, as people increasingly rely on ecommerce to have everything delivered to them. Hopefully, this will not only benefit the very large global ecommerce players, but also the local shops and retailers who will learn to adapt to this new way of life.

Do you have a favourite fintech startup that you think people should watch out for?

• Fraugster (https://www.fraugster.com) - the AI-driven payment risk engine that eliminates fraud and maximizes revenues for e-commerce businesses
• Oura Ring (https://ouraring.com) - the smart ring company which measures and tracks various body signals to provide sleep and health monitoring diagnostics.
• K Ring (https://mykring.com/en/) - a very simple contactless payment ring which, once you own one, you never leave the house without.

What’s the most essential learning for fintechs from the past months during the pandemic that will essentially have a long-term impact on how Fintechs are operating (react quick, adjust in a timely manner etc.)?

The speed with which customer and consumer behaviours have changed and adapted - probably permanently - is quite simply mind-boggling. Only the very nimblest of companies would have been able to adjust and adapt that quickly. So, whatever you do going forward, stay very light-footed, keep innovating, and react fast.

Fintechs also need to think twice before focusing on a particular niche of a market and instead consider diversifying their revenue streams in the long run, so as to prevent becoming overly dependent on specific market segments or products.

What’s the most unexpected innovation (in a good or bad way) you’ve seen during the pandemic (so far)?

Among the many examples I can think of, I think huge credit has to be given to schools and universities in the way they (mostly) managed to pivot to online learning this year. I believe education will see permanent shifts as a result of what has happened in 2020.

What is SumUp’s strategy for the next 12 months to further support small businesses during the ongoing crisis, and beyond?

Our goal is to keep showing small merchants our steadfast support and commitment, and to keep innovating with more and better products for them. We want to build upon the solutions we rolled out this year, such as mobile payments, ecommerce and invoicing products, to make sure that our merchants are equipped for the year ahead.