Fady Abdel-Nour, Global Head of Investments and M&A at PayU
2020 will go down in history as a pivotal time for the world of digital payments. In 2021, what may have until recently felt new, exciting and progressive will fast become the norm. And so it should.
Financial institutions, central banks, fintechs and payments providers have all had no option but to move operations online, quickly. Finding digital transformation is no longer a topic of discussion; digital is the new business operating model. Across the market we’re seeing how varying digital strategies are determining who’s thriving and who’s merely surviving. Now that the market has established a baseline for digital platforms, I believe we’ll see significant strides made in payments innovation.
As such, digital financial services are now mainstream – fact. Over the past year we saw them surge to fruition, driven by consumer demand. This presented a challenge to those both in the process of digital transformation, and those already transformed. It tested organisations on their abilities to scale at pace and the reliability of their technology. At PayU, we’ve always been a digital-first organisation but we still had to test our ability to serve the rise in demand for digital payments. I’m proud to say we met the challenge. For example, some of the e-shops we serve saw 500-1000% revenue growth in April and May compared to the same periods less than 12 months prior.
Robust technological infrastructure will undoubtedly become the standard moving forward. PayU recognises this, and as both a global fintech investor and a payments operator, our aim is to set the pace in high-growth markets, not just keep it. I’m certain this year we’ll see financial services players look to the next stage of innovation and growth. On top of this, one lesson I think we’ve learnt collectively is that change can happen much faster than previously envisaged. In learning this, the growth potential in high-growth markets becomes far more compelling to fintechs entering the market. As a result, in 2021 I expect we’ll see more Mergers & Acquisitions in unsaturated regions.
Something else I expect we’ll see within our markets this year is the roll out of central bank digital currencies (CBDCs). Digital currency more broadly will start to see real use cases emerge, and this is what I’m most excited about. The discussion around crypto has been going on for too long, with not enough appreciation for the immense potential it has for financial inclusion and global connectivity. The pace of innovation within this market has changed now though. Initiatives like Diem, for example, are showing how blockchain could democratise and decentralise money, taking us a considerable step closer to truly accessible financial services for all.
I’ve always been a strong advocate for the financial services industry working closely with regulators and governments to drive innovation and inclusion. Throughout 2020 these organisations proved that they are also just as capable of adapting quickly. As such, I believe 2020 has established a significantly different pace for innovation, and over the next decade we will see this continue apace.
