Ralf Ohlhausen

Maybe PSD2 was meant to save banks? 🤔 Do you remember when PSD2 and open banking became mandatory in the EU in 2018? In the years prior and afterwards, many banks complained as they were forced to offer 𝘧𝘳𝘦𝘦 access to third parties putting their own customer frontend at risk of losing relevance. Many banks built sub-ideal APIs, often with poor connectivity and in same cases even missing data fields. If customers cannot use third party services properly, maybe these third party services just go away and customers return to the bank-own frontends? But guess what, these third party services and PSD2 exists because of customer demand.  Banks can limit the performance of their 𝘰𝘸𝘯 APIs but cannot change customer demands. With embedded finance and the fintech development in general, we are seeing an ongoing rise of infrastructure providers. Building, designing and launching financial services will become easier and easier. Customers have more choices than ever. And if banks are not addressing their customer needs, others will. Many banks fought the implementation of PSD2. But I feel, they should be thankful for the open banking regulation, because it forced them to leave their silo and interact with customers, fintech companies and non-financial brands. It was just a first step but maybe an important one for (some) banks to understand how they can continue to grow? What do you think? PS: Subscribe to my newsletter if you want to follow the developments in embedded finance (link under my name). #embeddedfinance #openbanking #embeddedbanking

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EPI launches Wero wallet in Germany The European Payments Initiative (EPI) has launched its mobile-first wallet and instant account-to-account payments system in Germany, with other counties set to follow in the coming months. German Sparkassen and Volksbanken, Raiffeisenbanken customers can now make instant money transfers from account to account between individuals, via their banking app. Deutsche Bank will launch wero later this year, starting with Postbank. Wero enables mobile payments from one phone to another. Unlike traditional transfers, Wero users do not need the recipient's 22-digit account number (IBAN). Instead, a mobile phone number or email address can be used for real-time money transfers. Next year, Wero will get the ability to pay any small professional from the wallet, and also pay merchants online and upon invoices via QR code. This includes the ability for consumers to manage recurring payments for subscriptions or installments, but also to pay in merchant apps at point of sale without going through the cashier. In-store payments at the cash register will also be added in 2026, along with other capabilities, such as BNPL, merchant loyalty, programme integration and expense sharing. https://lnkd.in/ev3nH8_Z

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Last Friday, the Eurosystem Exploratory Toolbox reached its planned conclusion. Between May and November, participating banks and market DLT operators had the opportunity to conduct trials and experiments with Delivery-vs-Payment using central bank money. These trials were facilitated through three interoperability solutions provided by the Bundesbank, Banque de France, and Banca d’Italia. In my view, this was one of the most exciting developments in 2024 regarding DLT adoption in the financial industry. The exploratory toolbox served as a catalyst for digital asset issuances and transactions. On SWIAT alone, we settled more than €550 million in real-value transactions, with Siemens' €300 million bond being the largest. We feel ambivalent as we reflect on this journey. On the one hand, we’re happy and proud to have had the chance to see these transactions executed on SWIAT and contribute to proving that the interoperability mechanism works. On the other hand, there’s also a sense of sadness as this exploratory phase has now come to its planned end without a concrete plan for continuation. In any case, the Eurosystem Exploratory Toolbox demonstrated that the interoperability mechanism functions as expected, adds value for market participants, and integrates seamlessly with existing infrastructure. Based on the empirical evidence gathered during the last months, we hope this success story will soon continue, with the Eurosystem bringing the interoperability mechanism to production in one form or another.

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Great insight from #FIS Kevin Flood - are you and your firm ready for the mandatory change in the payments landscape? Do you need assistance with your technology to support the impacts of moving to real-time? Consider; fraud, payments, real-time core, reconciliation - FIS are supporting clients with the change. Get in touch. #sepa #payments #instantpayments

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Despite a common perception to the contrary, open banking is one of banks’ best bets to go on the offensive and find new monetization opportunities. Let’s take a look.   It’s true that open banking has created for banks new compliance requirements that are eating up resources and attention. What is sometimes not realized though, is that at the same time it opens up a much-needed window of opportunity in a fast-moving world:    —     #data and APIs are now the building blocks of the new economic model, in which innovation is customer rather than product-driven —    Banks that are not able to properly connect and consume data via APIs, are essentially banned from the #innovation that is happening —    The traditional #banking model of vertically integrating static products in a closed-loop set-up is no longer a viable option —    The fiercest competition is no longer coming from the inside of the industry but rather from adjacent segments and from the outside   Adapting to this reality is a one-way street for banks. Here’s how:   —    Banks need to change their vertically integrated and product-focused approach to an open set-up that is built on integrating third-party and #fintech offerings via APIs —    Despite clearly falling outside their comfort zone, the opportunity for banks lies in combining existing elements like trust and customer positioning with new ones like technology and data analytics —    As the ecosystem becomes more advanced and adapts to customer needs, it will become increasingly difficult for banks to go it alone with nothing more than their own apps —    As long as they keep their customers happy, banks do not necessarily have to own everything they offer   A paper from Whitesight, AFS + Brankas has summarized well banks’ monetization opportunities across 4 clusters: 1) Banks work with external developers and incentivize them to use their premium APIs to create innovative solutions while generating revenue from API subscriptions and usage. 2) Banks monetize their license and infrastructure by offering BaaS APIs and services to fintechs, merchants and other third parties. 3) Banks position themselves as intermediaries, offering a platform for third-party fintechs and developers. These marketplace and platform APIs encompass lead generation, product catalog management, partner relationship tools, and recommendation engines. Banks profit by facilitating valuable interactions between fintechs and customers. 4) Banks leverage open banking APIs themselves to build value-added services that improve the customer experience and generate additional revenue streams. The more successful banks manage to perform in this #strategy, the higher up they can move in the new value chain and subsequently the more new revenue sources they can generate. Opinions: my own, Graphic sources and monetization opportunities: Whitesight, AFS + Brankas I have started a newsletter! Subscribe here: https://lnkd.in/dkqhnxdg

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Last week, as part of the ECB Trials, DekaBank Deutsche Girozentrale and Bankhaus Metzler successfully settled a bond transaction using central bank money. Deka was the issuer and registrar (eWpG), while Metzler was investor. The crypto security was delivered via the SWIAT platform, while the corresponding payment was made in central bank money, effectively achieving a Delivery-vs-Payment (DvP) across two separate ledgers. This sequence diagram outlines the general process flow when both sides have the corresponding automation components installed. In the first three steps, the issuer and the investor agree in SWIAT on what needs to be settled (U2A* steps). Following this, automation takes over to execute the delivery (A2A** steps). Each participant will have an automation component installed, known as the Bundesbank Trigger Chain Synchronizer. This component is capable of settling the DvP transaction between SWIAT and the Bundesbank Trigger Chain by utilizing the HTLC (Hashed TimeLock Contract) protocol. The nice things about the HTLC protocol is that it does not require a trusted third party to act as a transaction coordinator, allowing for greater flexibility in transactions between counterparties. The counterparties themselves can execute the DvP, with the complexity of the protocol being encapsulated in the automation component. U2A* = User-to-API via a WebApp A2A** = API-To-API automation #blockchain #dvp #cbdc #payments 

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How can FIs benefit from the new #FIDA regulation? What do we need to do to create positive impact from what is one of the most disruptive upcoming EU regulations for the Financial Services industry on our path to an open data society. TechQuartier and Deutsche Bank brought together practitioners from banks, insurances and TPPs, as well as associations for a day of content, but mostly working on concrete questions we need to address as we start bringing #FIDA to life. I was asked to provide an impulse and moderate the day. ❗ Remember: We will see huge investment into API programmes and data landscapes. Some of the cost can be recouped, most likely on an API-call basis. Therefore, what is needed are customer-facing offerings, that will drive use of these APIs, at scale What's needed will be: 📕 Education: More people need to be clued up about what impact FIDA will create 🚧 Scheme building: How do we organise ourselves as an ecosystem? Who will be the people building and running the schemes and how many of them will we have? 📊 Data strategy: We need to continue to unify the location, structure and use of data within banks and insurances alike... a central data repository is required 🏦 C-Level exposure and commitment: We need to drive more awareness of the opportunity and importance at the top level of organisations and 🙋‍♀️ Ownership: Define who the owner of this complex topic, marrying compliance, governance, technology, data, product, organisational structure and more will be in each institution 🥇 Use & Business Cases: How do we build business in the FIDA framework? What will be first, significant use cases? How do we early on test and ensure customer attractiveness? 🇪🇺 International reach: This is a cross-country topic, requiring inter-operability from day 1 🤝 Ecosystem: Who are all the players that need to come together to make this happen and how do we bring them together for effective collaboration? Thanks to Joris Hensen William Powell Alice Rettig Florian Schreiber for making this happen, it was great to see you Silke Finken Mounaim Cortet Julian Prüfer Harold Mahadew Harry V. Until the next edition in 2025!

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⬇ Today we’ll focus on the #Payments ecosystem in #Cyprus from our white paper, "Key Players in the EU Payments Landscape 2024": https://lnkd.in/eZCqN7j7 🌐 Originally a cash-based country, the degree of digitalization of payments in Cyprus grew heavily between 2019 and 2022. Some alternative payment methods have emerged in collaboration with major Cypriot banks, with important players such as Apple Pay, Google Pay, Xiaomi Technology Pay and Garmin Pay. Revolut is an important player in the Cypriot market and is a commonly used payment method. Other players include the English solution Settle and the local solution sKash. 📈 Cross-border payment solutions are also present with ECOMMBX as a leader in this field. The company specializes in e-account management, cross-border payments, personal & business cards, acquiring, and multi-currency conversions. 🏦 As of 2024 the Central Bank of Cyprus, CBC, identified five credit institutions as systemic banks429 among which can be found the Bank of Cyprus, Hellenic Bank, Eurobank Cyprus, AstroBank and Alpha Bank Cyprus. The Cypriot banking sector is heavily concentrated with the five largest banks capturing over 90% of the total market share. In 2023, Eurobank Cyprus acquired a 17% stake in Hellenic Bank and as of march 2024 the bank’s parent Eurobank acquired a majority stake in Hellenic Bank. Other players worth mentioning in the Cypriot banking system are cdbbank (The Cyprus Development Bank Public Company Ltd), Société Générale and Ancoria Bank. 📶 In the realm of payment processing, many companies stand out such as payabl., JCC Payment Systems, Nuvei and Unlimit. payabl. is an EU-regulated PSP which specialises in acquiring, issuing, mobile payments and banking services. The company processes Visa and Mastercard but also other payment methods such as PayPal, Apple Pay, Google Pay or Klarna. The Payments Association EU is proud to work with many important players in the Cypriot payments landscape, including payabl. and ECOMMBX. Key Takeways💡: “The payments industry in Cyprus has been continuously evolving in recent years through the rapid introduction of new players and modern technologies such as mobile wallets. The increasing accessibility and adoption of such technologies by the wider population of the island demonstrates..” “The payments landscape in Cyprus is evolving rapidly, driven by EU regulations like PSD2, which promote open banking and innovation. The rise of fintech solutions, including mobile payments and e-wallets, reflects …” Want to read the full “Expert Opinion” from Deloitte professionals George Nathanael and Elsa Abdo on the Cypriot payment landscape? Download the report here: https://lnkd.in/eZCqN7j7

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If you want to understand the cross-border #payments’ trends and #future, then this is a key list. My highlights from the OMFIF future of payments 2024 report, just published: 1. CBDCs (Central Bank Digital Currencies): -      Multi-CBDCs are emerging as alternatives to existing cross-border payments systems. -      Multi-CBDCs aim to 1) improve efficiency 2) reduce costs 3) challenge incumbent infrastructure by enabling transactions in local currencies. -      Project mBridge remains the most advanced multi-CBDC platform: · MVP stage in June 2024 · 32 observing members (out of which 28 central banks) · Biggest limitations for widespread adoption 1) liquidity 2) governance -      Interoperability models of CBDC design a key consideration. -      Faith in connecting CBDCs to improve x-border payments has dropped sharply 2. Correspondent banking: -      A $200 bn annual revenue business -      Compliance complexity is the number 1 driver keeping costs up -      Standardization (i.e. ISO 20022) is the way to reduce costs, but implementation has been a challenge (only 66% of surveyed institutions are likely to meet the November 2025 transition deadline). -      APIs and #AI are the main technologies to improve CB and bring down costs -      Fintechs have spotted the opportunity and are challenging banks 3. Tokenization: -      Tokenization can 1) streamline compliance checks 2) improve settlement efficiency 3) unlock new functionality -      Despite the growing popularity of stablecoins, the official sector remains skeptical of ceding control of tokenized cash to the private sector -      Achieving a cross-border tokenized network will not be easy (governance is the main challenge) -      There are several consortia, both public and private, pursuing tokenization. Project Agorá and Partior are two examples. -      Project Agorá’s goal is to create a platform for wholesale xborder payments including tokenised wholesale CBDC and tokenised commercial bank deposits. 4. Instant payments systems (IPS) -      Rapidly growing in importance - in use in 80 countries worldwide -      India and Brazil in the lead with UPI and Pix respectively -      Interoperability is the main challenge. BIS’s Project Nexus acts as a model by proposing a central hub to standardize the IPS connections (vs bilateral connections that are very difficult to scale) -      However, even central models like Nexus need substantial investment and face maintenance and governance challenges -      Connecting instant payments systems is seen as the most credible option to improve x-border payments Fragmentation remains the key challenge for cross-border payments. Despite promising initiatives across many levels and jurisdictions, we are still far away from an optimal set-up, i.e. a kind of a global payment network. Summary by: Panagiotis Kriaris, source: OMFIF, Future of Payments 2024

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Demystifying the Payment Scope Related to the European Digital Identity Wallet 💡 European Commission now proposes a European Digital Identity Wallet (EUDIW) that will be available to all EU citizens, but there is some debate about its relevance for payments use cases. The EUDIW is aimed at supporting a large number of use cases. Just some examples could include requesting medical certificates, reporting a change of address, opening a bank account, filing tax returns, applying for a university place, storing a medical prescription that can be used anywhere in Europe, proving your age, renting a car using a digital driving licence, and checking in to a hotel 📱 There is some debate about the role of the EUDIW in payments-related use cases. Payments were not actually mentioned as a use case in the first draft of eIDAS2.0. Since the publication of that first draft, however, the use case for payments has become a point of discussion. Some parts of a payments flow are in scope as an EUDIW use case, while other elements remain out of scope. We believe banks must accept EUDIWs for the purpose of identification and authentication, both in onboarding and payments. Payments authorisation, however, remains under banks’ own control and falls outside the scope of the EUDIW. This means that, in line with PSD2 requirements, banks may establish contracts or setup schemes with issuers of EUDIWs to delegate payment authorisation to the EUDIW 🙋‍♂️ Identification for the purpose of opening a bank account is one use case of the EUDIW. This use case simplifies the process of onboarding customers. When opening a bank account, banks need to validate and verify a customer’s identity for ‘Know-Your-Customer’ (KYC) purposes. Use of the EUDIW can significantly improve banks’ existing onboarding processes. This is beneficial for banks because the onboarding and KYC process is cost-intensive. Meanwhile, EU citizens benefit because identification with the wallet is very easy compared to existing processes, especially in an online context 🤝 Authentication for both login and payments is another use case of the EUDIW. In fact, the European Commission specifically mentions this: “Yes, citizens will be able to use the EU Digital Identity Wallet for identification and authentication for payments, opening an account and other services in full security and protection of personal data. In all these cases, the wallet will not replace, but complement solutions offered by banks.” This means that European banks need to accept the EUDIW as a valid authentication mean for logging in to online banking environments. As indicated by the European Commission, the EUDIW will not replace the existing alternatives (such as card readers, digital identity solutions and banking apps), but instead complements the solutions offered by banks. Source: Innopay - https://t.ly/mFruB #Fintech #Banking #OpenBanking #API #FinancialServices #Payments #eIDAS #KYC #Wallet #DigitalIdentity 

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🚀💳 𝗘𝗣𝗜’𝘀 𝗪𝗲𝗿𝗼 𝗪𝗮𝗹𝗹𝗲𝘁 𝗥𝗲𝗮𝗰𝗵𝗲𝘀 𝟭𝟰𝗠 𝗨𝘀𝗲𝗿𝘀! 🌍✨ The European Payment Initiative (EPI Company), designed to compete with Visa and Mastercard in Europe, has achieved a major milestone, enrolling 14 million users and processing 8 million transactions since launch. 🎉📈 Wero Wallet is now live in Belgium, following earlier launches in France and Germany. 🇧🇪🇫🇷🇩🇪 Deutsche Postbank Group and Deutsche Bank customers will gain access to Wero starting in 2025, with plans to integrate Wero into their banking apps later.🏦📱 Looking ahead, Wero is set to expand its capabilities with online payments, in-store QR payments, recurring payments, BNPL options, and loyalty program integrations by 2026. EPI is also working to onboard more banks, creating a unified European payment solution. 💳💡 Source: https://lnkd.in/dGXs2K_v #Fintech #WeroWallet #EuropeanPayments #DigitalWallet #PaymentsInnovation #FutureOfFinance

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A real good summary of the new possibilities with the different EU payment & digital identity approaches by digitallabor.berlin. In the end everything is highly depending on the end user acceptance, with the right wallet offering (in terms of daily relevance and the right feature/function set). #wallet #payment #eID

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⬇️ Today we’ll talk about the #Payments ecosystem in #Germany from our white paper, "Key Players in the EU Payments Landscape 2024": https://lnkd.in/dVYy5rTP 💳 Dominating the market, the local girocard system remains the most widely used payment method, with approximately 7.5 billion transactions in 2023 and accounted for up to 88% of debit card payments. Other key players include Visa and Mastercard. 📱 Despite a strong preference for cash, Germany's shift towards digital and cashless payments is accelerating. Leading mobile payment methods like Google Wallet, Apple Pay, Amazon Pay, and PayPal are increasingly popular in e-commerce. Newly launched in 2022, Digital giropay aims to rival these major platforms, alongside other mobile payment options such as PAYBACK, Barclays bPay, and BitPay. 🏦 The German banking sector is diverse and comprises three main groups : commercial banks, savings banks, and cooperative banks. The three largest bank, Deutsche Bank, DZ BANK AG, and Commerzbank AG, alongside a strong network of savings and cooperative banks, issue most of the debit cards. 📶 Computop - the payment people, PAYONE, Nexi Germany, Unzer, Verifone and VR Payment GmbH are major players that lead in payment processing, offering a range of omnichannel solutions. The top five players in the German Banking-as-Service market are Deutsche Bank, Commerzbank AG, KfW Bankgruppe, DZ BANK AG, and HypoVereinsbank - UniCredit - Deutschland. Besides them, there are players such as Raisin Bank AG, Solaris SE, Fidor Bank AG, and many others. The Payments Association EU is proud to work with many important players in the German payments landscape, including StoneX Group Inc., Giesecke+Devrient, 1-CP, epay, a Euronet Company, NG-Consulting Europe and RS2 . Key Takeaway💡: “Germany’s payment landscape is distinguished by a strong preference for the Girocard, which recorded approximately 7.5 billion transactions in 2023, alongside a robust shift toward cashless payments as evidenced by ..” Want to read the full “Expert Opinion” from Deloitte professional Daniel Scheuermann on the German payment landscape? Download the report here: https://lnkd.in/dVYy5rTP

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A missing part for SEPA transactions is now defined. #verificationofPayee We @ Payment Guy took a deeper look what ist affected, requested and probably still not defined?

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If one third of European Banks that do not currently offer #instantpayments are unsure or unconfident they'll be ready for #SEPAInstant (source: RedCompass Labs), you can bet their institution's "bottom dollar" they are far from ready for the increase in #fraud that accompanies real-time payments. What's needed now is intelligent, learning technology that offers #SPEED and #ACCURACY in both transaction #MONITORING and #SCREENING. That's where Alertspeed comes in. With 96% payment screening accuracy and at lightning-fast speeds that enable you to #interdict and #prevent the fraudulent payments leaving, it makes moving to SEPA Instant just that small bit more comforting. Remember that fraud, and how your institution handles it, especially compensation, is going to become a hotly contested customer retention and acquisition issue. It's time to get ready. #Alertspeed is a multi-award winning, #RealTime, anti-financial crime platform recognized for Speed AND Accuracy.

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👛 Secure wallets for online and offline payments 💸 How do secure CBDC wallets work? I will explain at the 2024 webinar series of the Java Card Forum. I will do two runs of the talk on 📅 Monday 9th December, once in the morning (🕘 9am–10am CET) and once in the evening (🕔 5pm–6pm CET). Bring all your questions! Register here: Morning session 👉 https://lnkd.in/dNU_4TB3 Evening session 👉 https://lnkd.in/dnW6b2Px What can you expect? Many central banks – including the European Central Bank – have started investigating or piloting digital currencies (CBDC) to introduce yet another way to pay electronically. The wish list for CBDC is long: it should support online & offline payments, work as usual at the point of sale, be accessible to users without bank accounts, … At the centre of these design discussions are wallets, powered by secure hardware. In this talk, I give an overview over the current CBDC ecosystem, explain some novel techniques that could help to implement wallets at scale, and give a perspective regarding standardisation.

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Important (if unpopular) charts #2 – the euro area credit recovery is driven by unproductive FIRE-based lending. At least so far… In my analysis, I prefer to draw the distinction between two types of private sector (PS) credit ✔ Productive COCO-based lending: lending that supports production and income formation ie, productive enterprise ❌ Unproductive FIRE-based lending: lending that supports capital gains largely through higher real and financial asset prices. 12-month rolling flows of private sector credit are recovering slowly in the euro area (but remain muted). Unfortunately, c80% of these flows are in the form of unproductive FIRE-based lending. Contrast this with the recent peak in flows in September 2022, two months after the ECB started raising rates. At this point, productive COCO-based lending represented more than 50% of the total flows of EUR873bn. ❗ Economic recovery in the euro area needs support for productive enterprise. Instead, it is getting support for rising capital gains. Are policy makers taking notice? #cmmacroperspectives #euroarea

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💡 A really detailed and informative post from Kiran A. on Ebury's Virtual IBAN offering. 💱 If you are a UAE entity struggling for a Euro account to make collecting payments from your customers easier, or to hold funds on balance to pay future client invoices - get in touch!

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One of the highlights of this year in the Blockchain/DLT space. An exploratory toolbox for Delivery (blockchain) versus Payment with Central Bank Money via test (experiments) and productive (trials) Target2 cash accounts. 👏👏 Moreover, big kudos for this incremental, agile and empirical approach by the Eurosystem, which is in my opinion the right way for opening the doors to the next possible!

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