Your Friday fix for global fintech and payments news
As the second week of 2021 draws to a close, we are covering the UK’s three year anniversary of Open Banking and what the regulation means for banking habits in the future. We are also looking at the use of QR code payments, and the announcement that Ithmaar Bank in Bahrain has signed a processing agreement with Compass Plus customer, Sinnad.
Our weekly round-up brings you a dose of some of the biggest news announcements from the past seven days so you can keep an eye on all that’s shaping our world this week.
- Three years since PSD2 marked the start of Open Banking – where is the UK today?
- QR code payment users to reach 2.2 billion globally by 2025
- Ithmaar Bank signs credit and prepaid cards processing deal with Sinnad
January 2018 marked a big change for the industry – Open Banking becoming a regulatory requirement, with the aim of providing choice for consumers and increasing competition for the big bank. The past year has shown significant increase in use, from only 1 million users in January 2020 to more than 2.5 million consumers using Open Banking to move and manage their finances today.
320,000 payments were made via Open Banking in 2018, which has risen year on year to reach over 3.4 million payments in 2020. API calls have increased from 66.8 million in the first year to almost 5.1 billion last year. It is safe to say that Open Banking is continuing in its rapid expansion, with almost a million new users every six months.
Over the last 12 months, Open Banking implementation has been focussed on improving functionality and usability to make it even more accessible for consumers. Imran Gulamhuseinwala OBE, Implementation Trustee at the Open Banking Implementation Entity, said: “We have developed a world-leading, thriving ecosystem of nearly 300 regulated providers, who collectively are bringing innovative new products and services to market.”
Juniper Research has predicted that the total number of QR code payment users will exceed 2.2 billion by 2025. The value of these transactions is expected to reach $2.7 trillion by the same time. In 2020, 29% of all mobile phone users globally are using QR code payments, around 1.5 billion consumers.
Nick Maynard, Research Author, said: “QR code payments have low acceptance costs versus contactless payments, meaning that they are highly competitive and appealing to retailers in emerging markets, which lack card infrastructure. However, the low costs mean that accepting QR codes alongside cards is also viable. Partnerships in developing markets will be critical to driving QR adoption.”
There are talks to make national regulators for QR schemes a priority, after seeing the success of the SGQR in Singapore, which has massively accelerated the growth of QR code payments. The research suggests that QR code payment schemes will account for 22% of all QR code payments by 2025, in comparison to just 8% of total volume in 2020.
Compass Plus customer, Sinnad, has been chosen by Ithmaar Bank to provide card processing services in the Middle East and Africa. Ithmaar Bank is one of the largest Islamic banks in Bahrain, and Sinnad will enable the bank to operate its card services using its state-of-the-art solution.
Mohamed Janahi, Ithmaar Bank General Manager for Retail Banking Group, said: “The agreement with Sinnad comes to expand our services into a new era of excellence. The combination between the bank’s ambitious to lead in the market and Sinnad’s state of the art cards solutions and expertise in this field, shall result in a tremendous success in enhancing the payments offering,”
Sinnad has been a Compass Plus customer since 2017, and many of the processor’s customers have now migrated to the new platform. Our partnership has seen Sinnad become PCI DSS compliant, enabled them to offer secure, tokenised mobile payments, and recently facilitated the migration of Ithmaar Bank.