During 2024 Flagship shared insights on a diverse array of payments and fintech topics. Our analysis of Apple’s iOS NFC launch in Europe drew significant attention, highlighting its impact on in-store payments. Other topics included the decline of European local card schemes, the growth of next-gen POS systems, the success of PSPs in merchant VAS and opportunities for banks in merchant acceptance. An overview of our most significant insights is below.
Links to our 5 most read insights here:
- Apple Opening Up iOS NFC in Europe – Will it Change the Game for In-Store Payments?
- Europe's Local Card Schemes on a Steady Decline
- Next-gen POS Driving Impressive Growth
- Merchant VAS Now a Lucrative Reality for PSPs
- Banks Can Still Make a Comeback in Merchant Payment Acceptance
1. Apple Opening Up iOS NFC in Europe – Will it Change the Game for In-Store Payments?
Our most popular article focused on Apple opening its iOS NFC (“Near Field Communication”) technology to third parties after a European regulatory investigation found it was hindering competition. This change enables third-party market participants to access NFC hardware for contactless POS payments, providing alternatives to Apple’s previously closed ecosystem. Card-based wallet providers and issuers stand to benefit, as wallet providers can now reach a broader audience, and issuers can promote competing wallet solutions. In late 2024, rival payment methods and wallets such as Vipps and Swish launched their own NFC solutions, while others, like Bizum, have announced plans to roll out their own in 2025. It will be fascinating to track the adoption and evolution of these solutions in the coming months.
Links: Apple Opening Up iOS NFC in Europe – Will it Change the Game for In-Store Payments?
2. Europe's Local Card Schemes on a Steady Decline
European local card schemes are losing ground to Visa and Mastercard, driven by several key factors contributing to the decline of what was once the backbone of domestic banking systems. These include a lack of technical innovation, slow adoption of digital wallets, limited geographic reach and high integration costs for local schemes. However, these are just a few of the factors contributing to the growing dominance of Visa and Mastercard, with other underlying challenges at play.
Link: Europe's Local Card Schemes on a Steady Decline
3. Next-gen POS Driving Impressive Growth
Next-gen POS solutions redefine traditional markets for POS software, hardware, and payments, and have created a new class of high-growth fintechs. There is still plenty of growth runway to capture, as software products continue to add functional modules (HR, CRM, etc.) and connect value-added apps. Similarly, as payment acceptance becomes more mature, there is a logical roadmap for expanding fintech services into lending, expense management and pay-out services, payroll, and others. Lastly, we expect next-gen POS winners to increasingly expand globally, which has proven more difficult than in digital commerce software (e.g. Shopify). As small and medium-sized businesses increasingly embrace the advantages of modern-tech-led product and service bundles, the provider landscape will continue to be disrupted as legacy providers cede share to next-gen fintechs.
Link: Next-gen POS Driving Impressive Growth
4. Merchant VAS Now a Lucrative Reality for PSPs
VAS revenue on the back of merchant payments is no longer an aspirational upside, it has become an essential driver for growth. As the growth fundamentals of merchant payments mature and slow, driving topline growth and EBITDA is increasingly a function of VAS success. Fortunately, there is no mystery, the menu of available VAS is now well-defined. Capturing this opportunity, however, requires a focused strategy, strong GTM execution, and a well-chosen operating model (partner vs. in-house).
Link: Merchant VAS Now a Lucrative Reality for PSPs
5. Banks Can Still Make a Comeback in Merchant Payment Acceptance
Banks continue to face numerous challenges when it comes to merchant acceptance, losing distribution share with SMBs against ISVs and SaaS platform propositions. Despite this, we believe that there are sizable opportunities for banks provided they choose the right operating, brand positioning, and value-added services.
Link: Banks Can Still Make a Comeback in Merchant Payment Acceptance
We look forward to delving into more diverse topics that generate debate and challenge perspectives in the coming year. Should you have any questions, please do not hesitate to contact us at Info@FlagshipAP.com
