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Looking Forward: Our 2023 Predictions

First published: 12/01/2023

updated: 12/01/2023


We at Okay love writing a predictions-post every January for the new year ahead. While we haven’t always been able to predict what will happen within the world of payments and security, in such an ever-evolving sector, who could blame us? But whether we get it right or wrong, taking the time to think about what could happen has been worthwhile. So, without further adieu, here are our top five 2023 predictions.

1. The Increasing Importance of Artificial Intelligence

AI and machine learning are already showing real progress, and they will become increasingly important in the payment industry. Today, AI and machine learning can already be used for fraud detection, credit risk analysis, and improving customer service. Such technologies help banks make more accurate predictions, operate more efficiently, and improve customer experience. 

However, the question here is not whether AI will become more important but how. The goal should be to avoid becoming a “black box”, hiding existing biases behind technical mumbo-jumbo. This is because modern decision support systems have to be able to say why a decision has been made, and the next generation of AI support in payments must be able to do the same.

2. Identity Wallet Solutions in Europe Will Grow (Slowly)

An identity wallet is a secure digital platform that allows individuals to store and manage their personal and financial information in one place. This includes payment information, identity documents, and other sensitive data. Identity wallet solutions are becoming more important as people increasingly use digital devices and services to manage their personal and financial information. 

In October, we last wrote on eID and Identity Wallets. In it, I described what could happen if your digital identity was stolen in Norway. While the EU is working hard on their proposal, there is still the challenge of getting to the tipping point, where growth in available services leads to growing users. This is why it is likely that we’ll see multiple technical pilot projects and actions related to the growth issue over the next year.

3. Frictionless Payments

Over the last few years, online payment security has been moving from OTP via text message to banking apps and Open Banking schemes. And so I expect to see the continued growth of digital and mobile payments as more people use their smartphones and other devices to make purchases and manage their finances. This trend will also likely lead to the development of new payment technologies and platforms that make it even easier and more convenient for users to make payments and manage their finances. 

A local example in Norway is “Vipps”, an online payment service that has seen rapid growth and is, in many cases, replacing card payments. Here in Norway, everyone has a bank account (you can get one when you’re 6 years old). Vipps comes into play as a simplified payment method: instead of entering a card number and going through 3D Secure, you enter your phone number when making a payment. You then confirm through the Vipps app to pay and get an official receipt. This is quite basic functionality, but seeing that most people remember their phone number, the shopping cart abandonment rate decreases with such a payment method.

In addition, I expect to see a continued focus on improving security and protecting user data as concerns about data privacy and security continue to rise. We will likely see more frictionless payment methods and a more significant focus on the security of the payment.

4. Moving From Cryptocurrencies to Central Bank Digital Currencies

I’m sure everyone reading this post has at least some familiarity with the latest set of crashes in crypto. If not, I recommend following Web3IsGoingGreat, which is an excellent way to track tremendous losses and fraud. Here in Europe, we’ve already seen an effect on AML regulation also targeting cryptocurrency exchanges, with senators in the US senate recently following suit.

With that said, it is difficult to predict the exact impact that cryptocurrency regulation will have, as the regulatory landscape for cryptocurrencies is still evolving, and various approaches are being taken by governments and regulatory bodies around the world. But, regulators must strike the right balance between promoting innovation and protecting consumers. One way this might happen is to restrict unregulated cryptocurrency use and suggest that consumers use CBDCs instead.

5. PSD3 On the Horizon

Over the last couple of years, there have been several new regulatory initiatives within anti-money-laundering, KYC, cryptocurrencies, digital identities and other fields. A lot of these initiatives have an impact on the same area regulated by the Payment Services Directive. So, when we look at the timing of PSD1 (2007) and PSD2 (2015), it is easy to predict that there will be another EU Commission initiative around a new PSD3 starting this year.

One way this new PSD3 can make changes is by enabling strong customer authentication (SCA) to shift the balance of control between merchants, acquirers and issuers and allowing the established chargeback system to perform its function of holding merchants and their acquirers accountable for their responsibility to prevent fraudulent payments. An illustration of how this could work in practice is for merchants that have repeat customers who have created an account: SCA could be applied once, potentially when registering, but not to each subsequent transaction. But, a new PSD3 will also have to address the significant changes since the introduction of the PDS2.


What do you think? Do you agree or disagree with our predictions? to join the conversation, or take a look back on how well our 2022 predictions .

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