# End of year overview of the payments industry
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-12
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: The Future of Payments: Open Banking, Gen Z Fintech Trends
Meta Description: Discover the latest trends in the payments industry, as COO and Co-founder of Cheddar, Luke Ladyman, explores the impact of Open Banking and how Gen Z is
URL: https://financedigest.com/end-of-year-overview-of-the-payments-industryhtml

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_By_ **_Luke Ladyman,_** _COO and Co-founder of Cheddar_

Over the past year, the payments industry has gone through some pretty incredible transformations. Businesses have invested in fine-tuning their digital experiences to honour customer expectations at every turn in their journey, starting with payments.

After almost three [years of changing](https://www.financedigest.com/1-in-10-workers-considering-a-career-change-in-the-next-year.html "1 in 10 workers considering a career change in the next year") work and shopping patterns, consumers are now more comfortable than ever in navigating the world through a digital prism. Across all generations, consumers are adapting to the [way in which they make payments](https://www.financedigest.com/5-ways-banks-can-compete-in-payments.html "5 ways banks can compete in payments"), utilising contactless payments and other payment methods to complete purchases.

**The expansion of ‘Open [banking’ across](https://www.financedigest.com/digital-transformation-across-the-banking-industry.html "Digital transformation across the banking industry") the UK, EU and even perhaps an introduction to North America**

The UK can take pride in the fact it leads the charge when it comes to the adoption of [Open Banking](https://www.financedigest.com/barclays-private-bank-opens-new-office-in-verbier-switzerland-for-2022-23-ski-season.html "Barclays Private Bank opens new office in Verbier, Switzerland for 2022/23 Ski Season"). But as the UK economy falls into recession and the [cost-of-living crisis](https://www.financedigest.com/british-shoppers-defy-cost-of-living-crisis-at-christmas.html "British shoppers defy cost-of-living crisis at Christmas") worsens, 2022 has ended on a fairly shaky note. Having said that, it hasn’t all been bad news; this [year has seen phenomenal shifts in how consumers spend and how businesses](https://www.financedigest.com/why-the-new-year-is-the-best-time-to-start-your-dream-tech-business.html "Why the New Year is the best time to start your dream tech business") have adapted to this.

In January, the number of open banking users in the UK [reached 5m, according to the Open Banking Implementation Entity (OBIE)](https://www.openbanking.org.uk/news/open-banking-passes-the-5-million-users-milestone/). This was a [significant milestone with around 10.6% of the UK’s banking](https://www.financedigest.com/squirro-research-reveals-banks-believe-artificial-intelligence-can-have-a-significant-and-positive-impact-on-their-business.html "Squirro research reveals banks believe artificial intelligence can have a significant and positive impact on their business") population all plugged in.

With the help of [Open Banking](https://www.financedigest.com/how-open-banking-will-change-the-banking-industry-in-the-next-10-years.html "How Open Banking will change the banking industry in the next 10 years"), switching to new products has been made easier, empowering individuals into making smarter financial choices such as using peer to peer (P2P) payments apps and earning cashback on the go. And as the fear of a global recession grows, Europe and North America will look to support and [future proof the optimisation of Open Banking](https://www.financedigest.com/bank-of-the-future.html "Bank of the future").

The introduction of variable recurring payments (VRPs) and long-lived consents when [customers link their accounts to authorised Third Party Providers](https://www.financedigest.com/banks-can-provide-a-protective-shield-to-defend-customers-from-cyber-attack.html "Banks can provide a protective shield to defend customers from cyber attack") (TPPs), should unlock novel solutions within the payments space for 2023.

**How Gen Z** [continues to change the scope of fintech technology](https://www.financedigest.com/how-video-technology-continues-to-boom-in-the-education-sector.html "How video technology continues to boom in the education sector")

The past [year has been a very bumpy ride for Gen Z to say](https://www.financedigest.com/uk-to-avoid-recession-this-year-but-outlook-still-weak-bcc-says.html "UK to avoid recession this year but outlook still weak, BCC says") the least. They made it through the pandemic only to then face a [cost-of-living crisis](https://www.financedigest.com/britain-urges-banks-to-offer-mortgage-flexibility-in-cost-of-living-crisis.html "Britain urges banks to offer mortgage flexibility in cost-of-living crisis") and now a recession, arguably making them the most financially insecure generation of our time.

2022 witnessed a generation frustrated by their financial situation, [leading to a rise in customer expectations to ensure that fintechs](https://www.financedigest.com/2022-the-year-that-facial-recognition-will-lead-the-fintech-industry.html "2022 – The year that facial recognition will lead the fintech industry") work to remedy their financial and personal pain points.

This generation desires fintech services that won’t penalise them for their lack of [financial](https://www.financedigest.com/how-can-fintechs-better-engage-zillennials-with-their-financial-health-the-answer-lies-in-speaking-to-them-in-their-own-language.html "How can fintechs better engage Zillennials with their financial health? The answer lies in speaking to them in their own language") knowledge or stability – expecting fintech technology to reflect this. The [payments industry](https://www.financedigest.com/4-payments-industry-predictions-what-will-disrupt-the-market-in-2022.html "4 Payments Industry Predictions – What Will Disrupt the Market in 2022?") to this generation will not just be about how they spend their first paycheck, but will be their own personalised financial tool.

As they continue to [face the most financially challenging](https://www.financedigest.com/global-economy-seen-facing-a-challenging-year-eurochambres.html "Global economy seen facing a challenging year -Eurochambres") times in recent history, Gen Z will turn to services that will make their financial lives easier. They will look to technology that will not require them to greatly alter spending habits whilst they navigate the [cost-of-living crisis](https://www.financedigest.com/cost-of-living-crisis-casts-shadow-over-europes-black-friday.html "Cost-of-living crisis casts shadow over Europe’s Black Friday").

**How fintechs will empower consumers to better [manage their finances](https://www.financedigest.com/finance-management-for-small-business.html "Finance management for small business") amidst the cost-of-living crisis**

This year has witnessed solutions override legacy payment systems when purchasing goods as [digital](https://www.financedigest.com/can-i-please-speak-to-someone-why-building-relationships-is-still-crucial-in-digital-payments.html "“Can I please speak to someone?” Why building relationships is still crucial in digital payments") payments come to the forefront of economies squeezed by rising living costs. [Fintechs have empowered consumers by using Open Banking](https://www.financedigest.com/fintech-v-the-banks-uneasy-bedfellows-or-a-match-made-in-heaven.html "FinTech v the Banks: Uneasy Bedfellows or a Match Made in Heaven?") technology to deploy financial solutions specific to their needs.

2022 has seen an increase in value and added incentives for consumers when [choosing where to shop during these challenging](https://www.financedigest.com/5-things-to-consider-when-choosing-a-challenger-bank.html "5 Things to Consider When Choosing a Challenger Bank") times. We have seen a [renewed push](https://www.financedigest.com/in-renewed-push-spain-to-tender-eu-funds-for-evs-batteries-in-july.html "In renewed push, Spain to tender EU funds for EVs, batteries in July") for digital currencies and frictionless banking, further placing emphasis on bank-agnostic tools that offer consumers more choice and personalised offerings – we can expect this to continue.

From savings platforms to automated bill payments, the fintech industry has had a clear and consistent impact with consumers [reaping the benefits](https://www.financedigest.com/can-finance-reap-the-benefits-of-the-cloud-without-compromise.html "Can finance reap the benefits of the cloud without compromise?") of saved time, money and increased control. Given the uncertain economic landscape, fintechs will [provide a critical](https://www.financedigest.com/keysource-to-provide-critical-facilitiesmanagement-support-for-leeds-city-council.html "KEYSOURCE TO PROVIDE CRITICAL FACILITIESMANAGEMENT SUPPORT FOR LEEDS CITY COUNCIL") lifeline to millions of consumers, making adoption even more attractive.

**Beyond 2022**

As we approach the new year, we should expect to see a bold shift towards new hyper-personalised experiences as the payments [industry continues to improve business](https://www.financedigest.com/5-business-ideas-influencing-the-travel-industry.html "5 business ideas influencing the travel industry") to consumer (B2C) and consumer to consumer (C2C) optimisation, aiding the financial economy.

As digital natives, Gen Z are tech savvy enough to adapt to the changes on the horizon and will take full advantage of the opportunities to make and save extra [money using Open Banking](https://www.financedigest.com/marketmind-banks-are-leaking-money.html "Marketmind: Banks are leaking money").

Our personal mobile devices will take on an even greater role in our everyday life and will determine our engagement with [financial services](https://www.financedigest.com/devops-the-secret-tool-thats-transforming-financial-services.html "DevOps: The Secret Tool that’s Transforming Financial Services"). As a result, we [know that the next year in the payments](https://www.financedigest.com/the-end-of-payments-as-we-know-it.html "The end of payments as we know it") industry will be greatly shaped by technological innovation and exciting developments. Watch this space.


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