Navigatingthepaymentsmatrix

Chartingacourseamidevolutionandrevolution

PAYMENTS2025&BEYOND

2|PwCNavigatingthepaymentsmatrix

Foreword

Dearreader,

Thefinancial-servicesindustryisinthemidstofa

significanttransformation,acceleratedbytheCOVID-19pandemic.Andgiventhekeyroledigitisationplays

inthefinanciallivesofmoreandmoreoftheworld’s

population,electronicpaymentsareattheepicentreofthistransformation.

Paymentsareincreasinglybecomingcashless,and

theindustry’sroleinfosteringinclusionhasbecome

asignificantpriority.Paymentsalsoaresupporting

thedevelopmentofdigitaleconomiesandaredriving

innovation—allwhilefunctioningasastablebackboneforoureconomies.

Wearethereforedelightedthatthefirstreportweare

launchinginour2025&Beyondseriesfocusesonthe

paymentsindustryandthekeythemesthatareinfluencingit.Howtheindustryrespondstothesetrendswilldefine

bothhowsuccessfulitisinthecomingyearsanditsimpactonsocietyoverall.

Wehopethatyoufindtheseinsightshelpfuland

provocative.Pleasefeelfreetoreachouttomeandmycolleagueswithyourcommentsandfeedback.

Sincerely,

PeterC.Pollini

Principal,PwCUS

peter.c.pollini@

3|PwCNavigatingthepaymentsmatrix

Whereare

Figure1:Cashlesstransactionvolumewillmorethandoubleby2030

Numberofcashlesstransactionsinbillions

61%

GROWTH

Total3,026

wenow?

82%

GROWTH

1,818

Total1,882

SendingatexttopayforabusticketinTurkey,usingaQRcodetobuygroceriesinChina,ortappingasalesterminalwithamobilephoneintheUS.

1,032

EvenbeforeCOVID-19,thesewaysofpayingfor

Total1,035

goodsandserviceswereevidenceofasteadyshifttodigitalpayments—ashiftthatmightultimatelyleadtoacashlessglobalsociety.Globalcashlesspayment

522

494

375

349

volumesaresettoincreasebymorethan80%from2020to2025,fromabout1tntransactionstoalmost

Asia-Pacific

Africa

Europe

LatinAmerica

US/Canada

Asia-Pacific

Africa

Europe

LatinAmerica

US/Canada

Asia-Pacific

Africa

Europe

LatinAmerica

US/Canada

111

73

105

258

59

229

180

172

165

202020252030

1.9tn,andtoalmosttripleby2030,accordingtoanalysisbyPwCandStrategy&,PwC’sstrategyconsultingbusiness.

Asia-Pacificwillgrowfastest,withcashlesstransactionvolumeincreasingby109%from2020to2025and

thenby76%from2025to2030,followedbyAfrica

(78%,64%)andEurope(64%,39%).LatinAmerica

Note:Cashlesstransactiontotalsfor2025and2030areprojections.

Source:PwCStrategy&globalpaymentsmodel,2021

comesnext(52%,48%),andtheUSandCanadawillhavetheleastrapidgrowth(43%,35%)(seeFigure1).

Thismeansthatby2030,thenumberofcashless

transactionspercapitawillberoughlydoubletotriplethecurrentlevel,acrossregions(seeFigure2).

4|PwCNavigatingthepaymentsmatrix

Figure2:Cashlessuptakeisprojectedtorapidlyincreasethrough2030

1000

900

800

Cashlesstransactionspercapita

700

600

500

400

300

200

100

0

2015202020252030

Year

Asia-PacificAfricaEuropeLatinAmericaUSandCanada

Note:Transactionsfor2025and2030areprojections.

Source:PwCStrategy&globalpaymentsmodel,2021

DuringCOVID-19lockdowns,manypeopleadopted

digitalbehaviours,acceleratingtheproliferationof

mobile-firstdigitaleconomiesandrenderingcasheven

lessrelevanttodailylifethanitalreadywas(althoughinlessdevelopedeconomies,cashremainedessential).Inourlatestglobalsurveyofbanking,fintechandpaymentsorganisations,89%ofrespondentsagreedthatthe

shifttowardse-commercewouldcontinuetoincrease,requiringsignificantinvestmentinonlinepayment

solutions.Notonlythat,butalargemajority(97%)

agreedthattherewillbeamovetowardsmorereal-timepayments.

Beneaththeshifttocashlessliesalarger,moreprofoundchange.Notonlyaretraditionalwaysofpayingforgoodsandservices—includingthehumblepapercheckand

analogueinvoices—setforradicaltransformation,buttheentireinfrastructureofpaymentsisbeingreshaped,withnewbusinessmodelsemerging.

Thatreshapinginvolvestwoparalleltrends:anevolutionofthefront-andback-endpartsofthepaymentsystem

(instantpayments;billpaymentsandrequesttopay;

andplasticcardsanddigitalwallets)andarevolution

involvinghugestructuralchangestothepaymentmixandecosystem(emergenceofso-called‘buynow,paylater’

offerings;cryptocurrencies;andworkunderwayoncentralbankdigitalcurrencies).

Bothevolutionandrevolutionaresweepingtheglobe,butindifferentwaysandatdifferentpaces,creating

acomplexpaymentsmatrix.Manyorganisationsare

tryingtofigureoutwheretoplayandhowtowininthatmatrix,asevidencedbytheintenselevelofmergerandacquisition(M&A)activitysince2017.

Thepayments

industryadvancedinanirreversible

quantumleapduringCOVID-19,which

willhavemassiveconsequencesforyearstocome.”

Marc-HenriDesportes,DeputyCEO,Worldline,aglobalpaymentsandtransactionalservicescompany

5|PwCNavigatingthepaymentsmatrix

Fast-growingAsianmarketsaredrivingnewbusinessmodelsandinnovation.InChina,AlipayandWeChatPay,whichareowned,respectively,bye-commerce

giantsAntGroupandTencent,havecreatedanew

paradigmwith‘super-apps’aspaymentsplatforms.

Inourlatestglobalsurveyofseniorfinancial-servicesexecutives,78%ofrespondentssaidAsianinstitutionswillmoveatafasterpaceonglobalisationand

convergencethantherestoftheworldupto2025,

andthoseinEuropeandtheAmericaswillstruggletokeepup.

Giventheirrisingstrategicsignificance,some

governmentsaredevelopingpaymentsinfrastructureaspartofindustrialpolicytocontrolmoneyflows

andowndigitalanddataplatforms.Thesechanges

haveresultedinamushroomingofdomesticpaymentmethodsonthebackofthatinfrastructure,suchas

Troyi

nTurkey,

Miri

nRussia,andBrazil’sEloand

Pixs

ystems.

Thesectorhasalsobecomeincreasinglyimportantasacatalystforreducingtransactioncosts,fostering

growthandsupportingthetransitiontowardsdigitally

enabledandinclusiveeconomies.Indeveloping

economicregionsinAfrica,paymentsaregrowingfasterthantheglobalaverageandareallowingmillionsof

unbankedpeopletogainaccesstogoodsandserviceswithoutcash.

Thekeyassetinallofthisisdata.Paymentsgenerateroughly90%ofbanks’usefulcustomerdata—

informationaboutwhoisbuyingwhat,howmuch

andwhen.Thisiscreatingnewrevenuestreamsfor

paymentsbusinessesthatcanmonetisethatdata,yetitalsoexposesthemtorisksrelatedtodataprivacy.

Inoursurvey,dataprivacyandcybersecuritywere,

asonecategory,thetopconcern(48%)interms

oftheimpactofregulatorychangesoverthenext

fiveyears.Thisfaroutstripssecond-rankeddigital

identityandauthentication(31%),andiswellaheadofcryptocurrenciesandcentralbankdigitalcurrencies

(CBDCs)(rankedjointfifthat28%).

Recentdevelopmentsinhowmoneymoves—andevenwhatdefinesmoney—arethemostprofoundchanges

thatwe’llseeinthepaymentsindustryfordecadesto

come.Howthepaymentsmatrixdevelopswilldependonhowbanks,technologycompanies,regulators,

governmentsandconsumersrespondtothesechanges.

TrendsdrivingM&Aactivity

?Processorconsolidation.Thishasbeena

US-ledtrend,dominatedbythepursuitof

domesticscale,culminatinginthreelandmark,multibillion-dollardealsin2019:theacquisitionbyGlobalPaymentsofTSYS;Fiservbuying

FirstData;andFISacquiringWorldpay.

?Merchantservices.AnothertrendisspreadingacrosstheUSandEurope.ExamplesincludeItalianpaymentprocessorNexiin2020buyingDanishrivalNetstoformapan-European

merchantservicesplayerandtheacquisitionofIngenicobyFrenchfirmWorldlinethesameyear,followingitspurchaseofSwiss-based

SIXPaymentServicesin2018.

?Cardnetworksmovingclosertotheuser.ThistrendstartedwithMastercardacquiringUK’sVocalinkin2016,andthenpurchasingNets’saccount-to-accountbusinessin2020,ayearthatalsosawVisa’sattempttobuy

Plaid,anopenbankingaggregator.

?Globalmobilewalletsand‘super-apps.’Anascentthemecouldbecomeoneofthebiggest.AlipayhasbeenpursuingaglobalmobilewalletplaywithmultipleinvestmentsindomesticmobilewalletsandfranchisesinAsia.BigTechfirmsarealsoinvestingin

leadingpaymenttechnologiesglobally.

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Sixmacrotrendsaffectingthefutureofpayments

Sixmacrotrends—drivenbyacombinationofconsumerpreference,technology,regulationandM&A—willdeterminehowthenextfiveyearsplayout(seeFigure3).Webelieveleadershipteamsneedtounderstandeachofthesetrendsinordertoproperlyplanfortheirfuture.

Figure3:Sixpaymentsmacrotrends

1

2

3

4

5

6

Inclusionandtrust

?Two-prongedstrategiesandopportunitywilldrive

consumerandmerchantinclusion(especiallyacrossAfrica,LatinAmericaandAsia).

?Focusonmobilemoney,wallets,anddomesticandQRcodesolutionswillensurereachandlowcost.

?Centralbankswillmaintaintheirroleinensuringprivacy,stabilityandtrustinnewproviders,paymentmethodsandthefinancialsystem.

Digitalcurrencies

?Sixtypercentofcentralbanksareexploringdigitalcurrencies;14%areconductingpilottests.

?Decentralisedfinanceandprivatecryptocurrenciesarefacingcentralbankconcernsaboutunderminingtheconductofmonetarypolicy.

?Fiat-cryptocurrencyconversionandstorageareemergingopportunities.

Digitalwallets

?Useofmobilepaymentswillcontinueitsinexorablerise.(CAGRbetween2019and2024isestimatedat23%.)

?QRcode,openbankingandsuper-appproliferationwilldrivedigitalwalletadoption.

?Conveniencewilldriveusersandusagetodigitalwalletsasafirstpointofcontact—andawayfromtraditionalcard

andbankinginterfaces.

?B2Banddigitisedsupplychainsarethenextfrontiersforwallets.

Battleoftherails

?Paymentinitiationischangingfromcardsandaccountstodigitalwalletsthataresupportedbyopenbanking.

?Regulatorswillforcetheindustrytostrengthendomesticinfrastructureforpayments.

?Consumersinemergingmarketsareleapfroggingthe‘cardage’andmigratingdirectlytomobilewalletsand

account-basedpayments.

?Bothtraditionalcardnetworksanddomesticwallet

solutionswillbechallengedtoconnect‘openloop’

paymentswithcross-borderpaymentstoretainrelevance.

Cross-borderpayments

?Instant,low-costpaymentsaredrivingthereinventionofcross-borderpayments.

?Globalpaymentsstandardisationwillenablecross-borderconnectivityofdomesticinstantsolutions.

?Regionalsolutions(especiallyinAsia)andglobalnonbanksolutionsbasedoncryptocurrencyanddigitalwalletswillemerge.

Financialcrime

?Asconsumersandbusinessesadoptopenbankingandinstantandalternativepayments,organised‘fraud-as-a-service’isgrowing.

?Inoursurvey,security,complianceanddata-privacyriskswerethetopconcernsforbanksandfintechs.

?Asfinancialcrimebecomesmoresophisticated,providerswillneedtoprotecttheirfullecosystem.

Source:PwCanalysis

7|PwCNavigatingthepaymentsmatrix

1

Inclusion

andtrust

In2014,theWorldBanksetagoalunderitsUniversalFinancialAccess

programme

thatby2020,adultswhowerenotpartoftheformalfinancialsystemwouldbeabletohaveaccesstoatransactionaccounttostoremoneyandsendandreceive

payments.

Thatgoalisstillsomewayfrombeingachieved,butthenumberofinitiativesisgrowing.Oneexample:Thailand’sPromptPay,whichenablesuserstomakeandreceive

paymentsusingbankaccountsordigitalwalletslinkedtotheirnationalID,mobilephonenumberoremailaddress.

By2019,

ithadattracted43msubscribers,

inacountrywithapopulationatthetimeof69.5m.

Indevelopingcountries,financialinclusionwillcontinuetobedrivenbymobiledevicesandaccesstoaffordable,convenientpaymentmechanisms.By2025,

smartphone

penetrationwilllikelyreach80%globally,

largelyvia

uptakeinemergingmarketssuchasIndonesia,PakistanandMexico.Trustinthesesystems,particularlyas

centralbanksconsiderthefeasibilityofCBDCs,puts

newemphasisontheroleofsupervisorstoensuredataprivacyandtraceabilityforconsumersandbusinesses.

In2017,only69%oftheglobaladultpopulationhadabank

accountormobilewallet—farfromthe2020objectiveoffullfinancialinclusion.

Source:TheWorldBankGroup

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Theglobalpandemichasacceleratedthe

useofdigitaltechnology,impactingthe

morevulnerablemembersofoursociety.

Asthepaymentsindustryinnovatesatpace,wemustbemindfulthateveryoneneedstobedigitallyincluded,notjustinthefuture

butalsointhehereandnow.”

MarionKing,DirectorofPayments,NatWest,aUKbank

TheSouthAfricanpaymentsindustryhas

anambitiousplantodeliveraplatformthatenablesdigitalfinancialinclusionforcitizensandrecoveryfortheSouthAfricaneconomy.Torealisethis,wearecollaboratingwith

traditionalandnontraditionalplayers.”

JanPilbauer,CEO,BankservAfrica,Africa’slargestautomatedclearinghouse

Guidingpeoplethroughtheworldof

digitalbankingispartofoursocial

responsibility,andwearedoingeverythingwecantodeliversignificant,satisfying

results.Digitisationisawinforeverybody,butonlyifnooneisleftbehind.”

KarelBaert,CEO,Febelfin,theBelgianFinancialSectorFederation

9|PwCNavigatingthepaymentsmatrix

2

Digital

currencies

CBDCs—digitaltokensorelectronic

recordsthatrepresentthevirtualformofanation’scurrency—alongwithprivate-sectorcryptocurrenciesarepredictedtohavethebiggestdisruptiveimpactoverthenext20years(seeFigure4).Inoursurvey,financial-servicesorganisationsinEurope,theMiddleEastandAfricawithmorethanUS$5bn

inrevenuescited“marketuncertaintyandpotentialdisruption,”suchastheintroductionofCBDCs,withintheirtopthreeconcerns.

Prominentprivate-sectorexamplessuchasthe

Diem,proposedin2019byFacebookasaformofcryptocurrencythatwouldbebackedbyabasketofsovereigncurrencies,couldreplaceaccount-basedpaymentswithatokenisedsystemofnon-sovereignpaymentsystems.

Scepticismwithincentralbanksaboutthepotentialof

private-sectorcryptocurrenciestounderminetheconductofmonetarypolicymaybegintoshift,assomeplayers—Mastercard,VisaandBNYMellon—

haverecentlysaid

they’repreparedtofacilitateuseofsuchdigitalassets.Andarecent

BISsurvey

suggeststhat60%ofcentralbanksareconsideringCBDCsand14%areactively

conductingpilottests.ObserversbelievethatChinamaybethefirsttolaunchitsdigitalrenminbi—or‘e-yuan’—atthe2022WinterOlympics,inwhatcouldbeseen

asapreludetothedecentralisationoffinance.

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Figure4:ToptenterritoriesinnumberofretailCBDC(centralbankdigitalcurrency)projects

92837571717161585142

BahamasCambodiaChinaEcuadorUruguayUkraineEasternSwedenSouthTurkey

CaribbeanKorea

Note:Totalsarerebasedagainstanindexof100andaredependentontheavailabilityofdata.

Source:BIS,BankofInternationalSettlementsworkingpaperNo.880:Riseofthecentralbankdigitalcurrencies:Drivers,approachesandtechnologies,Dec2020update,andPwCanalysis

Macroforcesshapingthedigitalrevolutionmakeforanincrediblemeltingpotforinnovation,withcentralbankmoney,commercialbankmoneyandprivatemoneycompetingforashareof

consumers’wallets.”

DrArifIsmail,DivisionalHead—Fintech,

executivemanagementdepartment,SouthAfricanReserveBank

11|PwCNavigatingthepaymentsmatrix

3

Digital

wallets

Digitalwalletsallowconsumerstoloadandstorepaymentmethodsandaccessfundingsources,suchascardsoraccounts,on

theirmobiledevices.Thesewalletswillbeincreasinglyimportantasapayment‘frontend,’asexemplifiedbyApplePayandtherelaunchedGooglePay,andtheriseof

super-appsWeChatPayandAlipayinChina(seeFigure5).

Theuseofdigitalwallet–basedtransactionsgrewgloballyby7%in2020,accordingtoareportbyFIS,afinancial-

servicestechnologygroup,whichpredictsthatdigital

walletswillaccountformorethanhalfofalle-commercepaymentsworldwideby2024,asconsumersshiftfrom

card-basedtoaccount-andQRcode–basedtransactions.

Inresponse,banksandcardcompanieshavebeen

partneringwithorinvestingindigitalwalletbusinessestocreatepaymentsplatformswithscale,suchasStandardChartered’sventurewith

Toss,

thelargestpayments

companyinSouthKorea,operatedbyVivaRepublica;

andVisa’sstakeinInterswitch,aNigeria-basedpaymentsbusinessthatoperatesthemobilepaymentsplatform

Quickteller.

12|PwCNavigatingthepaymentsmatrix

Lookingahead,86%ofoursurveyrespondentsagreedorstronglyagreedwiththepredictionthattraditional

paymentproviderswillcollaboratewithfintechsandtechnologyprovidersasamainsourceofinnovation.

Forty-fivepercentofrespondentsstronglyagreedthat

therewillbeincreasedinvestmentinmobiletechnology

beyondretailpaymentstosupportB2Bpaymentsandthedigitisationofsupplychains.

Figure5:Digitalwalletsconnecttheevolvingpresentandtherevolutionaryfuture

Buynow,paylater

From

SEPA

credit

transfer

toinstant

Crypto-currencies

From

direct

debitto

request-

to-pay

Central

bank

digital

currencies

Fromthecardtothedigitalwallet

EvolutionarychangesRevolutionarychanges

Source:PwCStrategy&analysis

Customersaregoingtocontinuetoembracethewalletsthat

matchtheirpreferences—

whetherit’sthetypeofphone

theyownorhowtheybankor

eventheirlocation.Merchantsshouldthereforepreparetoofferasuiteofwalletofferingsbasedontheircustomersandtheir

demographics.”

BrianDammeir,PresidentofNorthAmerica,Adyen

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4

Battleof

therails

Behind-the-scenespaymentprocessing—the‘plumbing’ofpayments—isalso

changing,aspaymentinitiationchangesfromcardsandtraditionalaccountsto

digitalwalletsandasregulatorsforce

theindustrytostrengthendomestic

infrastructureforpayments(seeFigure6).

“Digitisationofcustomerjourneyswillfosterabattleofrailsbetweencard-andaccount-basedpayments.Successwillbelinkedtocostsbutmoreimportantlytouserexperience,flexibilityandtheprotectionthatpaymentproductsoffertothecustomer,”says

Pierre-AntoineVacheron,CEOofNatixisPayments.

Asaresult,internationalcardnetworksandcard

processors,oftenUS-domiciled,arefacingpressure

ontheircorebusiness,andhavestartedtoreposition

themselvestoretainrelevance.Outsourcingofcloudandplatforminfrastructurewillbecomeincreasinglyimportant,too.Inoursurvey,eightoutoftenfinancial-services

organisationsexpectedtooutsourcesuchinfrastructureby2025.

Theincreasingavailabilityofreal-time

paymentoptionswillfundamentallyreshapepaymentinteractionsforbothconsumers

andbusinesses—fromhowpaymentsarerequestedtohowtheyaremade,receivedandverified.Paymentswillalsocarrymoredata,sothefuturewillbeaboutleveragingdataandanalyticstocreatesmarter

customerexperiences.”

ByronVielehr,ChiefDigitalandDataOfficer,Fiserv

14|PwCNavigatingthepaymentsmatrix

Anotherissueforprocessorsandnetworkswillbe

ensuringrelevanceinthemerchantservicesspace,

wherepaymentsareinitiated.Theycandoubledown

ontheprovisionofvalue-addedservicesandbroaden

theexistingcardrailstoincludeawiderrangeofpayeeandpayerpoints.Digitalwalletproviderswilllookto

adopt‘openloop’technologiesandseekinteroperabilityinordertobenefitfrom(andnotfallbehindon)the

ongoingglobalisationofpaymentrails.

Figure6:Instantpaymentswillincreaseacrossterritories

Percentageoftotalcredittransfersthatareinstant

35%

30%

25%

20%

15%

10%

5%

0%

0123456789101112

Yearsafterintroduction

DenmarkSingaporeSwedenEUUKMexico

Source:Hartmannetal.,ECBWorkingpapers2017–19,analysedandadaptedbyPwCStrategy&

15|PwCNavigatingthepaymentsmatrix

5

Cross-border

payments

Frustrationwiththetraditional

correspondentbankingmodel,consideredbothcumbersomeandcostlyinaworldofinstant,low-costpayments,hasledtotheintensificationofnon-bankproviders.Newplayersandsolutionsarecompetingwithbank-andcard-basedsolutionsatscale,liketheP27initiativeintheNordicregion,whichintegrates27mpeopleacrossfourcountriesandcurrenciesinone‘domestic’instantpaymentsystem.

Inoursurvey,42%ofrespondentssaidtheyfeltstronglythattherewouldbeanaccelerationofcross-border,

cross-currencyinstantpaymentsandB2Bpaymentsin

thenextfiveyears.Thisexpectationisreinforcedbythe

adoptionofISO20022,agloballydevelopedmethodologyfortransmittingdatathatprovidesaconsistentmessagingstandardforpayments.

ArecentpilotbyFasterPaymentsService,ownedandoperatedbyBritishretailpaymentsauthorityPay.UK,sawthefastestpaymenteversentfromAustraliatoaUKbeneficiary:confirmationofcreditandfundswereavailableinjust36seconds.SingaporeandThailand

recentlylinkedtheirrespectivenationalsystems

PayNowandPromptPay,allowingregisteredusersoneithersystemtoinstantlysendmoneybetweenthetwocountriesusingonlyamobilephonenumber.

Aremarkableleapinblockchainanddigital

currencygrowthshowsgreatpromisein

dealingwithinefficienciesthatareinherentincross-borderpaymentsprocesses.Therefore,incomingyears,wewillseeasignificantshiftinthepaymentsarchitecturethatwillconnectpaymentssystemsacrosscountries.Such

interoperableandconnectedglobalsystemswillfurtherdriveaninclusive,sustainableandequitablesociety.”

SopnenduMohanty,ChiefFintechOfficer,MonetaryAuthorityofSingapore

16|PwCNavigatingthepaymentsmatrix

6

Financial

crime

Thepandemic’seffectindrivingincreased

e-commerceprovidedanopeningfor

fraudsters.Theaveragevalueof

attempted

fraudulentpurchasesrosebyalmost70%

in2020

fromthepreviousyear,accordingtoareportbydigitalfraudprevention

companySift.

Openbanking,combinedwithasetofnewplayersandtheshifttowardspaymentinitiationanddigitalwallets,isalsoopeningnewdoorsforalltypesoffinancial

crime.Oneexampleistheincreasedrisktoconsumersfromauthorisedpushpayment(APP)scamsacross

paymentnetworks,globally.Paymentprovidersthathelpmerchantsandtheircustomersmovemoneyacross

bordersmightalsoenablesanctionsevasionandmoneylaundering.

Inoursurvey,security,compliance,anddata-privacy

risksandrelatedissueswerethetopconcernforbanks,fintechsandassetmanagersinimplementingafully

integratedtechnologystrategy.Allthispointstothe

needfor,andlikelihoodof,greatercollaborationamong

banks,paymentprovidersandthepublicsectorin

preventingfraudandmoneylaundering,withexpected

trade-offsbetweencybersecuritymeasuresandcustomerconvenience,accordingtoarecentBankforInternationalSettlements

report.

4

17|PwCNavigatingthepaymentsmatrix

Trendingsolutions

Machinelearning–basedtools

Analyticalserviceswithmachinelearningandartificialintelligence(AI)capabilitiescanidentifyauthorised

paymentfraud.Theyencompassthespeedand

processingcapabilitiesthatarerequiredtoanalysedatainrealtime.

Riskscoringtools

Riskscoringtoolsusestatisticalmodelstoidentify

possiblyfraudulenttransactions.Riskscoringallocatesaprobabilityoffraudusingevolvingcriteria.

Muleaccountmodellingtools

Muleaccounts(thosesetupbyarealcustomerbutwithfraudulentpapersorafakeidentitytoenablecriminaluse)canbetargetedusingmodellingtoolsthatfindbehaviourpatternsinanonymouscrowdsourcedintelligencefrom

millionsofdailyconsumeractivities.

18|PwCNavigatingthepaymentsmatrix

Understandingthesetrendsiscrucial

forbanks,cardcompanies,fintechsandothersthatwanttomapanewpathto2025andbeyond.

Banksneedtoworkwithbusinesscustomerstoaidtheminintegratingpaymentsintotheirservices

directly.Thiswillhelpthemdealwithaworldinwhichincreasinglymultifunctionaldigitalwalletsandsuper-appsareproliferating.Billpaymentsandrequest-to-payorinstantcross-borderofferingscouldprovide

opportunitiesforsomelargerbanks.

Cardprocessorsmightneedtoconsidermovesthat

positionthemmoreeffectivelyforpaymentsinitiation,suchaspartneringwithsignificantdigitalwallet

providers.Inthisway,theycanensurerelevancein

themerchantservicesspace,wherepaymentsare

initiated.Processorsalsoneedtobridgethecard-andaccount-basedpaymentworldsandadoptcloudandAItechnologiestoavoidbeingovertakenbyanew

generationofcloud-basedsolutions.

Paymentservicesprovidershavetoworkonensuringtransparentglobalstructuresandcreatingtrustandvisibilitywithregardtoclientacceptance,theirabilitytobearcreditrisk,andefficientglobalsupervision

structures.Theyalsoneedtofullymasterdatatowinintheraceforglobalscale.

Centralbanksandsupervisorswillneedtoimprovetheirknowledgeinordertoprovideeffective

supervisionofincreasinglyglobalplayersthatarenotbanks(seeFigure7).

Theriseinmobilepaymentswillput

ever-higherpremiumsonuserexperien