Global Trends in The Cards and Payments Industry 2020

GLOBAL
TRENDS IN THE
CARDS AND
PAYMENTS
INDUSTRY
2020
2 | Global trends in cards and payments industry 2020 External Document © 2020 Infosys Limited
Contents
Foreword........................................................................................................................................................................................... 4
New payments ecosystem on real-time payment rails.................................................................................................... 5
Embedded, ubiquitous and standardized payments......................................................................................................10
AI- and Ml-led digital transformation...................................................................................................................................15
Technology innovation to scale up payments offerings................................................................................................20
Embracing innovative fintech business models...............................................................................................................24
Product innovation-led differentiation in payments offerings....................................................................................29
References.......................................................................................................................................................................................34
Infosys contributors.....................................................................................................................................................................37
External Document © 2020 Infosys Limited Global trends in cards and payments industry 2020 | 3
Foreword
New technology and competition startups have used distributed
from fintechs have rapidly ledger technology to reduce costs
disrupted the financial services and increase reward program
industry, especially cards interoperability across merchant
and payments. Payments chains. Such initiatives increase
are increasingly ubiquitous, consumer adoption of loyalty
embedded, standardized, programs and brand stickiness.
Rajneesh Malviya and secure, reducing friction
The rapid adoption of real-
Senior Vice President, in processing and ultimately
time payments has fueled that
Financial Services, Infosys transforming the customer
transformation worldwide,
experience.
including across borders. With
Global Trends in the Cards more than 50 real-time payment
and Payments Industry 2020 schemes now live globally,
analyzes this new ecosystem of companies are focused on
real-time payments, including building overlay and value-added
ways to scale solutions, simplify services for all segments. Firms
payments, and monetize data. are also investigating innovative
The report also provides insights business models that tap into
on how industry players are unmet consumer demand and
transforming their businesses allow incumbents to fend off
by utilizing technologies such as disruption by fintech companies.
distributed ledger, cloud, artificial For instance, traditional banks
Ashok Hegde intelligence, machine learning, have explored peer-to-peer
Vice President, big data, digital, conversational lending, noncard lending at the
Financial Services, Infosys commerce (e.g., smart speakers), point of sale, and escrow services
wearables and analytics. for consumer digital commerce.
These trends and technologies The 2020 edition of this report
have profoundly changed the covers these industry trends, and
cards and payments industry. more, which we believe will play
With resiliency powered by out in the next few quarters. We
cloud computing, transaction offer this analysis to you to help
processing platforms can now guide you through cards and
handle spikes in traffic and payments decisions.
ensure banks stay open 24/7.
The rapid growth of cross-border
e-commerce and expansion of
global operations makes the
Vijay Anand concept of peak and lean hours
Head, Cards and Payments, in bank IT platforms less relevant.
Financial Services, Infosys Industry leaders and fintech
NEW PAYMENTS ECOSYSTEM ON REAL-TIME
PAYMENT RAILS
The adoption of domestic and cross-border real-time payments has risen rapidly across the globe.
There are 54 real-time payment schemes that are live globally, with many planned in the near future (see
Figure 1). Industry estimates project the real-time payment market to grow at a compound annual rate of
between 50% and 80% from 2018 to 2023.
Trend 1: Rapid rise of real-time payments

With technological and business • Use additional optional services • Design layered architectures
advancements, real-time (AOS) to cater to country or with core settlement layer,
payment schemes are also region-specific needs overlay services and AOS
evolving. The focus of institutions • Use extended remittance • Industry participation in
governing real-time payment information to promote use defining the payment message
scheme rules are focused on key cases in business-to-business guidelines and overlay services
tenets, such as: (B2B) payments • Sandbox environment for
• Move from net or deferred fintech startups to connect
• Support digital payments settlement mechanisms to real- and test real-time payment
and new modes of payment time settlements platforms using APIs
initiation – e-channels, wallets,
• Enable the use of aliases and
third-party providers, etc.
addressing services
• Adopt ISO 20022 message
formats for end-to-end
payment flows
Figure 1. Real-time payment schemes are increasing across the globe
Sweden – BIR
2012
Denmark – Straksclearingen Poland – Express ELIXIR
2014 2012
Czech Republic – RTPE
Iceland – Greidsluveitan 2018
2001 Norway – Straksbetalinger
2019 South Korea – HOFINET
P272 2011
SEPA EU1 – SCT Inst

Canada
UK – FPS
2008
Switzerland – SIC Hungary
1987
Romania – PlatiInstant
US – RTP 2018
2017
Turkey – RPS China – IBPS
2012 2010 Japan – Zengin
1973
Bahrain – Fawri+ Taiwan – CIFS
2016 Saudi Arabia 1995
Mexico – SPEI 2019 Hong Kong – FPS
2004 ARPS India - IMPS 2018
(covering 22 2010 Thailand – Prompt Pay Vietnam
Arab countries) 2017 Cambodia - FAST
Philippines – InstaPay
Colombia Sri Lanka - CEFTS
2014 2018
Ghana – GIP Malaysia - RPP ASEAN’s RTP

2016 Kenya – PesaLink 2018 (covering 10 countries)
Brazil – SITRAF 2017
Peru Nigeria – NIP Singapore – FAST
2002 2014
2011
Indonesia - TBD
Australia – NPP
Chile – TEF 2018
2008
South Africa – RTC
2006
1
SEPA EU Countries (22) live with SEPA SCT Inst- Austria, Belgium, Bulgaria, Croatia, Cyprus, Estonia, New Zealand
Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Monaco, the
Netherlands, Portugal, Slovakia, Slovenia, Spain
1
P27 (4) Sweden, Norway, Denmark and Finland
Live Upcoming
Source: Infosys
SWIFT gpi has significantly payments and have been a huge Open banking APIs will help
improved cross-border payments success with retail and corporate unlock the value of
processing across the existing payments (see Figure 2). real-time payments.
correspondent banking network.
The immediacy factor in real-time
SWIFT has done successful trials
with gpi and domestic real-time
Recommendations for real- payments and the large volumes
payment schemes for real-time time payments adoption of data generated require
scalable IT systems for processing
cross-border payments. Apart Real-time payments provide a and storage. This need will be
from the industry initiatives, platform for institutions to make amplified by open banking and
traditional players and fintech the user payment experience indirect participation models.
startups also offer real-time more valuable, and ensures Cloud-based offerings can be
payment services. Blockchain- 24/7 availability and real-time considered for varying volumes,
based technology companies settlement. For institutions, lower costs, greater availability
like Ripple are offering instant the real value lies in leveraging and compliance requirements.
cross-border payment services. opportunities to monetize real-
The company leverages its time payment rails by developing The ability to receive or transfer
advanced blockchain technology overlay services. These include money on a real-time basis
RippleNet to reach trusted P2P payments, request to pay, requires the existing payment
institutions across the globe. payment aliases, Confirmation infrastructure to be significantly
Fintech startups like Zelle, Interac, of Payee, liquidity management upgraded. Financial institutions
Transfast and Earthport offer real- solutions and cross-border P2P. without a significant market share
time domestic and cross-border
in payments offerings are most and handle large volumes of support end-to-end payments
likely to use a targeted approach the payments data that will processing including connectivity
that will help them meet customer be generated. to scheme processing systems.
expectations and regulatory Fintech startups offer P2P,
demands without completely
overhauling their technology.
Solutions for real-time contactless payments and
merchant payment solutions by
Many of these banks will pursue a payments connecting multiple networks and
solution that will not only coexist The ubiquitous impact and services, or offer their platforms as
with their existing payments potential of real-time payments a service to enable domestic and
infrastructures and comply with have encouraged most cross-border real-time payments.
the new real-time payments players in the industry to offer Some of the solutions support
scheme, but also be cost effective. services including platform, specific functions within the
Partnerships are key for channels, payment solutions, whole value chain, such as the
institutions to develop use cases, routing, connectivity channels, liquidity and cash
innovative use cases and to and integration. management, personal finance
have a technology platform that Real-time payment solutions management, sanctions, API
enables the adoption of real- powered by the big tech connectivity, integration to social
time payments. With a Payments companies are used by financial media or e-commerce sites, and
as a service model, technology institutions either as a service or point-of-sale (POS) capabilities.
companies will own a majority deployed within a cloud-based Big tech companies leverage
of the payments processing environment. These solutions their leadership position in the
Figure 2. Fintech startups lead in offering real-time payment services
Big tech Fintech startups Tech giants Messaging Card networks

companies networks
• ACI worldwide • BELLIN • Jiffy • Rapyd • Amazon • SWIFT gpi • American
• Finastra • Bambora • Klarna • Rapid Financial • Facebook Express Serve
• FIS • BillingTree • Ledge solutions • WeChat • Visa
• Fiserv • boon • Montran • Real Time Debit • Baidu • Mastercard
• ProPay • Briisk • Moneris • Remitly • Google
• Temenos • bpc • Nets • Ripple • Alipay
• Volante • Buckzy • NYCE • REPAY
• bunq • Nubank • SatoshiPay
• Chillr • Obopay • Square Cash
• Checkbook • Ozow • Stripe
• Curve • Payment data • TransferMate
• DiPocket systems Global Payments
• Direct Site • PayFi • Venmo
• Earthport • Payoneer • Verse
• Enservio • PayPal • Worldline
• Inpay • PayPie • Weezzo
• Guru • Payscout • Wyndy
• IntegraPay • Pelican • Yapstone
• Interac • Pungle • ZOOZ
• Justpay • Quickpay • Zelle
Source: Infosys
social media and internet space to time payments; for example, the to fill the gaps left by other
promote real-time P2P payments Visa acquisition of Rambus and players, offering services that
integrated with their chat facilities Mastercard acquiring the real- enhance the customer experience
or as a separate payments time payments unit from the Nets and leveraging opportunities
app. Credit card networks are Group. The real-time payments for monetization.
acquiring specialized players, and market is crowded with multiple
expanding their horizon in real- technology providers trying
Trend 2: Real-time cross-border payments

Global trade and e-commerce are operate globally. Firms like Recommendations for
driving the demand for quick or Amazon, Uber and Airbnb
real-time settlement of payments, enable international B2B and leveraging real-time rails
within and across borders, which C2B payments by giving retail for cross-border payments
is at an all-time high. With over customers and businesses the
Similar to the Nordic banks
30 countries having their own opportunity to spend and shop
that have stepped in to create
domestic real-time settlement across borders.
P27, a first-of-its-kind, real-time
mechanisms (TCH in the US, NPP
However, cross-border real- cross-border payment network,
in Australia, NAPAS in Vietnam,
time payments face hurdles to there is an opportunity for
etc.), there is a need to interlink
meet fraud risk and regulatory global banks to explore options
these domestic clearings and
mandates. Cross-border payments to build similar networks or
develop a seamless near-real-time
involve currency conversion connect to upcoming networks.
cross-border payment experience.
and managing exchange rates, Ongoing projects by regional
SWIFT’s gpi platform is moving in
which add to its complexity. and economic cooperative
this direction.
Corporate firms and consumers organizations include the Arab
The movement of people demand greater visibility and Regional Payment System (ARPS)
across borders is increasing transparency while making by the Arab Monetary Fund and
the transfer of remittances international payments. To reduce the BRICS (Brazil, Russia, India,
across countries. A 2018 World reconciliation errors, businesses China, South Africa) payment
Bank report highlights that are favorably considering a real- system. Interoperability and
remittance transfers worth time tracking system. Higher risk assessment are constraints
US$689 billion were made and infrastructure costs, difficulty when it comes to settling
these are expected to grow in achieving cross-border payments across international
larger. In India, for instance, interoperability and the risk of borders. The adoption of ISO
remittances account for 2.9% customer acceptance are some 20022 by banks globally makes
of gross domestic product. The of the factors restricting banks it imperative to send and receive
huge volume of cross-border from developing cross-border standardized payment messages
remittances is another factor that real-time payments offerings. worldwide. It provides banks with
drives the demand for real-time However, a majority of the banks interoperability and the ability
cross-border payment transfers are yet to collaborate with fintech to carry richer data and achieve
and settlements. E-commerce is innovators to make strides in straight-through processing.
another area where cross-border cross-border payments and
The availability of richer data will
payments are required. Nearly leverage alternative payment
be key to alleviating challenges
15% to 20% of e-commerce methods offered.
faced in fraud management and
transactions are international,
compliance regulations related
as e-commerce marketplaces
to cross-border payments.
These challenges are expected cards. With cross-currency real- Platform (NPP) for domestic
to increase as cross-border time payments, travelers can do clearing in 18 seconds and a trial
payments are made in real time. away with maintaining multiple using Singapore’s FAST system
Banks should leverage AI and currency wallets or accounts. wherein a cross-border payment
ML for sanctions screening and was settled in 13 seconds are
fraud screening mechanisms
to enable reliable, smarter and
Solutions for real-time examples of cross-border real-
time payments using SWIFT gpi.
quicker processing of cross- cross-border payments
Visa and Mastercard leverage their
border payments. This would lead With the increased focus on card networks for processing push
to increased straight-through alternatives to the legacy payments into card accounts.
payments, resulting in less correspondent banking system Visa Direct and Mastercard
manual intervention, and help in and demand for real-time MoneySend offerings have been
bringing down the effective cost payments across borders, many available in the marketplace
of payments. Banks can leverage fintech companies have come for quite some time and are
SWIFT gpi to send funds overseas up with their own solutions. targeted toward the domestic
and benefit from end-to-end Ripple provides a cross-border as well as cross-border payment
tracking, improved service levels real-time payment network needs of consumers and small
and credit confirmation. With the based on distributed ledger and midsized businesses. New
involvement of fintech startups technology across more than 40 partnerships are evolving with
like Ripple in the cross-border countries for banks to transfer remittance companies teaming
space, there is an opportunity for funds across borders. Ripple up with the card networks.
banks to collaborate with fintech recently crossed the 300 clientele Remitly has collaborated with
companies and leverage their mark, which includes banks, Visa Direct to allow its US clients
platforms and service offerings financial institutions and payment to do real-time cross-border
to meet client cross-border providers. Other industry players fund transfers to Visa debit cards
payment needs. have come up with blockchain- using a credit push mechanism.
Real-time cross-border payments based cross-border payments Bank of Montreal has teamed
can be leveraged to support offerings. Visa B2B connect (based up with Mastercard to provide
several use cases in retail and on distributed ledger technology) faster global payment services to
corporate payments. Real- and IBM Blockchain World Wire its clients based on Mastercard’s
time payments would provide (based on blockchain technology MoneySend service.
corporations with the ability to and the Stellar protocol) are
request on-the-go payments examples of such initiatives.
across borders. This will help SWIFT has come up with its own
reduce credit risk and payment solution to connect SWIFT gpi
fraud. Global businesses can offer with domestic real-time payment
their suppliers and customers clearing systems with the help
better invoicing terms, reducing of domestic banks. With this
working capital needs. This integration, SWIFT aims to
increases transparency, as all leverage SWIFT gpi, its existing
business stakeholders can track cross-border network, and
the status of payments in near domestic real-time payment
real time. Cross-border real-time systems to enable banks to
payments can become a game- send and receive cross-border
changer in the travel and tourism payments in near real time. The
industry, which is currently delivery of funds between China
dependent on travel and prepaid and Australia using New Payments
EMBEDDED, UBIQUITOUS AND
STANDARDIZED PAYMENTS
Splitting or decoupling of payment instruments (cards) and accounts (sources of fund) has been gaining
ground. Digital wallets have accelerated this split. This will increase the dematerialization of cards as card
numbers get to kenized and stored in wearables.
Digital payments are expected to reach US$15 trillion globally by 2022. With digital payments being
embraced across the globe, fintech startups and traditional firms are looking for innovative products to
reduce friction in consumer payments and improve customer experience.
Trend 3: Digital payments

Sound-wave-based digital number and transaction amount. capabilities. Smart speakers can
payments This is a contactless payment receive voice instructions from
Ultrasound is sound waves with method and can be done using consumers and execute mundane
frequencies higher than the upper a mobile phone. It does not tasks. Going one step further,
audible limit of human hearing. require an internet connection Amazon has facilitated payment
It has been used for various or bluetooth hardware. Software transactions using Echo (Amazon’s
needs such as detecting objects, needs to be installed on a mobile smart speaker) and Alexa
measuring distance, medical device that communicates (Amazon’s digital assistant); Alexa
imaging and nondestructive (using sound waves) with similar can execute the payments using
testing. Ultrasound waves can software or a tag at a merchant’s the Amazon Pay wallet tied to
be used to process payments at outlet. The rest of the payment the device. An illustration of how
retail outlets or physical points of processing is similar to existing a payment is made using Alexa:
sale. Mobile devices can use their industry standards. the user gives a voice instruction
built-in speaker to transmit sound to the device asking for a bill to
waves to a receiver, which uses a
Voice (smart speaker)-based be paid. The device verifies the
digital payments Amazon Pay wallet balance and
standard microphone to receive
the waves. These sound waves Tech giants like Google, Amazon asks for the authorization PIN
carry transaction details such as and Apple have launched smart (each Amazon Echo speaker has
merchant name, payment account speakers with digital assistant a PIN for user authentication).
The user provides the eliminate the need for consumers as innovation of form factors or
credentials via voice instruction. to remember passwords. Apple innovation in ways in which a
On successful validation of the Pay popularized the usage of transaction is initiated. Consumer
credentials, payment processing fingerprint authentication for mindshare is increasingly
is completed like a normal online payments. Other biometric captured by digital front ends, and
transaction. Currently, only low- methods of authentication such the payments service providers
value transactions are allowed as facial, voice and vein pattern may eventually get eclipsed
with this method. recognition are gaining ground. by these digital front ends. The
emergence of QR code-based
Wearable payments Cryptocurrency wallets payments in China is a case
As merchant terminals with Digital wallets that enable in an example.
contactless payments capabilities storing and transacting using Alipay and TenPay are QR code-
have become commonplace, cryptocurrencies like bitcoin based payment providers that
consumers are embracing are becoming quite popular. dominant digital payments
wearables to fulfill their In the cryptocurrency wallet, in China. They both leverage
payment needs. Wearable-based digital currency is stored in the consumers’ mobile phones to
payments are gaining ground blockchain. The wallet interacts enable a frictionless payment
in Europe and China. Wearable with the blockchain and assists experience. There is no fund
payment technology works on in transacting using the digital stored in the digital wallet and
similar lines to that of near-field currency. The public and private the transaction amount is fetched
communication (NFC) mobile keys are held by the user. The from the bank account during
payments. Instead of a mobile public address is known to the transaction processing. Alipay and
device, a customer can use a user community and wallet TenPay have expanded their share
smartwatch, bracelet, fitness provider. The wallet holder is of consumers’ wallets by offering
band, ring or any jewelry to identified by a public address. consumer loans, investment
pay. The wearable devices have When other users transfer digital advisory services, money market
payment credentials embedded in currency to a public address, instruments, etc. Due to their
them. They communicate with the the private key on the wallet is dominant market share, they have
merchant POS terminal or other used. The wallet authenticates demoted Chinese banks to only
compatible devices and complete using the public and private keys. provide value storage rather than
the transaction processing in less On successful authentication, financial services. Banks continue
than a second. Wearables provide the transaction is processed. to bear the cost of compliance,
enhanced convenience and ease Cryptocurrency is stored not in running bank branches and other
of usage, without compromising a wallet but on the currency’s operational costs, while digital
the security associated with blockchain. The wallet acts as an players have started to eclipse
contactless payments. interface between the user and them to the extent that banks
the corresponding blockchain. may end up being “dumb pipes” in
Biometrics-enabled digital
the digital economy.
payments
Recommendations for UPI-based payments have grown
NFC mobile payments wherein
a mobile phone is used to
digital payments at a rapid pace in India, thanks
authenticate a user’s fingerprint, Millennials’ and Gen Z’s propensity to mobile app offerings from
have made biometrics technology for mobile has led to fast adoption fintech players such as Google
commonplace in retail payments. of mobile payments across the Pay, PhonePe and Paytm. The
Biometrics such as a fingerprint, globe. Evolving trends in digital UPI design connects mobile
iris or face scan make payments payments such as voice-based apps from any service provider
safe, secure and fast, and also payments or wearables appear (fintech startup or bank) to any
bank account. Though banks had couple of years, voice-based ToneTag offers sound-wave-based
launched their own mobile apps payments are expected to gain payment technology to retail
for UPI, consumer adoption of market share for low-value merchants. It can work without
apps launched by fintech startups payments. Offerings such as the internet and payments can
was far higher. This underscores P2P money transfer using voice be made using only a feature
the need for banks to stay commands will heat the market phone. In India, retailers like
focused on digital offerings to for players such as MoneyGram, Shoppers Stop and digital wallets
stay relevant in the minds of PayPal and Venmo. such as MobiKwik leverage
millennials and Gen Z. ToneTag’s offering. Globally, about
Atomic wallet, Bread wallet,
400,000 merchants are using this
Banks can tap into their Mycelium and Exodus are few
technology, with higher traction
knowledge of customers’ digital cryptocurrency wallet offerings
seen in the Middle East and Asia.
preferences (for example, the available on mobile, desktop
As no internet or NFC or bluetooth
use of smart speakers) and and cloud-based formats. In
hardware is required, it is suitable
technology like biometrics to Europe and the US, there is no
for usage in geographical areas
reduce friction in payments regulatory bar on dealing with
where internet penetration is
processing, improve customer cryptocurrencies. However,
low and customers cannot afford
experience, enhance engagement in some Asian countries,
smartphones.
and ensure stickiness. With the cryptocurrency trading is not
amount of data available to banks, approved, and the evolution Apple Pay transformed the NFC
they have a bigger opportunity of the cryptocurrency wallet mobile payments market and built
to understand consumers’ is limited in such markets. itself a unique value proposition
preferences and financial needs. Regulatory frameworks will in terms of consumer convenience
Insights gained from digital continue to a key factor in and payments security. The Apple
interactions will enable banks determining the success of smartwatch enables wearable
to customize their products and cryptocurrency wallets. payments and supports the Apple
launch new offerings to meet the Pay digital wallet. To enable wider
In China, fast-food chain KFC has
emerging needs of millennials adoption of wearables, players
introduced a facial recognition-
and Gen Z. such as Xiaomi, Fitbit and HTC
based payment system called
offer payments capability at a
“Smile to Pay.” It links users’ faces
Solutions for digital to their Alipay accounts. Alipay
reasonable cost for their devices.
This has boosted wearable
payments is one of the most widely used
payment usage in markets
digital wallets in China. Users can
Amazon’s Echo-powered Alexa like China.
execute a payment by interacting
voice command payments are with a self-service kiosk for
well integrated into Amazon’s payment processing. Mastercard
retail ecosystem. The Google has launched a “selfie-based
Home speaker, powered by the payment” pilot in Europe that
digital Google Assistant, offers authenticates payment by clicking
voice-based payment features. a selfie instead of entering
Google has teamed up with a password.
Walmart to bring thousands of
Walmart products into the voice
shopping mode. Over the next
Trend 4: ISO 20022 adoption in payments
From low-value retail payments to Recommendations for Coexistence approach – a
large global business transactions,
financial messaging is the heart of accelerating ISO 20022 first step toward ISO 20022
all payment operations. ISO 20022 adoption adoption
is a global standard for financial
As various central banks and A structured migration approach
payment messaging that provides
payment authorities are coming that allows a legacy format to
a standardized approach and
up with regulations on ISO 20022 be in use while ISO 20022 is
methodology to be used across all
adoption, banks and financial leveraged for specific schemes is
payment messages and networks
institutions are working to recommended. The coexistence of
It provides for richer metadata
embrace ISO 20022. SWIFT has message formats enables multiple
on payment transaction details
projected this transition to occur message formats to be used for
than do traditional messages used
over a four-year period. This various payment schemes. The
for payment transfer. The XML-
provides financial institutions with simplest way to achieve this is by
based framework of ISO 20022
sufficient time to prepare and mapping the existing proprietary
allows more information to be
plan for the implementation of messaging formats to their
sent through payment messages,
ISO 20022. Critical success factors equivalent SWIFT MX messages.
which improves the operational
that will help banks adopt this The mapping can be built using
efficiency.
standard seamlessly include: the business logic of the messages
The payments industry currently • Create an impact assessment at the interface layer. For example,
uses various legacy proprietary with a long-term view in mind the ISO equivalent of MT101 is
messaging formats that limit Pain.001, while that of MT900
• Plan the adoption sequence for
innovation and collaboration is CAMT.054. An alternative
various payment schemes
among financial institutions. This approach is adoption based on
• Ensure that any new payment message type, and this approach
also leads to higher infrastructure
scheme to be introduced in the gives flexibility to financial
and operational costs ISO
market is ISO 20022-based to institutions to initially adopt ISO
20022 adoption provides banks
avoid duplication of efforts 20022 based on the message type
and financial institutions with
flexibility and accuracy through a • Plan for implementing the or its attribute.
syntax-independent and flexible required technology and
framework. It promotes users interface changes
creating payment message • Educate technical and
models that break cross-border operations resources on the
barriers and support global new messaging format
business operations.
Participants may choose to global usage guidelines for ISO A report on ISO 20022 migration
migrate to ISO 20022 messages 20022 adoption. The adoption by SWIFT highlights that most of
only for some specific business will gain further momentum the domestic systems, including
processes in payment processing due to key initiatives such as real-time payment systems
while retaining their existing the European Payment Council’s and high-value real-time gross
legacy message formats for Single Euro Payments Area (SEPA) settlement schemes, have
other message types or business offerings, the UK’s New Payment announced plans for migration
processes. For example, migrating System Operator’s introduction of to ISO 20022. SWIFT expects
only outward payments for the New Payments Architecture 80% of high-value payments
settlement to ISO 20022 while and the US Federal Reserve and its to be migrated to ISO 20022 by
continuing to receive payment clearinghouse’s focus on real-time 2023. For cross-border systems,
messages from clearing in payment initiatives. most banks plan to complete
proprietary standards. This gives MX message adoption by 2023.
ISO 20022 being a standard XML
financial institutions the flexibility The study points out that only
and global messaging format
to divide the payment traffic 25% of the 148 high-value
will help banks generate richer
based on message attributes such payment systems across the
structured data. Over time, all
as account type and payment globe have already adopted ISO
segments of financial settlements,
type. Banks need to build a set of 20022. However, a widely used set
from payments to securities, will
API libraries for business processes of high-value payment systems
use ISO 20022 standards, which
where complex orchestration is are expected to adopt MX-based
will improve the efficiency of
present. The API layer can handle ISO 20022-compliant payment
message communication and
the required message translation. messages by 2023. These payment
optimize the operational and
Banks with low payment volumes systems cumulatively handle 87%
infrastructural costs. The Trace
and those that use a limited set of of high-value payments globally
Transformer by Trace Financial
payment schemes can consider in terms of payments value. Most
and the Swift Funds Migration
transforming their functional flow European and Asian countries
Accelerator by Volante are
for ISO 20022 adoption. have adopted the MX-based
examples of service offerings from
global standard for high-value
payment messaging solution
Status of payment scheme providers that enable banks
payments, and the rest of the
regions are gearing up as well.
adoption of ISO 20022 to accelerate their ISO 20022
adoption. Payment gateway
Regulatory boards and SWIFT providers to various central banks,
have started various initiatives to such as CMA, ProgressSoft and
encourage banks and financial Flywire, have launched offerings
institutions to migrate to ISO for ISO 20022 transformation for
20022. SWIFT has come up with their clients.
the Cross-Border Payments and
Reporting initiative to develop
AI- AND ML-LED
DIGITAL TRANSFORMATION
Banks are using AI and ML to redefine the customer experience and gain insights from payments data. Natural
language processing leverages AI capabilities to convert speech to text and to generate text. Chatbots are
increasingly used in cardholder servicing because they can automate the handling of routine customer queries,
and allow the customer service representatives to focus on complex servicing requests.
Trend 5: Artificial intelligence and machine learning in cards

Cognitive robotics process used in areas such as account “Self-driving” banking focuses on
automation (RPA) is AI-related opening, collections, dispute automated banking processes
technology that enables the management and cardholder that enables bank accounts to
banking industry to automate servicing. Complex ML algorithms “drive themselves.” Self-driving
banking processes that are used for fraud management banking is expected to evolve to a
involve manual intervention and anomaly detection in card stage where it can make decisions
by back-office personnel to transaction processing. on behalf of customers based on
pull information from multiple customer consent and data.
Computer vision leverages
applications or data sources. RPA
AI for automatic extraction,
can be applied to a wide range
analysis and understanding
of use cases in banking including
of useful information from
retail branch banking, commercial
images. This helps to review
lending, consumer lending, loan
documents related to legal and
processing, underwriting, anti-
regulatory compliance.
money laundering (AML), etc. In
the cards industry, RPA has been
Recommendations for needed to solve complex business complex with the widespread
problems. More importantly, adoption of digital technologies
leveraging AI and ML insights gained through AI and and the increase in technology
for cards ML initiatives should be made complexity. While fraudsters will
available in near real time to front- continue to mount cyberattacks,
Rapid improvements in
end staff for their decisioning. ensuring platform security is
computing power, decline in the
This ensures these gains are critical given the laws governing
cost of computing and storage,
amplified across functional areas, customer data privacy and
availability of abundant data
various operational silos and the financial value of insights
and advances in algorithms have
geographical teams. generated by AI and ML initiatives.
enabled increased adoption of
AI and ML. These technologies
Focus on processes and Regulatory compliance
should be viewed as technology
methodologies Leveraging AI-powered RegTech
enablers, whose benefits can be
fully accrued only if the required A clear definition of an solutions enable banks to
methodologies, processes and enterprisewide data strategy overcome regulatory compliance
governance mechanisms are put will provide a set of directions to challenges. AI and ML enables
in place. various teams working on AI and cost reduction and improves
ML initiatives. Data governance proof of compliance. These
Align technology strategy with processes are standard to meet initiatives themselves could
business goals regulatory compliance related come under regulatory scrutiny
Banks need to align their AI to customer data privacy. Using given the regulations in the
and ML technology strategy the data lake approach to have customer data privacy domain.
with an enterprise-level road a single, consolidated data Data insights gained through data
map of business use cases. repository will enable banks collected or stored in a manner
A clear definition of use cases to have a 360-degree view not compliant with regulations
and use case prioritization of customers, business and and actions arising from those
based on expected benefits are processes. Having a common insights would attract regulatory
prerequisites for any initiative in set of tools for data extraction, scrutiny. Therefore, a robust data
AI and ML. It is also imperative analysis, insight generation and governance model is imperative.
that the technology strategy be data visualization will avoid
aligned with a bank’s game plan duplication of efforts across Employee displacement
for pursuing differentiation or multiple teams, business units Nearly half of all banking jobs will
excellence in various domains. and geographically spread teams. be technically and economically
Well-defined key performance doable by AI and automation
Foster a culture of learning and indicators will ensure the over the next couple of years.
collaboration objectives of the AI and ML Self-learning algorithms’ without
Banks can leverage digital initiatives and expectations of any supervision will ensure
learning platforms to enable a benefits are clearly articulated to technology can do most things
culture of continuous learning in the wider teams involved. that humans can do. With the
AI and ML for their business and possibility of humans becoming
technology teams. A collaborative Critical success factors in redundant and the workforce
team of technology experts and
business knowledge is essential
AI and ML initiatives displaced, a comprehensive
approach to tackling the
for successful AI and ML initiatives. Cybersecurity outcomes is necessitated.
Business system analysts can Retraining employees ensures that
act as the bridge between the Technology platforms form the the impact of job displacement
technology and the business core of the banking and payments due to AI and ML is reduced to the
team. Cross-functional teams processing industry. Managing minimum.
working collaboratively are cybersecurity has become
Explainability of AI models demographic profile, transaction by more than 500,000 new users
data, earlier reward redemptions per month. Erica supports 400,000
With various decisioning related
and other financial parameters to ways in which clients can ask
to application processing or
identify the most suitable reward financial questions. It also notifies
loan sanctioning, credit limits
offers for the customer. users about infrequent, abnormal
and collections being done
charges and about any increase in
by algorithms, explaining the American Express offers a
a recurring charge.
rationale behind such decisions personalized travel solution to its
becomes important. An inability customers through Mezi (acquired State Bank of India (SBI) Cards
to explain why a loan or a by Amex in 2018), an AI-powered has leveraged RPA to automate
transaction was declined will personal travel assistance app. the follow-up process under
lead to customer dissatisfaction. Customers can send a text with chargebacks for disputed
Self-learning algorithms run the their request for reservations for transactions. The RPA bot
risk of being labeled as biased flights, hotels, restaurants, etc., automates customer follow-ups
based on gender, age or race if and Mezi provides personalized to collect evidence and inputs for
the decisions made cannot be recommendations and makes the proper classification of disputes.
logically explained to customers. necessary travel arrangements. SBI Cards has benefited from
With the growing advent of the reduction of 700 man-hours
Bank of America’s chatbot, Erica,
self-learning algorithms, the of effort per day due to the
is available to mobile banking
risk of being unable to explain RPA initiative.
customers and has over 27
the algorithm model increases, million active users. Customers
thereby making banks vulnerable can interact with Erica in three
to public scrutiny. different modes – voice, tap and
text. Erica can assist with money
Solutions that leverage transfers, transaction searches,
AI and ML for card account balance inquiries and
financial management. Financial
payments management capabilities include
HSBC leverages customer and Spend Path, a FICO score tracker,
transaction data to customize a subscription monitor and bill
product offerings, improve reminders. Erica studies people’s
risk profiling and automate situations and behaviors and
compliance initiatives. The bank offers proactive guidance and
also uses AI to deliver relevant insights to help customers stay
rewards and loyalty offers to connected with their cash flow,
customers and has seen higher to avoid surprises and identify
rewards redemption rates savings opportunities. It has
based on the AI-generated completed over 50 million client
recommendations. The AI requests and has been engaged
model analyzes a customer’s
Trend 6: Payments data monetization
Payment System Directive 2 analytics can be used for real-time to build innovative products and
(PSD2) regulation and open decisioning in cross-sell or upsell services. The data strategy, in
banking initiatives across the initiatives, reward offers, customer addition to the data privacy and
globe are opening access retention, etc. compliance regulations, should be
to payments data for third- the guiding force to handle data
Monetizing data will require
party providers. ownership disputes.
organizations to be cognizant
Growth in data monetization of data privacy and compliance
adoption is driven by the regulations when harvesting Solutions that monetize
continuous increase in enterprise- data, storing data, manipulating payments data
level data; the rise is leveraging data for commercial usage,
big data technologies and etc. Organizations that plan to Banks and payments industry
awareness of potential benefits monetize payments data should players can leverage data analytics
in adopting data monetization have a well-defined data strategy firms whose service offerings
solutions. But data privacy and in place. Data can be categorized come with built-in capabilities
security regulations are significant as raw (containing personally for compliance with data privacy
constraints for market adoption of identifiable information, PII), regulations and best practices in
data monetization solutions. anonymous (PII is removed) or data security. This enables banks
synthetic (cannot be tracked to to pursue data monetization
Challenging regulatory initiatives by leveraging large
original data set). Organizations
requirements and competition volume of in-house data
must evaluate the risk and
from fintech startups have led along with data sourced from
compliance issues inherent in
to increased competition in external sources.
certain data types. They can then
payments businesses. Banks
choose to either: commoditize Arm INSIGHT offers products to
have started to look beyond the
the anonymous or synthetic synthesize data (ARM Mimic)
traditional payments service
data, build new products for and ingest external data (ARM
offerings and embrace data
their customers using raw or Refinery) – these offerings can
monetization to grow their
anonymous data or innovate to be used to gain insights and
revenue. Banks are using data-led
create new revenue streams from capture business value from data
insights to improve their existing
the anonymous or synthetic data. troves. ARM Mimic allows banks to
business models and create new
Organizations can opt to use synthesize data while maintaining
revenue streams by launching
internal data or combine existing the statistical relevance required
innovative products and services.
customer data with data sourced to gain necessary insights from
from external vendors to gain the data. It synthesizes data within
Recommendations for new insights that help create new data privacy constraints and
monetizing payments data products or revenue streams. enables innovative and creative
Payment providers with a data monetization programs. The
Banks are better positioned to
presence in both the card-issuing ARM Refinery data engine allows
monetize payments data to
and merchant-acquiring spaces financial institutions to ingest data
generate new revenue streams
have access to both consumer from different sources, aggregate
as they have a comprehensive
and merchant data. Payment and transform the data to get
view of the customer’s profile.
providers with a presence in actionable insights, and upload to
Differentiation lies in creating
one business can develop any database or cloud platform.
valuable products and services
from payments data available partnerships with players in the
in-house combined with data other leg of the business. They
sourced from multiple external can further combine externally
parties. Insights gained from sourced data with internal data
Data Republic offers the Senate Ingenico offers a business The platform provides a suite
Data Exchange Platform which intelligence tool named Elevate of capabilities for banks to
helps organizations share data that enables firms to assess simplify campaign management.
without risking nonadherence key performance metrics and It also provides an “always on”
to customer privacy regulations help them benchmark their customer intelligence capability
or data security guidelines. The performance against their peers. that enables the generation of
Senate Data Exchange Platform Elevate is targeted at companies relevant and highly personalized
streamlines data collaboration who handle international recommendations to enhance the
across internal teams and also e-commerce transactions and customer experience across all
with external parties to avoid process payments and customer touchpoints.
unauthorized data sharing. It disputes arising out of those
provides an end-to-end view e-commerce transactions. It
of the customer by securely facilitates the conversion of raw
combining data sets across payments data into easy-to-use
the organization and a data dashboards. The dashboards allow
enrichment facility to unlock organizations to identify payment
customer insights. It facilitates a problems and opportunities and
product innovation sandbox that proactively act on them.
allows organizations to rapidly
NGDATA offers the Intelligent
test and evaluate new technology
Engagement Platform, a customer
against internal data. It also allows
experience management solution
banks to explore the potential of
that captures channel data
new data partnerships in a secure,
to provide real-time insights
auditable environment.
to engage with customers.
TECHNOLOGY INNOVATION TO SCALE UP
PAYMENTS OFFERINGS
Millennials are not inclined toward loyalty programs that require them to carry physical loyalty membership
cards. US consumers hold 3.3 billion memberships, with an average consumer participating in at least seven
programs. Points earned but never redeemed are 30% of total points awarded. A high percentage indicates that
consumers are not connected with their loyalty programs.
Trend 7: Distributed ledger technology for loyalty programs

Customer trust and loyalty are they do have an affinity for digital loyalty program in such a way
critical to the success of any reward programs. A retailer or that merchants cannot view each
organization. With a customer- merchant may find it cumbersome other’s transactions. Benefits of
centric approach, loyalty and to run a loyalty program due to leveraging blockchain for loyalty
rewards have become focus areas the IT platform cost involved, programs include interoperability,
and unique selling propositions customers disinterested in the reduced third-party costs,
for financial organizations across onboarding process, abandoned increased adoption due to
the globe. Conventional loyalty points or competition from loyalty frictionless systems, near-real-
programs suffer from challenges program offerings in the market. time processes, and a secure and
such as low redemption rates, permissioned platform.
For a merchant or retailer to
reward points lock-in with specific
launch a cobranded loyalty
merchants, high operational
costs, low customer incentives
program with a card issuer Recommendations for
and a lack of uniform customer
or another ecosystem player leveraging distributed
involves high overhead due
experience. In many loyalty
to the complexity involved in
ledger technology for
programs, rewards are primarily
loyalty points accounting and the loyalty programs
driven by the total amount spent.
reporting process with cobrand Rewards and benefits offered
There is potential to achieve
partners. Blockchain-powered can act as a differentiating factor.
multiple benefits from a well-
loyalty programs enable users to With the benefits that blockchain-
defined loyalty program to target
receive and redeem loyalty tokens based loyalty solutions offer,
a brand, product or customer
in an interoperable manner across and the problems inherent in
profile. Millennials are not inclined
loyalty programs. Every merchant traditional reward platforms,
toward loyalty programs that
has permissioned access to a banks and industry players need
require them to carry physical
distributed ledger that hosts the to quickly adopt blockchain
membership cards; however,
technology. This will help be made available to consumers. a blockchain-based crypto-
create unique customer value This makes it simple for the card currency offered as rewards
propositions through a unified issuer and ecosystem players to points. LoyalCoin earned by
platform for all participating articulate the benefits accrued to transacting at merchant outlets
partner merchants, thus enabling the consumer. can be redeemed at any merchant
a frictionless system. participating in the program
For blockchain-based loyalty Solutions that leverage including McDonald’s in the
Philippines. Consumers can
programs to be successful, distributed ledger convert their LoyalCoin into other
merchants may offer reward
points using varying loyalty
technology cryptocurrencies such as bitcoin
or Ethereum.
scheme definitions. Reward Singapore Airlines has launched
points calculation, conversion and a blockchain-based digital wallet Trippki enables hotels to reward
redemption must be transparent based on KrisFlyer, its air miles their guests with TRIP tokens that
and easy for consumers to program. The wallet enables flyers are cryptocurrency issued on
comprehend. This would to convert their unused airline the Trippki platform, built using
otherwise lead to disinterest miles (KrisFlyer miles) into reward Ethereum DApp technology.
from consumers and result in points (KrisPay miles). If the TRIP tokens can be redeemed
low adoption. unused air miles are not sufficient against hotel room bookings
for redemption at the airline, they on the Trippki platform. Trippki
It is imperative to provide a
can be tokenized as reward points. also keeps track of blockchain
seamless onboarding program
Consumers can redeem them at events across the globe, enables
for partner merchants and other
merchant outlets including fuel, crypto enthusiasts to book hotel
stakeholders into the blockchain-
retail, food and beverage, that are rooms and gather their reward
based loyalty programs. These
not directly participating in the air points as TRIP tokens. Hotels can
programs also need to comply
miles program. launch bespoke reward programs
with regulatory mandates on
using the Trippki platform to
transaction data and customer American Express has launched
meet the varied needs of the
data privacy rules that vary a distributed ledger that allows
traveler community rather than
from region to region. In case merchants to offer Amex reward
provide standard reward offerings
tokens are used, token life cycle points to their consumers on
that are widely available in the
management becomes crucial, their respective mobile apps or
market. Guests staying in hotels
and the approach needs websites and not depend on a
booked through Trippki can get
to be in consensus with all credit card as a channel to offer
rewarded with TRIP tokens for
the stakeholders. reward points. The distributed
writing reviews.
ledger provides Amex with
Card issuers would need to
insights on products and services qiibee enables merchants to issue
integrate their core processing
that consumers purchase; these reward points as cryptotokens on
accounts receivable platform
insights are not available to the qiibee platform, which runs
with blockchain-based loyalty
Amex with credit card purchase on Ethereum blockchain and uses
platforms. This ensures the details
transactions, which carry the qiibee protocol. These reward
of registered merchants and
merchant name but not details of points are backed by QBX, which
customers and loyalty program
the items purchased. is the qiibee platform’s own token.
terms and conditions are seamless
across channels and all player- Appsolutely is a Philippines-based
touchpoints. A consolidated omnichannel loyalty solution
reward points statement must company. It offers LoyalCoin,
Trend 8: Cloud for platform scalability and resilience
Adopting emerging technology to focus on business goals and Recommendations for
has been a challenge for lets the technology operations
traditional financial services team handle the organization’s leveraging cloud
firms, especially the midsized computing demands. Cloud Infrastructure as a service
and small players. Changing computing helps increase agility, (IaaS), platform as a service
technology trends, paucity scale higher, optimize utilization (PaaS) and software as a service
of skilled resources in niche of IT resources and saves cost (SaaS) are the three main
technologies, and the cost and through the use of pooled assets. approaches for embracing
risk involved have inhibited these cloud services. Corporations
Traditional players are held back
firms from adopting emerging subscribing to SaaS services
by legacy systems that increase
technologies. On the other hand, can use applications without
costs and slow down the time
traditional players face increasing the need to internally manage
to market for new products.
competition from fintech startups infrastructure components or
Cloud helps them modernize
that have built their platforms application development. Based
their back-end platforms to align
based on a digital-first approach on computing needs and an
with the latest technology trends.
and do not face the burden of assessment of service providers’
Cloud-based platforms allow
integrating their digital with their capabilities, a decision must be
them to offer Platform as a Service
legacy back ends. The bank of the made to choose the cloud model
(PaaS) and explore additional
future is expected to look very and the service provider.
revenue streams.
different from today. Midsized and
Organizations can launch Banks can “lift and shift” their
small traditional players in the
“software as a service in the cloud” existing landscape into a cloud
financial services industry need
as an offering to provide platform setup; however, this approach
to equip themselves to face the
capabilities using the multitenant may not allow banks to enjoy
onslaught of competition from
architecture. Resiliency of IT the complete set of features
nontraditional players, changing
platforms and the ability to and benefits offered by cloud
consumer expectations, emerging
quickly recover from failures infrastructure. As part of their
technologies and alternative
are critical. Industry players platform modernization journey,
business models. Cloud is a
consider cloud a go-to approach banks can rebuild core processing
solution that can help financial
to enable enterprise platform platforms as digital-first platforms
organizations be future ready.
transformation. According to an that embrace API-based and
Cloud enables institutions to microservices-led architecture
Infosys Knowledge Institute study,
cope with changing business principles. Such redesigned
50% of financial services and
demands, pursue new business applications will enable banks to
insurance respondents had shifted
opportunities that demand fully benefit from the scalability,
all or some critical enterprise
platform capabilities, and be reliability and resilience that
applications to the cloud. The
agile in scaling resources with cloud infrastructure offers.
market for cloud offerings is
increasing speed and elasticity.
expected to grow by 8% annually
It enables an organization’s
until 2024.
technology leadership team
Irrespective of the cloud industry players to reduce time with money management tools
model, institutions need to to market and evolve platform and a Mastercard debit card. It
focus on security measures functionality in a collaborative enables small-business owners
and controls at all layers of way with other ecosystem to manage their finances on a
the cloud infrastructure. Any players. Industry players are platform runs on AWS. Starling
breach in regulation in a cloud increasing their focus on reduced Bank and Monzo are digital-only
setup would be detrimental to a cycle times for new product banks in the UK that leverage
bank’s reputation and consumer launches, introducing minimum AWS for their core platforms.
confidence in the bank’s brand. viable products, building Starling Bank and Monzo run their
platform capability sets in an analytics platforms on BigQuery,
Bank platforms tend to have
iterative manner, and designing deployed on GCP.
multicurrency, multicountry
platforms with scalability and
features given the multicountry In January 2019, Cantilan Bank Inc.
resilience as core principles. In
operations of banking players. became the first Philippines bank
such a transformative approach,
As part of their cloud journey, to fully leverage a cloud-based
the cloud journey can be
institutions can consider instilling SaaS system for its core banking
accelerated and amplified by
multitenancy features into their system needs. Singapore’s DBS is
players embracing DevOps
core processing platforms. This one of the early adopters of cloud
and agile approaches to
enables to monetize platforms in the Asian banking industry.
platform development.
and extend capabilities to smaller Indonesia-based bank BRI runs
traditional players and emerging Solutions that its platform on Google Cloud
fintech players. This approach Platform (GCP).
can go hand in hand with a
leverage cloud
bank’s strategy of competing and Banking players in the US, Europe
collaborating with fintech players. and Asia are leading cloud
adoption. US-based card issuer
Embracing DevOps, Continuous
Capital One leverages Amazon
Development, Continuous
Web Services (AWS) for its cloud
Integration and process
needs. Spain’s Bankinter and the
automation has become
UK’s OakNorth are using AWS
important in an API-led platform
to host their banking platforms.
development where development
Holvi, a digital bank for freelancers
communities are spread across
and small-business owners runs
locations. DevOps and agile
current business account services
approaches enable banks and
EMBRACING INNOVATIVE FINTECH
BUSINESS MODELS
POS financing provides consumers with instant loan processing to enable them to complete purchases. The loan
size could range from hundreds to thousands of US dollars. Consumers can pay the loans in installments. POS
financing provides unsecured loans within minutes at low interest rates without a preapproval, and with a simple
and seamless loan setup. This form of financing is emerging across retail websites and in stores as an alternative
to credit cards.
Trend 9: POS financing and noncard lending

Installment purchase has become one in 10 millennials says they the annual percentage rate works,
popular since the 2008 recession: have carried credit card debt for which they address by offering
41% of US consumers have used five years. Millennials and Gen Z transparent and fixed credit terms.
an installment loan and 28% of are drawn to POS financing due
Fintech startups leverage mobile
shoppers now prefer a retailer to their aversion to high interest
apps for loan processing to
that offers the option. TransUnion rates levied on credit cards and
ensure a paperless and digital-
has reported that unsecured the open-ended nature of credit
first approach to consumer
personal loans were the fastest- card outstanding. In contrast,
onboarding. They have built
growing debt type in the US in POS financing loans have fixed
platform capabilities to leverage
2018, growing 19% year over year, tenure for repayment with interest
nontraditional data sets for credit
indicating an uptick in alternative rates that are lower than those on
scoring apart from the usage of
financing solutions. credit cards. Few fintech startups
traditional credit bureau data.
provide budgeting tools to help
52% of Gen Z and 60% of Their digital-first approach
consumers track their monthly
millennials say they are interested ensures a frictionless purchase
budgets along with loan tracking.
in payment methods other than experience for the consumer and
POS financing fintech companies
traditional credit cards to finance influences the user experience
have gained traction by removing
large e-commerce purchases. at the point of sale. Traditional
consumers’ pain points such as
Only one in three millennials banks such as Citizens Bank have
lack of understanding as to how
carries a credit card and about also built product offerings in this
space. Citizens Bank offers POS fresh credit application process. app to shop, engaging customers
financing at Apple Stores and its This gives existing players an through features like price-drop
merchant-financing loan portfolio advantage by making the process notifications and a wish list. The
has grown to over US$1 billion. frictionless for merchants and Klarna solution is integrated into
customers. retail stores like Zara, Ikea and
Recommendations Consumers expect an
Asos. It has launched Mindful
Money, a digital content hub
for POS financing and omnichannel experience for
for money management and
POS loans. The user experience
noncard lending across physical stores, the web
responsible lending, tailored
for millennials. In 2018, Klarna’s
To mitigate the threat posed by and mobile apps needs to be
annual loan volume growth grew
POS financing upstarts, traditional consistent and should be built
36% to US$29 billion. The firm
players must take certain steps around ease of experience, instant
monetizes purchase transactions
to compete effectively. Most card decisioning and loan processing.
through merchant fees rather
issuers allow transactions above Loan program features need to be
than charging interest.
a certain value to be converted aligned with consumer needs in
into installment loans payable terms of ticket size, upfront fees or Affirm is a US-based POS
over three to 36 months. Banks monthly fees, loan duration, etc. financing provider focused on
must offer this facility through serving consumers without
Banks and card issuers must
digital platforms for a hassle- credit histories, savings accounts
build strong relationships with
free consumer experience. Text or access to small loans. It has
ecosystem partners — large retail
messages to cardholders with a over 2,000 merchant partners,
chains, small retailers, fintech
list of eligible transactions that including retailers like Warby
firms and card networks. This
can be converted into installment Parker, Room and Board, and
will ensure that banks and card
loans can be helpful. Card issuers David Yurman. Affirm has built
issuers stay invested in consumer
and acquiring banks can launch its own algorithms for predicting
mindshare and do not fall behind
APIs that enable consumers to the loan repayment eligibility
fintech firms.
make purchases at merchant of consumers. Its algorithm
outlets and online stores with considers factors like the price
a financing facility. Card issuers’ Solutions for POS financing of an item being purchased to
insights into consumer credit and noncard lending understand a customer’s risk
histories and credit behaviors profile. Affirm monetizes purchase
Several traditional and fintech
would enable them to price the transactions through interest
firms have successfully
loans instantaneously. Offering levied on consumers but doesn’t
distinguished their POS financing
APIs to enable loans at the point charge fees or a prepayment
solutions across countries
of sale would lead to increased penalty. The Affirm InStore service
through their scale, marketing
sales for merchants, who would be enables consumers to apply for
initiatives or targeting of specific
willing to route such transactions Affirm loans at the physical point
audiences. Klarna is a Sweden-
on a card payment rail, that would of sale through a virtual card. The
based POS financing provider
have otherwise been processed firm has partnered with Walmart
with 130,000 merchant partners
as consumer loans outside to enable POS financing at over
that supports 60 million shoppers
card networks. 4,000 store locations and on
across the US and 14 markets
Walmart.com.
Lending to existing customers in Europe, including the UK and
makes it possible for card issuers Germany. Klarna’s customer
to process significant parts of acquisition strategy has been
consumer loan requests without largely millennial focused.
the consumer going through a It offers a direct-to-consumer
Australia-based Afterpay focuses repayment durations of their at any merchant that accepts
on the fashion and beauty choice. Amazon store cards are PayPal. Ally Financial has decided
industry and enables buyers to offered by Synchrony Bank and to reduce its focus on credit card
pay in four equal installments. can be used by consumers for business and increase its focus on
Globally, Afterpay has over 4.3 loans with predefined tenures. the POS loan model. Ally recently
million customers and more than Amex “Pay It Plan It” offerings acquired Health Credit Services,
30,000 merchants. Its merchant enable cardholders to select up which offers unsecured loans to
network comprises more than to 10 purchase transactions and finance medical procedures. Ally
10% of the US fashion and convert them into installment plans to increase its focus on POS
beauty industry. Afterpay enables loans lasting up to 24 months. lending business across categories
25% of all online fashion and in the retail sector. The “My Chase
Mastercard recently acquired
beauty transactions in Australia. Plan” offerings from JPMorgan
Vyze, a fintech firm that connects
The company holds biannual Chase enable Chase credit card
merchants to multiple POS
promotional events to coincide holders to convert past purchases
financing lenders. Vyze offers
with the back-to-school shopping into installments that attract
an API that allows merchants to
period, with discounts at retailers monthly fees.
offer credit options in store and
like Steve Madden and NARS.
online. PayPal Credit is an online
Consumers can use Square financing product and virtual
Installments offerings through line of credit offered by PayPal.
mobile apps to avail themselves Buyers can split payments of
of POS financing loans with US$99 or more over six months
Trend 10: Escrow services for consumer payments in digital commerce
Online purchases are considered cases where the buyer and seller E-commerce sellers want to
riskier than ones made in brick- cannot come to an agreement. serve customers worldwide
and-mortar stores as there is an Once a buyer initiates the dispute and supporting cross-border
element of risk involved that the resolution process, PayPal holds transactions is necessary. Escrow
product to be delivered may not the transaction amount until service providers must support
be the same as the one promised the dispute is resolved. If the global currencies and markets
on the website or that the online buyer and seller cannot reach an to serve buyers globally. They
retailer will not deliver the agreement, the dispute becomes must provide various payment
product. According to Experian, a claim. Claims give PayPal the methods such as debit and credit
e-commerce fraud increased 30% authority to investigate the case cards, bank payments, wire
in 2017 year-over-year in the US. and determine an outcome. transfers, e-wallets and PayPal. It is
In the UK, fraud increased 27% necessary to verify all the parties
To provide escrow services for
in 2018. The two most common involved in a transaction as the
e-commerce marketplaces that
frauds are shipping fraud and onus is on the escrow service
do not have the size or capability
billing fraud. Shipping fraud, provider. Yet, the verification must
to offer such services, new-age
where fraudsters use their own be fast and secure. They should
solution providers such as escrow.
address to receive delivery of also have platform capabilities
com, MANGOPAY, Shieldpay,
stolen goods purchased online, to perform Know Your Customer
Stripe Connect and Braintree have
grew by 37% in 2017. In billing (KYC) verification instantaneously.
sprung up globally.
fraud, the victim’s address is
Escrow solutions must be simple
used for payment for the stolen
goods purchased. Billing fraud Recommendations and easy to integrate into
e-commerce marketplaces. The
increased by 34% in 2017. Escrow for escrow services in third-party providers can provide
services helps solve the issues of
trust, fraud and security between
consumer payments APIs and premade user interface
components to integrate into the
the online buyer and seller. With The escrow services providers
marketplaces to reduce time to
escrow services, a third-party have transaction fees that are
market and simplify operations.
service provider collects and holds higher than PayPal’s, as they
This will allow e-commerce
on to the money on behalf of the provide better arbitration services
websites to customize the
seller and pays the seller if the and have built-in checks at every
onboarding process while being
buyer is happy after the product stage to prevent fraud. Yet, these
able to set payout timing, process
has been received. higher fees may be a deterrent
complex money movements and
for smaller e-commerce websites.
PayPal has been delivering integrate financial reporting. The
The pricing structure must be
similar services since 1999. It is escrow solution providers also
designed in a way that aids both
relatively easy for buyers and need to focus on creating a safe
small- and big-ticket sales and
sellers to use PayPal for payment experience for online platforms
caters to the volumes of small
processing. It is also convenient with their prevention tools and
and large retailers. For example,
for cross-border transactions in in-house fraud engines that notify
Escrow.com’s solution is suitable
which the buyer and seller may buyers and let them take action
for transactions in excess of
not have a common payment against suspicious behavior
US$500 due to the way the site
instrument. PayPal also provides in transactions.
has designed its pricing structure.
a dispute resolution process for
Solutions for escrow The Shieldpay escrow solution Currently, very few commercial
allows verification of the vehicles are sold online. The new
services for digital identity of all parties involved, e-commerce escrow solutions
commerce collection of funds, parking of will pave a way forward for
funds and the release of funds even higher-value commercial
Well-established marketplaces
when both parties are satisfied. vehicles to be bought and sold on
and e-commerce retailers such
Shieldpay is integrated into Visa’s marketplaces. TruckTractorTrailer.
as Amazon, eBay, Etsy, Alibaba
CyberSource platform that allows com recently partnered with
and Walmart have been using
secure P2P payments, which escrow solution provider Accruit
escrow services to the advantage
has been difficult in the past. to enter this untapped market.
of both buyers and sellers. Alipay
This, in turn, has allowed Visa to
offers buyer and seller protection Payoneer has started offering
accept payments in lesser-known
with escrow services. When B2B escrow services for online
marketplaces and ad sites.
a buyer purchases a product, transactions. According to a
Alipay collects the money from Escrow services are now being Payoneer survey, nearly 75% of
the buyer and holds it an escrow adopted for P2P high-value respondents declined to conduct
account until the buyer receives transactions such as preowned transactions due to the high risk
the product and confirms the car sales on marketplaces like perceived. Using escrow in B2B
same. This provides a system of Craigslist, eBay and Hemmings. transactions opens up cross-
guarantee. In case of a dissatisfied Escrow solutions such as PaySafe border commerce.
consumer due to any problem allow transactions for preowned
As escrow becomes more
with the product, Alipay refuses to cars to be reviewed at every stage
integrated into online sales, high-
pay the seller, thereby protecting – such as ownership title, history
value items including preowned
the interest of the buyer. There is report and inspection, before the
cars, commercial vehicles,
also a provision of chargeback like funds can be released to the seller.
construction equipment and
the one provided by credit card This is a new business marketplace
luxury items like art could soon be
companies. In case of a dispute, where transactions in the range
purchased with the same online
the arbitration cell intervenes and of US$5,000 to US$30,000 can be
ease as less-expensive goods.
is another service offered as part done without any friction. This is
of the escrow solution. This has in contrast to the earlier fortified
helped Alipay attract many loyal preowned brick-and-mortar car
customers and have a market dealership model.
share equivalent to Amazon and
eBay combined.
PRODUCT INNOVATION-LED DIFFERENTIATION IN
PAYMENTS OFFERINGS
Industry players are launching innovative payments offerings to differentiate themselves in a crowded
marketplace. Bitcoin-backed debit cards issued with Visa and Mastercard logos enable acceptance with
merchants across the globe. The cryptocurrencies are integrated with fiat currencies and transferred to the
bitcoin-linked debit card using a cryptocurrency wallet. The bitcoin-linked debit cards can be used for making
transactions similar to normal debit cards, with no change in the merchant’s infrastructure for bitcoin card
acceptance. Bitcoins get converted to fiat currency at the card issuer’s end during transaction processing.
Trend 11: Cryptocurrency in cards

The global cryptocurrency how they use debit cards linked and Amex are focusing on
market is expected to grow at to bank accounts. Bitcoin can digitizing cross-border corporate
6.2% annually until 2024 to reach be turned into fiat currency in payments using blockchain and
US$1.4 billion. From the increased a quick and easy way by using distributed ledger technologies.
launch of product offerings, it is these debit cards. With the These card network majors are
evident that cryptocurrencies are traditional payment systems still investing in and collaborating
increasingly being considered dominating the finance market, with fintech companies that are
as a feasible option for payment the crypto debit cards are paving working to reduce friction in the
across multiple regions. Bitcoin- the way for expansion of digital consumer-to-consumer and B2B
backed debit cards allow users to currencies in the payments payments domains.
use their cryptocurrency widely. domain. Increased adoption of
Cardholders can make purchases bitcoin-backed debit cards is
and payments and withdraw fiat coming at a time when major card
currency from an ATM, similar to networks such as Visa, Mastercard
Recommendations for norms for both card issuers Mastercard logo and provides
and cardholders. Cardholders’ access to five cryptocurrencies
leveraging cryptocurrency identity details that are AML and 150 fiat currencies. MCO Visa
in card products KYC compliant, can be stored prepaid cards provided by crypto.
in a centralized repository to com let holders buy, sell and track
To increase the uptake of crypto-
which multiple industry players digital coins by linking the cards
based card product offerings,
have permissioned and need- to mobile wallets.
the shortcomings of the current
based access.
market offerings must be Coinbase allows its customers
removed. Currently, issuers of Banks can leverage big data, to make contactless, chip
bitcoin-backed debit cards charge AI and ML to improve their or PIN-based transactions
a fee to facilitate the service. The product offerings that involve anywhere in Europe where Visa
fees levied on bitcoin-backed cryptocurrency. AI and ML can be payments are accepted and
debit cards vary across issuers. leveraged in areas such as bad charges a liquidation fee for
However, consumers do not pay actor detection or fraud detection each transaction, as spending
any fees if they pay directly at related to cryptocurrencies, cryptocurrencies causes
retailers through a cryptocurrency wallet behavior analysis (for liquidation of the same. Bitcoins
exchange-supported transfer behavioral pattern analysis of can be loaded on Xapo debit
mechanism. Bitcoin-backed debit individual investors), on-chain cards using real-time conversion.
cards increase the probability power factors for identification Users can pay fees to Xapo using
of cyber theft, since users must of unique factors influencing the bitcoins. Coinbank issues physical
transfer their virtual currency to a behavior of the crypto asset, and cards and virtual cards that can be
mobile wallet to use them. fund-flow analysis (for analysis of loaded with litecoin and bitcoin.
fund transfers between exchanges Uquid allows crypto payments
As an alternative, a crypto asset
or other entities). Big data can in bitcoin and over 80 additional
held with a crypto exchange can
also be used in analyzing the altcoins with a Uquid wallet or
be treated as collateral against
spending pattern of cards linked debit card supporting three fiat
which a loan can be provided
to cryptocurrency wallets, thereby currencies. Uquid Android and iOS
to the user in fiat currency. In
providing personalized reward apps are also offered.
cases where the cardholder
offers to promote such spends.
fails to pay the outstanding Facebook plans to launch
balance, the crypto asset can virtual currency Libra. Virtual
be liquidated by the card issuer. Solutions that leverage currency will be issued using
The card issuer can store the cryptocurrency in card a permissioned blockchain.
spend details in a decentralized Bitnovo offers prepaid debit
network using distributed
products cards that can be reloaded
ledger technology. Credit cards BitPay offers Visa prepaid cards instantly using bitcoins and in
backed by cryptocurrency as that are linked to cryptocurrency Spain additionally provides the
security collateral can be made wallets and instantly convert the option of buying bitcoins through
more effective and trustworthy bitcoin core to bitcoin cash and its app, website and vouchers.
by leveraging smart contracts then to fiat currency for online Bitwala, a Europe-based crypto
and blockchain technology in payments. Wirex supports a crypto exchange, collaborates with a
maintaining the digital agreement reward program for converting German fintech startup allowing
between the parties in the ledger. the spends using Visa debit cards consumers to perform different
This would increase transparency into crypto rewards, which can be forms of funds transfer including
and governance and reduce the either spent or converted to other SEPA. FuzeX is a cryptocurrency
scope for disputes. currencies with a different wallet payment card that is NFC enabled
for each cryptocurrency. Revolut, and has an EMV chip with a
The distributed ledger-based
a UK-based fintech startup, offers barcode display.
approach will ease the burden
of complying with AML KYC the Revolut Metal card with a
Trend 12: Multicurrency cards for corporate travelers and tourists
Consumers and corporate acquiring bank. Card issuers levy travel targeted at consumers and
employees use credit cards for a foreign currency transaction corporate users. The multicurrency
their payment needs when they fee on each transaction done on prepaid travel cards can be loaded
travel abroad. Alternatives such the credit card. This burdens the with one or multiple currencies
as foreign currency or traveler’s cardholder with too many fees that are supported by the card
checks are available, but they and a lack of visibility into the issuer. Each currency is loaded
need to be purchased prior to total amount in local currency that in a separate wallet. Some cards
travel and fees are incurred when he would incur if he were to do a allow converting the balance
unused quantities are returned. transaction abroad. available in one currency wallet to
Usage of foreign currency leads another, if required. Prepaid travel
Some of the acquiring banks
to the accumulation of coins, card issuers bundle value-added
provide their merchants with
which cannot be converted to services such as travel insurance,
dynamic currency conversion
domestic currency. mobile apps for online tracking
(DCC) services to ease these
and monitoring, concierge
Using credit cards during problems and to enable
services, and emergency services
foreign travel does not require merchants to attract foreign
with the travel card. However,
any specific planning and is travelers to their stores. As part
industry players levy fees when
very convenient to the users of DCC services, the cardholder
loading foreign currency into the
due to the wide acceptance will be shown the transaction
wallet and when returning the
of credit cards internationally. amount in the foreign currency
unused balance in local currency.
Credit cards typically provide and the amount in the
reward points, fee-based fraud cardholder’s local currency for Multicurrency debit cards
protection, insurance facility, which authorization will be taken. are linked to a savings or
and the option to block the card Any fees levied by the merchant checking account in the user’s
and have a replacement card (or DCC service provider) will be local currency. At the time of
issued. However, usage of credit included and displayed to the transaction, the transaction
cards during foreign travel has its cardholder in their local currency. amount in foreign currency is
own set of disadvantages such The transaction gets processed by converted to the local currency
as foreign currency transaction the card issuer in the cardholder’s equivalent and the bank account
fees, ATM cash withdrawal fees, local currency and hence does is debited. These debit cards
exchange rate markups and not involve any foreign currency come with mobile app facility
interest levied if the outstanding conversion or related markups for transaction tracking and
balance is not paid in full within or foreign transaction fees. DCC monitoring. Unlike credit cards,
the stipulated time. provides complete visibility to the foreign currency conversion
the cardholder on the transaction rate is attractive and there is no
Card issuers use a foreign
amount that is being charged in foreign transaction fee. Unlike
currency conversion markup of
local currency for all transactions. prepaid travel cards, these debit
1% to 3% over the conversion
cards do not attract any fees for
rate used by card networks such As an alternative to credit
loading or refunding since the
as Visa or Mastercard. ATM cash cards, many fintech startups
bank account balance in local
withdrawals attract a fee levied and banks have come up with
currency is used.
by the card issuer as well as by prepaid or debit card-based
the ATM service provider or the product offerings for foreign
Recommendations for at the card-issuing bank, or the Card issuers with multicountry
cardholder could transfer money market operations can leverage
multicurrency card in real time from a different bank their relationships with hotels,
product features to the card issuer). Features such restaurants and other tourist-
as ATM locators, claims expense related establishments for loyalty
Card product offerings with
management (for corporate cards) offers on multicurrency cards used
multicurrency features should be
and travel insurance will be of by foreign travelers (cards issued
accompanied by robust digital
immense help to the cardholder. by banks’ entities operating in the
capabilities and a higher level of
home countries of the travelers).
customer service. Digital front Transparent pricing and lower
Such card issuers can leverage the
ends for cardholder acquisition, fees would be great incentives
cardholder profile and transaction
customer servicing and for travelers to use multicurrency
data to run market campaigns
omnichannel customer service card products. The card issuer can
on behalf of merchants related
support are a prerequisite as consider partnering with ATM
to the tourism industry. Loyalty
cardholders may need customer service providers in key foreign
offers would tempt cardholders
support in a foreign country with markets to enable lower ATM
and enable merchants to attract
limited access to mobile data and withdrawal fees for cardholders.
increased footfalls of higher-
no access to physical branches. In the case of prepaid travel
spending foreign travelers.
Moreover, the card may be the cards, features such as the ability
key (or the only) source of funds to convert a balance from one From a corporate card
for the cardholder. Hence, digital currency to another, multi- perspective, the incumbent
front ends and omnichannel currencies support as part of large banks or travel card
customer service will provide the the card wallet and lower fees issuers have the advantage of
necessary support to cardholders. for load, reload or refund would an in-depth understanding of
persuade the cardholder to corporate needs due to long-term
Mobile apps can be leveraged
retain the multicurrency card for relationships and their ability
for digital KYC and instant
subsequent travels. to provide bespoke solutions to
onboarding of the cardholder.
meet corporate needs. However,
Spend controls (merchant With increased offerings from
fintech startups are disrupting
category, transaction limits, fintech startups and market
the market by providing lower
transaction types) can be offered adoption of open banking and the
fees, transparent pricing, ease
as a self-service through mobile second European Union Payment
of third-party integration, API-
apps. Mobile apps can be used for Services Directive initiatives, card
enabled platform access and
location tracking or geofencing issuers need to embrace open
digital front ends. Incumbent
and this could come in handy APIs and third-party integration
players must create innovative
in scenarios where transactions for a complete and collaborative
product features, leverage
could arise from locations outside approach with the ecosystem
digital front ends and tap into
the intended country of travel. players. Card issuers can provide
data monetization initiatives for
Ease of use and a feature list of APIs to pull data for reporting,
loyalty offers to stay relevant
mobile apps could be potential regulatory needs, expense
and remain competitive in an
service differentiators for the tracking, claims management and
evolving marketplace.
card issuer. Mobile apps can other purposes. They can provide
enable real-time loading (the these facilities through their
source of funds could be the bank in-house platforms or they can
account held by the cardholder integrate with third parties.
Solutions for up to a predefined monthly Axis Bank offers multicurrency
spend. Premium offerings prepaid travel cards for Indian
multicurrency cards from Revolut include overseas travelers. The card can be loaded
TransferWise offers multicurrency medical insurance, delayed with balances in 16 currencies and
accounts for individuals and baggage and delayed flight each currency balance is stored in
businesses in the UK, Switzerland, insurance, disposable virtual a separate wallet. The cardholder
Australia, New Zealand, cards, and concierge services. can choose currencies based on
Singapore, most of the European Visa teamed up with Revolut purchasing needs. In scenarios
Economic Area and the US. in October 2019 for the launch where the cardholder does not
Users need to open the account of a multicurrency debit card have a wallet in the currency of
in the first currency and add a in Singapore. Mastercard and the transaction, balances available
balance; they can subsequently Revolut have teamed up for in wallets in other currencies can
add more currencies and hold the launch of Revolut in the be used (the order of usage of
balances in those currencies. The US market. Revolut plans to wallets is set by the bank). Such
TransferWise account and all the leverage Mastercard MoneySend conversions incur foreign currency
currencies are connected to the remittance offerings as part of its transaction fees. HDFC Bank offers
TransferWise multicurrency debit global expansion plan. multicurrency prepaid travel cards
card. The debit card is issued that support 22 currencies (each
N26 is a digital bank in Europe
with a Mastercard logo and the currency balance is stored in a
focused on the banking needs of
card supports balances in over separate wallet). On an as-needed
international travelers. The N26
40 currencies. Foreign currency basis, the cardholder can convert
debit card allows ATM withdrawals
conversion markup is low since the balance in one currency to
and purchase transactions in
the conversion is done using another through an internet
foreign currencies at the current
real midmarket rates. The card banking login. Ctrip (China’s
midmarket rate with no exchange
allows free ATM withdrawals up largest travel company) teamed
rate markup. MoneyBeam
to a predefined limit and has up with Wirecard in 2019 for the
offerings from N26 allow P2P
competitive offerings in terms of launch of a multicurrency prepaid
transfers using the phone
transaction fees. card for Chinese travelers. The
numbers or email addresses of
card allows balances to be loaded
Revolut offers contactless recipients. N26 offers insurance
in seven different currencies and is
multicurrency debit cards with coverage for medical expenses,
issued with the Visa logo.
free ATM withdrawals up to a flight and baggage delay
predefined limit. The cardholder expenses, and travel cancellations.
can spend in over 150 currencies The N26 mobile app offers spend
at the interbank exchange rate tracking, alerts and notifications,
with no foreign transaction fees and online payments features.
References
Trend 1: Rapid rise of real-time payments
• https://www.pymnts.com/news/faster-payments/2019/real-time-ubiquity-tch-federal-reserve/
• https://www.fisglobal.com/insights/what-we-think/2019/november/what-is-next-for-real-time-payments
• https://www.pymnts.com/tracker/faster-payments-november-2019/
Trend 2: Real-time cross-border payments

• https://www.pymnts.com/smarter-payments/2019/why-cross-border-payments-need-transparency-overhaul/
• https://ripple.com/use-cases/banks/
• https://www.ibm.com/blockchain/solutions/world-wire
• https://www.swift.com/news-events/press-releases/swift-enables-payments-to-be-executed-in-seconds
• https://www.paymentsjournal.com/to-pay-or-to-be-paid-that-is-the-answer/
• https://usa.visa.com/run-your-business/visa-direct.html
• https://www.mastercard.us/en-us/issuers/products-and-solutions/customer-needs/consumer-solutions/mastercardsend.html
Trend 3: Digital payments

• https://en.wikipedia.org/wiki/Ultrasound
• https://economictimes.indiatimes.com/small-biz/startups/features/this-amazon-backed-startup-makes-digital-payment-possible-with-
out-internet-tonetag/articleshow/71042246.cms
• https://www.finextra.com/blogposting/17881/5-important-mobile-wallet-trends-you-need-to-know
• https://www.paymentsjournal.com/5-global-trends-that-will-affect-digital-payments-in-india/
• https://www.paymentscardsandmobile.com/mobile-wallet-trends-annual-report-2019/
• https://www.marketwatch.com/press-release/e-wallet-marketanalysis-by-growth-emerging-trends-and-future-opportuni-
ties-till-2023-2019-10-14
Trend 4: ISO 20022 adoption in payments

• https://www.swift.com/your-needs/industry-themes/iso-20022
• https://www.iso20022.org/adoption.page
• https://www.nacha.org/system/files/resources/ISO-20022-Frequently-Asked-Questions.pdf
Trend 5: Artificial intelligence and machine learning in cards

• https://newsroom.bankofamerica.com/press-releases/consumer-banking/bank-americas-ericar-completes-more-50-million-client-re-
quests
• https://www.finextra.com/pressarticle/78566/bank-of-america-chatbot-logs-50-million-requests-in-first-year
• https://www.creditconnecter.com/credit-cards/
• https://becominghuman.ai/how-ai-has-impacted-the-credit-card-industry-be2db758cce9
• https://www.creditcards.com/credit-card-news/artificial-intelligence-credit-cards.php
• https://emerj.com/ai-sector-overviews/artificial-intelligence-credit-cards/
• https://www.fintechnews.org/the-crirital-role-of-artificial-inteliigence-in-payments-tech/
• https://www.livemint.com/Home-Page/6PqZ9XLJIljC0VPDpD35KP/How-credit-card-issuers-can-gain-from-machine-learning.html
• https://www.mastercard.ca/en-ca/issuers/products-and-solutions/grow-manage-your-business/loyalty-solutions/pay-with-rewards.html
• https://mezi.com/
• https://thefinancialbrand.com/84350/bank-of-america-chatbot-erica-retail-banking-virtual-assistant/
• https://www.businesswire.com/news/home/20190528005646/en/Bank-America’s-Erica®-Completes-50-Million-Client/
• https://www.infosys.com/industries/financial-services/documents/robotics-process-automation-cards.pdf
• https://www.businesswire.com/news/home/20180925005512/en/NICE-Deploys-Robotic-Process-Automation-SBI-Card
• https://www.sbicard.com/sbi-card-en/assets/docs/pdf/who-we-are/news/2019/express-computer-online-rpa.pdf
• https://www.bernardmarr.com/default.asp?contentID=1263
• https://www.darkreading.com/application-security/how-ai-and-cybersecurity-will-intersect-in-2020/d/d-id/1336621?image_number=7
• https://www.forbes.com/sites/quora/2018/10/09/how-artificial-intelligence-job-displacement-will-affect-the-worldwide-econo-
my/#3c20eb7c1f52
• https://www.bbva.com/en/self-driving-banking-using-technology-to-connect-with-customers/
• https://www.cbronline.com/news/hsbc-client-intelligence-utility
Trend 6: Payments data monetization

• https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/financial-services/ch-en-fs-disruption-payments.pdf
• https://www.alliedmarketresearch.com/data-monetization-market
• https://www.arminsight.com/
• https://go.datarepublic.com.au/senate-platform/
• https://www.ngdata.com/ngdata_iep/
• https://www.ingenico.com/epayments/data-analytics
Trend 7: Distributed ledger technology for loyalty programs

• https://patents.justia.com/assignee/american-express-travel-related-service-company-inc
• https://www2.deloitte.com/us/en/pages/financial-services/articles/making-blockchain-real-customer-loyalty-rewards-programs.html
• https://www.bigcommerce.com/blog/customer-loyalty-blockchain/#businesses-adopting-blockchain-loyalty
• https:\www.tothenew.com\blog\reinventing-loyalty-programs-with-blockchain-technology\
• https://hackernoon.com/blockchain-can-save-customer-loyalty-programs-from-becoming-unfruitful-3992c6bc6053
• https://dragonchain.com/blog/loyalty-and-rewards-programs-reinvented-with-blockchain/
• https://www.plugandplaytechcenter.com/resources/enhancing-customer-loyalty-programs-blockchain/
• https://www.disruptordaily.com/blockchain-startups-marketing/
Trend 8: Cloud for platform scalability and resilience

• https://www.infosys.com/services/cloud/insights/documents/cloud-apps-financial-services-insurance.pdf
• https://www.mordorintelligence.com/industry-reports/cloud-enabling-technology-market
• https://www.computerworld.com/article/3145622/capital-one-rides-the-cloud-to-tech-company-transformation.html
• https://fintechnews.ch/virtual-banking/hottest-digital-first-challenger-banks-by-country-in-europe/32245/
• https://searchcloudcomputing.techtarget.com/definition/Infrastructure-as-a-Service-IaaS
• https://searchcloudcomputing.techtarget.com/definition/Platform-as-a-Service-PaaS
• https://searchcloudcomputing.techtarget.com/definition/Software-as-a-Service
Trend 9: POS financing and noncard lending

• https://www.jifiti.com/glossary/pos-financing/
• https://thefinancialbrand.com/84711/point-of-sale-pos-lending-finance-fintechs-banks/
• https://www.forbes.com/sites/ronshevlin/2019/03/04/jpmorgan-chase-enters-a-hot-fintech-space-point-of-sale-pos-financ-
ing/#6ac89b61f158
• https://www.bankingdive.com/news/banks-holiday-retail-point-of-sale-loans-citi-jpmorgan-chase-mastercard-affirm/568293/
• https://www.supermoney.com/point-of-sale-lending/
ing/#6323d6e0f158
• https://www.aseantoday.com/2019/03/point-of-sale-finance-the-next-big-thing-in-fintech-development/
• https://www.businesswire.com/news/home/20190416005294/en/
• https://www.bankingdive.com/news/ally-credit-card-point-of-sale-loan/559131/
• https://www.businesswire.com/news/home/20190416005294/en/
• https://www.businessinsider.com/paypal-credit-launches-in-the-uk-2016-4
• https://www.paypal.com/us/webapps/mpp/paypal-credit
• https://thefintechtimes.com/paypal-credit/
ing/#6ac89b61f158
• https://www.bankingdive.com/news/banks-holiday-retail-point-of-sale-loans-citi-jpmorgan-chase-mastercard-affirm/568293/
• https://intelligence.businessinsider.com
Trend 10: Escrow services for consumer payments in digital commerce

• https://wpriders.com/business/escrow-payment-solutions-for-your-online-marketplace/
• https://www.pymnts.com/disbursements/2018/digital-escrow-big-ticket-ecommerce-accruit-ingo-money/
• https://www.finextra.com/pressarticle/76755/shieldpay-agrees-partnership-with-visa-to-enable-secure-use-of-payment-cards-on-p2p-
marketplaces
• https://www.ecommercebytes.com/2017/08/08/ups-offers-b2b-escrow-service-payoneer/
• https://www.b2bpay.co/b2b-electronic-payments
• https://ecommerceguide.com/guides/b2b-ecommerce-payment-systems/
• https://dinarys.com/blog/7-b2b-ecommerce-payment-systems
• https://marketplace.webkul.com/role-of-escrow-payment-in-e-commerce-marketplace/
• https://www.pymnts.com/news/b2b-payments/2017/payoneer-armor-payments-escrow-b2b-ecommerce-buyer-supplier-transac-
tion-transfer-b2c-b2b-payments-amazon/
• https://www.digitalcommerce360.com/2017/04/18/b2b-e-commerce-marketplace-ec21-launches-payoneers-escrow-solution/
• https://www.finextra.com/blogposting/14077/escrow
Trend 11: Cryptocurrency in cards

• https://cointelegraph.com/category/market-analysis
• https://www.pymnts.com/tag/libra/
• https://en.wikipedia.org/wiki/Libra_(cryptocurrency)
• https://coinfunda.com/bitcoin-debit-card/
• https://coin.dance/stats
• https://hackernoon.com/five-real-machine-learning-use-cases-in-cryptocurrencies-y51x33gw
• https://hackernoon.com/how-merging-ai-with-blockchain-can-create-a-more-secure-environment-for-data-sharing-a63ac0e2389e
• https://cards.crypterium.com/learn/pros-and-cons-crypto-debit-cards
• https://www.bitcoinmarketjournal.com/bitcoin-debit-card/
• https://news.bitcoin.com/cut-off-here-are-7-different-bitcoin-debit-card-services-and-fees/
• https://news.bitcoin.com/spend-10-cryptocurrencies-with-these-debit-cards/
• https://medium.com/@slavasolodkiy_67243/crypto-friendly-cards-suck-a-new-analysis-illustrating-their-weaknesses-in-detail-
5619b27c88ed
• https://www.barchart.com/crypto/market-capitalizations
• https://www.cfo.com/payments/2019/12/the-5-biggest-trends-in-cryptocurrency-for-2020/
• https://www.hexaresearch.com/research-report/cryptocurrency-market
• https://cointelegraph.com/news/coinbase-card-adds-xrp-and-launches-in-10-more-european-countries
• https://www.investopedia.com/tech/coinbase-what-it-and-how-do-you-use-it/
• https://www.marketsandmarkets.com/Market-Reports/cryptocurrency-market-158061641.html
• https://www.accountingtoday.com/list/4-cryptocurrency-trends-for-the-next-5-years
Trend 12: Multicurrency cards for corporate travelers and tourists

• https://www.pymnts.com/news/payment-methods/2019/visa-partners-with-revolut-to-introduce-multi-currency-debit-card/
• https://www.revolut.com/
• http://transumo.com/best-travel-card/
• https://transferwise.com/
• https://n26.com/en-eu
• https://www.forbes.com/sites/bishopjordan/2017/03/20/n26-review
• https://www.axisbank.com/retail/forex/travel-forex-card/multi-currency-forex-card
• https://www.hdfcbank.com/personal/pay/cards/forex-cards/multicurrency-platinum-forexplus-chip-card
• https://markets.businessinsider.com/news/stocks/wirecard-and-ctrip-china-s-largest-travel-company-launch-multi-currency-visa-travel-
cards-1027846195
Infosys contributors
Rajneesh Malviya Ashok Hegde Vijay Anand
Senior Vice President, Financial Services Vice President, Financial Services Head, Cards and Payments, Financial Services
Each contributor below is a consultant in the cards and payments competency area.
Vaibhav Bhokare Jennifer Mariasoosai

Warsha Borde Dhiren Mehta
Rahul Chidipothu Vaibhav Pathak
Neelmani Choudhary Krithika Ragunathan
Elbin Elias Manickavasagam S
Rashmi Hulsurkar Nakul Seth
Pankaj Jayswal Ashutosh Sharma
Kaustav Lahiri
Producers
Samad Masood Sharan Bathija
Infosys Knowledge Institute Infosys Knowledge Institute
London Bangalore
About Infosys Knowledge Institute
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technology trends through compelling thought leadership. Our researchers and subject matter experts provide a
fact base that aids decision making on critical business and technology issues.
To view our research, visit Infosys Knowledge Institute at infosys.com/IKI
For more information, contact askus@infosys.com
© 2020 Infosys Limited, Bengaluru, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change without notice. Infosys
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Global Trends in The Cards and Payments Industry 2020

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GLOBAL

Trend 1: Rapid rise of real-time payments

SEPA EU1 – SCT Inst

Ghana – GIP Malaysia - RPP ASEAN’s RTP

Figure 2. Fintech startups lead in offering real-time payment services

Big tech Fintech startups Tech giants Messaging Card networks

Trend 2: Real-time cross-border payments

Trend 3: Digital payments

Trend 5: Artificial intelligence and machine learning in cards

Trend 7: Distributed ledger technology for loyalty programs

Trend 9: POS financing and noncard lending

Trend 11: Cryptocurrency in cards

Trend 2: Real-time cross-border payments

Trend 3: Digital payments

Trend 4: ISO 20022 adoption in payments

Trend 5: Artificial intelligence and machine learning in cards

Trend 6: Payments data monetization

Trend 7: Distributed ledger technology for loyalty programs

Trend 8: Cloud for platform scalability and resilience

Trend 9: POS financing and noncard lending

Trend 10: Escrow services for consumer payments in digital commerce

Trend 11: Cryptocurrency in cards

Trend 12: Multicurrency cards for corporate travelers and tourists

Vaibhav Bhokare Jennifer Mariasoosai

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