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The next frontier of payments

The importance of a proactive and collaborative approach to reducing contactless fraud





By Garðar Stefánsson, CEO – Rapyd Europe.

In an increasingly febrile geopolitical environment, companies need the flexibility to go where the business opportunities take them. Digital payments can play a crucial role in helping them seize the initiative, pivoting their strategies to mitigate local market risks and capitalise on demand – wherever it emerges. 

Businesses cannot afford to be inhibited by payment constraints, which is why the continued development of global payments infrastructure is such a priority. It can help companies create and build opportunities wherever they are in the globe and engage with their customers in any way that helps them survive and thrive during these difficult times. That means moving money, sending and accepting payments with greater agility and speed than ever before.

Digital commerce proved to be a lifeline for the global economy during the pandemic, allowing businesses to carry on trading and prompting organisations of all sizes to rapidly adopt the infrastructure necessary to support seamless digital payments – with their customers, partners, and across their internal operations. It triggered a vast expansion in the breadth and sophistication of both B2B and B2C digital payments

As a new set of challenges threatens to throw the world’s economies off course, the choice facing many companies is simple: embrace these digital technologies, or fail.

Opening the floodgates

It sometimes takes a shock to alert people to the merits of a new technology and, over the past few years, millions of people have woken up to the ease, safety and speed of contactless payments, digital wallets and other electronic payment options. 

This awakening spans the entire globe. Over 40% of adults in low and middle-income economies made their first ever card, phone, or internet payments during the pandemic. In India, more than 80 million adults began making digital payments in 2020/21. In China, it was over 100 million adults. 

Two-thirds of adults worldwide now make or receive digital payments. In Europe, our research shows that more than seven out of 10 people shop online, with year on year growth of 11% projected through to 2025. European financial app usage has also grown at pace, with nearly three-quarters (74%) of people using a bank-provided app and half using an eWallet app.

Digital entrepreneurship is proving another catalyst for massive change in how businesses pay and get paid. Widespread adoption of remote work has allowed entrepreneurs to rethink their organisational structures and build their nascent businesses in an entirely different, borderless way, again with digital payments pivotal to their ability to operate with agility on a global scale.

Policymakers in France, China and the US, among others, also recognise that digital payments are fast becoming the go-to option for both businesses and consumers and have started to explore digital versions of their currencies. Sweden has been a notable trailblazer, with its central bank launching a major project examining the viability of an e-Krona.

Overcoming payments infrastructure problems

The global payments industry is vast, with revenues already expected to reach $3.3 trillion in 2023. However, without further development of the underlying infrastructure, there is a danger it may hit a wall. 

Local payment systems are fragmented, largely because every nation on the planet has its own unique payment priorities and preferences. Despite going global, businesses still need to think local and support preferred local payment options when buying products, paying suppliers or paying their workforce. Against this backdrop, facilitating affordable cross-border payments and delivering new payments innovations at scale can quickly become a major headache for businesses. 

Fortunately, in the past few years, fintechs have begun successfully removing some of the complexity of cross-border implementation and creating an effective, joined up financial infrastructure for payments to flow freely. 

It is crucial that this infrastructure continues to develop and that businesses of all sizes – and all geographies – are able to access genuinely global payments networks. This could also level the playing field for emerging markets. As the World Economic Forum notes: “The ability to build new (payments) systems from the ground up could accelerate the rise of SMEs and entrepreneurs from emerging markets and put them in a more advantageous position in economic recovery post-COVID-19.”

The power of cross-border embedded fintech

Access to a unified global payments infrastructure can be transformative, particularly as traditional bricks and mortar organisations digitise, as more companies seek to embed digital payments in their products and processes, or as businesses look to embrace new, sustainable business models and harness the use of innovative technologies such as blockchain.  

The next frontier of payments is all about making it easier for businesses – from startups to large corporates – to tap into global talent pools and operate efficiently and compliantly across borders, ensuring that their remote employees, freelancers, and contractors are paid in the right way, at the right time and in the right currency. In Europe, our research shows that while bank transfer is the preferred way to get paid, eWallets are growing fast – it will not be long before employees in some countries expect eWallet payments as standard.

Further, by creating deeper payments integrations within their existing products, businesses can develop a direct financial relationship with their customers – offering additional services and monetising them. For example, we’ve been working with instant messaging group Rakuten Viber to bring instant digital payments capabilities into its platform, allowing 280 million users to conduct digital personal and business transactions without having to leave the Viber app which they know and trust.  

Perhaps most importantly, expanding digital payments will increase financial inclusion and accessibility. According to David Malpass, president of the World Bank Group: “Expanding people’s access to finance, reducing the cost of digital transactions, and channelling wage payments and social transfers through financial accounts will be vital to mitigating recent economic setbacks in developing countries”. 

Hence, every organisation needs to ask the question: where can digital payments best support their business? Is it building engagement with customers, or better understanding their purchasing decisions, or is it about bringing new markets and audiences into scope for the first time?

Digital payments – and particularly cross border embedded fintech – are transformative forces in the global economy, liberating businesses to innovate and grow. With the right financial infrastructure, the possibilities at this new frontier are vast. 

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