Similar to other financial services domains, payments is evolving into an open ecosystem. The EU’s Payment Services Directive (PSD2) pioneered open banking by encouraging banks and established payments players to securely open the systems to foster competition, innovation, and more customer choices. In tandem with non-cash transaction growth, regulations are driving banks and payments firms to expand their array of payment methods and channels. Governments are encouraging financial inclusion by also promoting the adoption of non-cash payments. Increasingly, merchants and corporates seek to offer alternative payment systems because of widespread popularity among consumers. Alternative payments also enable merchants to provide real-time and cross-border payments to boost business efficiency. Banks, payment firms, card firms, BigTechs, FinTechs, and other players are continuously developing new technology to cash in on market changes. However, data breaches and fraud continue to hinder innovation as firms devote countless resources each year to address security issues. Many governments are also designing new regulations to reduce ecosystem threats. All these measures are expected to make the current ecosystem much more secure and simple for players as well as customers. Top Trends in Payments: 2020 explores and analyzes payments ecosystem initiatives and solutions for this year and beyond

1. Top Trends in
Payments: 2020
November 2019
Link: https://www.capgemini.com/top-
trends-in-2020/

2. 2© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Top Trends in Payments for 2020 by Capgemini

3. 3© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Regulatory
focus area
for risk
reduction
Work towards facilitating
robust cybersecurity
Protocols especially in an
open ecosystem future
Achieve uniformity in
crypto currency
regulations to maintain
Homogeneity in standards
Enable a level-playing field
for all market participants
by regulating new entrants
Ensuring customer data
privacy and protection,
with fine tune approach to
threat innovation
Fortify AML/CTF
machinery by closely
collaborating with
banks and FIs
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Trend 1: Regulators worldwide are focusing on risk reduction, in addition to
standardization and open banking

4. 4© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
4© Capgemini 2019. All rights reserved |
Need for standards
Countries are promoting the
use of centralized digital
identity databases/
schemes for customer due
diligence (CDD).
Several national-level DI
systems facilitate attribute
collection and storage at
a centralized location.
Industry associations and
industry stakeholders have
taken the responsibility
of formulating common digital
identity framework
Distributed ledger
technology (DLT) offers
promise in creating
borderless and open digital
identity systems.
Growing synthetic
identity fraud cases
Increased bot usage
Increasing
democratization of
identity-related
information
Key
drivers
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Trend 2: As federated digital identity gains momentum, standards are emerging to ensure
interoperability

5. 5© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Factors driving back-office rationalization
Source: Capgemini Financial Services Analysis, 2019
Trend 3: Instant
payments and
open banking
reinforce each
other and drive
the need for
back-office
rationalization
New Design
supporting
open banking
through API
integration
Real time
design for
handling 24/7
transactions
Easy deployment
and scalability
through new
technologies
Capability to
provide all
services
in as-a-service or
microservice
mode
Omnichannel
capabilities
driven by
rise of IoT
Accommodate
standards such
as ISO 20022 and
upgrades of older
RTGS and ACH
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Payments Trends 2020 | November 2019

6. 6© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Growth of alternate
payments
Changing economic
and regulatory
scenario
Need for user
convenience and
faster checkout
Key
drivers
Banks are
offering several
new services on
par with new-age
players.
Card firms
have also
launched new
products to
match those of
alternative
payment players.
BigTech firms are
targeting the
merchant
segment through
collaborative
models.
Merchants
have adopted
alternate
payment
methods
Trend 4: As merchants adopt alternative
payment methods, card firms and
banks are driven to expand offerings
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Payments Trends 2020 | November 2019 6© Capgemini 2019. All rights reserved |

7. 7© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
7© Capgemini 2019. All rights reserved |
Changing corporate
customer
expectations
Need for
transparency in
payment transactions
Latest technology
needs such as instant
payments and APIs
Key
drivers
Automation of vendor payments
Cash management
B2B cross border payments
Invoicing solutions
Supply chain financing
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Trend 5: Banks collaborate with FinTechs to help corporate clients improve B2B payments
efficiency

8. 8© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Key
drivers
Fragmentation
of payments
value chain
Need for
differentiation
Requirement
for end-to-end
capability
Demand for
superior
services by
clients
Payment firms
strategy
through
mergers and
acquisitions
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Trend 6: Payments firms enhance capabilities and build ecosystems through mergers and
acquisitions

9. 9© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Massive and loyal
customer base
create market
Intelligence from
huge client database
Absence of
regulatory
supervision
Key
drivers
BigTech Payment firms to complement their core activity and
emerge as standalone payment firms
New features
and services
Leverage FinTech
player core
capability
Expand their
presence across
geographies
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Payments Trends 2020 | November 2019
Trend 7: BigTechs pose a threat to incumbents as they eye collaborative roles in the
evolving landscape

10. 10© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Proliferation of alternate payment
methods such as digital wallets
Adoption of instant payments-based
offerings
Customer expectation demanding
convenience and reach
Regulatory push for growth of digital
payments
Factors driving
non-cash payments growth
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Trend 8: Mobile and QR payments, digital wallets, and contactless cards are set to drive
future growth of non-cash payments

11. 11© Capgemini 2019. All rights reserved |Payments Trends 2020 | November 2019
Cloud based
compliance as
service(CaaS)
Drives significant
cost reduction
Provides ability
to outsource
for smaller firms
Facilitates
cross-jurisdiction
/regional
regulatory
compliance
Improves
usability of
latest
technologies
such as cloud
Gives scalability
to ramp-up
compliance
activities
Enables to adhere
to strict data
compliance
11© Capgemini 2019. All rights reserved |
Top Trends in Payments for 2020 by Capgemini Intelligent
Bank
Open
Banking
Deep
Customer
Insights
Data-
Driven
Compliance
Payments Trends 2020 | November 2019
Trend 9: Compliance-as-a-Service gains ground as firms seek cost-effective data
compliance across multiple regions

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