New trends in payments via AI & ML analysed in a non technical way for 2022.

1. Ramesh Kumar Nanjundaiya
Bengaluru, INDIA
October 2021
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2.  Payment as a Service - The objective of this non technical presentation is
to provide a bird eye view of how the new transformational and impact
technology is influencing all financial activities globally at a speed with
particular reference to the mechanism of growing e-Payments and e-
Commerce.
 The presentation is a wakeup call for Traditional Banking organizations
to imbibe new technology with the help of 3rd party Fintech providers to
make “customer service” a very top priority going forward.
 This presentation should also give new ideas to graduate students in
Commerce, Business Administration, Data Analytics, Market Research to
explore and seek new non technical employment with organizations in
the growing Fintech sector of Neo Bank, Payment Banks, BaaS, BaaP and
the various Payments organizations and the e-commerce sector which is
growing fast and evolving at a rapid pace and expanding across S E Asia
as well as India.
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3.  While outsourcing of the full payments stack is a
possibility, a new generation of technology
providers has emerged allowing banks to expand
quickly and modernize their payments product
portfolio without incurring high upfront
investment. Payments-as-a-Service (PaaS)
players operate cutting-edge cloud-based
platforms to provide specialized services, such as
card issuing, payments clearing, cross-border
payments, disbursements, and e-commerce
gateways.
(Source: McKinsey Report).
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4.  In non technical words, Payment as a Service
can be defined as a single stop solution
optimizing for speed and cost. Essentially 3rd
party PaaS providers can help banks with
legacy processors to update their
infrastructure and to become hybrid cloud
based structures accessible via APIs. By this
way, Financial institutions would be better
equipped to access their own data and
quickly address inquiries from 3rd parties to
close deals and transactions.
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5.  Currently a key area that is seeing accelerated
growth across the globe is the sector of
Payments. Thanks to the digitized financial
sector, today consumers are able to choose
from a wide range of secured alternative
payment solutions as open banking, e-
wallets, mobile payments, prepaid cards, and
distributed ledgers.
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6.  An API is a connection between computers or between
computer programs. It is a type of software interface, offering
a service to other pieces of software. A document or standard
that describes how to build such a connection or interface is
called an API specification.
 The term API may refer either to the specification or to the
implementation. In contrast to a user interface, which
connects a computer to a person, an application
programming interface connects computers or pieces of
software to each other.
 It is not intended to be used directly by a person other than a
computer programmer who is incorporating it into software.
An API is often made up of different parts which act as tools
or services that are available to the programmer.
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7.  It is simply a mediator (service provider) between the ecosystems
comprising of merchants, consumers, financial institutions, and card
brand networks that process electronic payment transactions.
 The objective here is to ensure that merchants gets paid quickly via
payments processors from the time of authorization to settlement.
Payment solutions often come with additional options such as financing,
security and fraud protection services as well as regulatory compliance
assistance.
 The digital transformation that has happened as a result of the COVID-
19 pandemic has made the payments systems currently even more
relevant as an increasing volume of consumers have started buying
online across the globe.
 The service provider is thus able to connect merchants to the broader
financial system by enabling them to accept credit or debit card
payments or any other secured electronic payment systems via apps.
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8.  Fintech’s - Financial services companies have
been using these technologies for process
automation. And going forward, they plan to
apply them to payment solutions as well.
 Typically, AI will be able to analyze a customer's
operations history, including spending habits, to
predict their future activity. An AI-enabled
system will be assisting in payment activities as
well. Thus a lot of value and analysis can be
provided to the tech savvy customers.
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9. Reduction of paper work for loan request by
customers will be highly streamlined. This
will be by way of simplifying the wiring
channels to increase customer retention for
merchants in the near future. Companies are
going to make the most of the available
technologies that can streamline all loan ,
documentation, KYC, TAT and payment
receipt issues.
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10.  As banks move forward with service integrations,
multichannel delivery is going to become the
industry standard. This will inspire companies to
invest in data analytics and dedicated tools that
offer customer behaviour predictions for tailoring
solutions and recommendations.
 Using technology such as API, IoT, omnichannel
platforms, and open banking, brands will strive
to provide a seamless experience to users to
convince them to stay on-site and complete the
purchase.
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11.  Large brands who extensively use social media to
promote their products across the various sections of
consumers will be forced to use API, IoT,
Omnichannel platforms, open banking platforms to
strive to provide seamless experience to users to
convince them to stay on-site.
 Tech savvy banks will move fast in 2022 with service
integrations for multichannel delivery where data
analytics will play an even bigger role to understand
customer behaviour predictions for tailoring solutions
and recommendations for easing online shopping
and payments, delivery and returns management and
refunds.
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12.  Omni-channel commerce is actually a multichannel
approach to sales that focus on providing seamless
customer experience whether the client is shopping online
from a mobile device, a laptop or in a brick-and-mortar
store.
 Multichannel commerce sells your product to your
customers on different channels, both online and offline.
The selling merchant interacts with customers via social
media, by phone and in physical store. Customer’s online
presence is on point and the customers know where to
find a merchant. The big difference is that omni-channel
commerce connects all channels. This means that
customer has a seamless experience across all platforms.
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13.  Customers now-a-days want to complete a task as
easy as possible. Choosing the most straightforward
payment option is driving the trend in payments.
 As an example, smart cars now come with integrated
payment solutions that allow drivers to easily pay for
gas and parking fee with a click of the button within
the car.
 Such connected devices can communicate with each
other, so companies are going to turn more and more
to the Internet of Things as an integral part of their
technology stack.
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14.  Banks will use Payment solutions to integrate
with other systems to increase customer
retention and deliver experiences via up-selling,
cross-selling other banks products.
 Social media apps as Instagram, Twitter and
Facebook, have a provision for direct purchases
through social media. Retailers have also
introduced quick checkouts for frictionless
processes. Banks will include multiple mobile
payment options to appeal to end users.
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15.  For cross-border payments and finding new
alternative methods to streamline payment
systems, Blockchain will see an uptake in its use
as the only technology for Bitcoin and many
other cryptocurrencies used around the world.
 Blockchain is a decentralized and shared ledger
where an entire network needs to approve a
transaction before it is recorded. And once
documented, the record can no longer be edited.
This will turnout to be a most popular trend for
international cashless currency transactions
across borders an banks can audit the entire flow
anytime.
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16.  The payments industry is going to inspire
partnerships and become a large collaborative market
place, mainly due to such trends as increased use of
mobile phones, cloud computing, and general
changes in customer behaviours.
 There is ongoing huge influx of non-bank players
from both tech startups and technology giants
presenting more competition for banks. Today
fintech startups are transforming the banking
industry by capturing trends like smartphones and
mobile channels, as well as rapidly evolving customer
expectations. Banks need to gear up with new
capabilities, solutions, and operating models to stay
in business.
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17.  This is the process of de-identifying sensitive cardholder
data by converting it to a string of randomly generated
numbers called a "token." Although similar to encryption,
tokenization changes the original data to render it
unreadable in the event of a data breach.
 Also credit card tokenization is irreversible, and tokenized
credit card data can be stored inside an organization's
cardholder data environment. It can also be deployed in a
format and length-preserving fashion to retain much of
the business utility of the original, sensitive cardholder
data. This enables organizations to operate with minimal
disruptions to their existing business processes and
contain cybercrime issues.
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18.  Digitization, regulatory organizations and
payment companies across the globe made
use of technology to get closer to their
customers and understand their spending
habits, Banks have realised this and are
adopting a collaborative approach with agile
players to increase their business and combat
frauds in open networks situations. 2022 will
see increased smartphone penetration due to
the booming e-commerce activities by
adopting digital wallets.
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19.  Mr. Nanjundaiya Ramesh Kumar, is a multilingual marketing expert with dual
Master’s degrees in Industrial Economics from Brussels University, Brussels,
Belgium, and in Business Administration from Boston University, Boston, US. He
currently resides in Malleswaram, Bengaluru, India.
 A career International Banker with over three decades of work experience in well-
known International Banks in diverse countries as Greece, Belgium, UK, Egypt,
UAE, Oman, Saudi Arabia, and India. A widely travelled person across various
continents and with a deep interest in banking, fintech, communication,
international trade, global culture and international student mobility. His forte is
franchise promotion and exploring and assisting in furthering two-way bilateral
relations and investment avenues. To this end, he has developed a global mindset
and specializes in driving economic change and social impact in this fast paced
digital economy by networking to build international collaborations and
relationships.
 He initiates sharing of best practices in commercialization of technologies,
innovation, and sustainable business ecosystem to foster entrepreneurship, new
learning's in the local community to bring in stakeholders together to facilitate
business opportunities across borders. Well versed with foreign delegation visits,
organizing international seminars, facilitating overseas business immersion,
executive education & start-up programs, and also delivering his thoughts as a
Chief Guest speaker at various academic forums as well.
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