Navigating Digital Payments - Reshaping customer experience by simplifying complexity
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Navigating
Digital Payments
Reshaping customer experience
by simplifying complexity
2021 Edition
“Payment processing is like an iceberg.
Just a small part sits visible above the waterline;
the vast majority sits below the surface.”
2 Navigating Digital Payments
Foreword
I have often felt that payment processing is like an iceberg. Just a small part
sits visible above the waterline: the cards, devices and apps that people use
to pay with. The vast majority sits below the surface: the array of organisations
and systems that ensure money is routed from payer to payee.
We observe every day that the payments space is changing rapidly, in innovative
and disruptive ways. And these changes quickly ripple out to retailers and the
many other businesses who depend on payment technology daily.
In March this year, I launched the Worldline Scientific Community and challenged
them to identify the key trends that will drive innovation in payments. This is what
they have done in this report. Here you will find their vision of how payments
may look in 2030 and what that world could be like, based on the trends they
have analysed. To some readers, their vision may seem futuristic but, in the rich
and granular chapters that follow, you will see that all of this, and more, could
be achieved with innovations that already exist In some form today.
They have also confirmed the iceberg analogy. They have described an ongoing
duality of complexity and simplicity. Complexity of the payment landscape.
Simplicity for the consumer and the merchant. They talk about the gap between
these as the Pay-Xperience gap, and they predict that it will grow.
I believe them. This gap will continue to grow. And therefore more skill, ingenuity,
innovation and technical know-how will be needed to bridge it.
And this is where the role of payment service providers will become even more
critical than it is today. Complexity is increasing: in cross border payments,
omni-commerce, the range of payment methods, and a plethora of other areas.
But it is ultimately payment service providers who must orchestrate all of these
diverse payments systems and technologies to simplify them for consumers
and merchants.
This is why, in my role as Worldline’s CEO, I ensure that
we take action every day to make sure we have the
necessary strength to address this challenge. It is why
we have built, and continue to expand, a company that
can offer payment acceptance on a global scale, offering
the best user experience, whilst partnering with financial
institutions to ensure the highest levels of trust and security.
I hope you will enjoy reading this report as much as I did,
and that it will help you to understand the key trends
in payments and what this may mean for your organisation.
And know that Worldline stands ready, as your trusted partner,
to support you on the road ahead.
Gilles Grapinet
Worldline CEO
Paris, France
Navigating Digital Payments 3
A glimpse into the future
The year is 2030. It is a sunny summer Once all of this was done, you were As you unpack your delivery, you think
morning and you are just finishing quickly consulted to check you were about the amount of effort that your
a relaxing breakfast together with happy with the proposals. smart agent saves you, giving you
your family. more quality time with your family and
Then, after your agreement, the agent
friends, and to enjoy your hobbies.
The doorbell rings for a delivery of autonomously completed payment for
several essential household items on the order on your behalf using a digital Of course, many people are still wary
which you are running low, plus your currency known as the ecoDigiCoin. of the data sharing that underpins
food for the week. But you never placed this service.
this order or booked this delivery
This is why regulations insist that
slot. Instead, a loyal, autonomous,
The ecoDigiCoin was designed such agents must be proven to be loyal
context-aware smart agent placed it
specifically to have low power to their user (not the company who
on your behalf.
consumption and enable built them or any other third party)
Using data from IoT devices in your transactions to be completed and that privacy-preserving techniques
home combined with knowledge of without requiring plastic cards or must be used to ensure that data is
your past habits, the agent identified dedicated hardware. only shared and used in a trusted
the products you needed. and controlled manner.
To encourage adoption,
Using knowledge of your budget, governments provide tax
spending habits and loyalty incentives for its use, which are
programmes enabled identification implemented as smart contracts.
of the best supplier on your behalf
It is also how you have chosen
(taking into account availability and
to receive your salary, as it is
delivery costs).
now more widely accepted by
Using knowledge of your diary and merchants than cash.
habits the agent chose a convenient
delivery slot.
4 Navigating Digital Payments
After unpacking your Once on the high street, As you continue along Next you meet some friends
delivery, you decide to you receive an alert on the high street, you walk for a coffee. Here again
go shopping for some your phone. Some shirts past a musical instrument you enjoy the personalised
new clothes. you were viewing online the shop. Suddenly you make service of the barista who
night before are available in an impulsive decision to buy recommends a new coffee
You step outside and an
the shop you are just walking a guitar – you have always blend that they think you
electric vehicle is waiting
past, with a promotional wanted to learn to play one! might enjoy, as well as
for you. It is self-driving
offer available today. talking you through their
and arrived at your front Inside the store you check
You visit the store to look at patisserie menu.
door whilst you were eating that the guitar is genuine by
them. Before trying them on,
breakfast. scanning a QR code which After this you can relax
you enter their immersive
validates the full traceability and share stories with
Rather than owning virtual fitting rooms, where
of its production – including your friends as the drinks
a car, you pay only for you can quickly see how the
which parts were recycled and cakes are brought to
the kilometres you travel clothes will look on yourself
from discarded instruments, your table, with payment
in shared autonomous without having to change
giving you full visibility of the (including an ecoDigiCoin
vehicles. into them.
environmental impact of your tip paid directly to the
Predictive analytics powered After this, you try on purchase. barista) quickly taken care
by artificial intelligence physically the ones that you of by your eWallet, with no
After you buy it, the digital ID
make sure that one is like the most and ask one of need to split the bill or store
contained in your eWallet is
available when you need it, the shop’s fashion advisors a physical receipt.
used to add your ownership
and this sharing economy for some suggestions for
onto the traceability After this social time with
model is also reducing the trousers that might be a good
blockchain. friends, you decide to take
environmental impact of match. Finally, you choose
the tram home. Just as with
travel. The payment for your three shirts and two pairs of Many years ago, this type
your car, you only pay for
journey is automatic. trousers, thank them for their of high-value, atypical
the kilometres travelled.
helpful advice, and walk out transaction might have been
After you step out to go And you do not buy a
of the shop without passing blocked as suspected fraud.
shopping, the car drives ticket or make a payment.
through a checkout, with However, the permissioned
itself to a charging hub Secure facial recognition
payment made automatically and secure sharing of
(where it also autonomously is used to register your
based on biometric data means that your
pays for the recharge). journey, which is then paid
identification from your earlier journey, your recent
for using your preferred
palm scan. In this case your purchases, and the location of
method (direct debit in this
eWallet has determined that your phone and exactly how
case, as it entitles you to
a cash-back offer associated you hold and move it can all
a 10% discount with this
with your credit card account be used to validate that this
transport operator).
would make this the preferred transaction is legitimate.
method of payment. You arrive home eager
Of course, this has only been
to show your family your
The high degree of automation possible because of the
purchases and share the
at the checkout is what advanced fraud detection
news from your friends,
gives the staff plenty of time machine learning algorithms
as you enjoy your evening
to provide you the highly that are now commonly
meal together.
personalised advice and in use.
attention that you have enjoyed.
Navigating Digital Payments 5
We have a passion for finding innovative ways
to help our clients deliver the best possible
experience to their customers.
6 Navigating Digital Payments
Executive Summary
In the coming years, the experience of making and As the European leader in payments, understanding
receiving payments will be transformed. Many innovations the complex payment landscape is our day-to-day
that are currently gaining traction will mature and business. We combine this deep expertise with a passion
converge to create a level of convenience that would for finding innovative ways to help our clients deliver the
once have seemed like science fiction. Orders will be best possible experience to their customers.
placed and paid for autonomously. New business models,
digital currencies and traceability solutions will enable To help you understand this gap, we have analysed
greener ways of living. Much of this will be powered it from three perspectives:
by data sharing, which will utilise privacy-preserving
technologies to ensure security and trust. And fraud
detection techniques will advance to improve protection Unification Taming Diversification
whilst reducing friction. How can the proliferation of business
models and new forms of currency
This advance will be driven by the fact that business be tamed to create straightforward,
success is closely tied to the quality of the end-to- sustainable solutions?
end customer experience that companies offer, with
studies finding that those who deliver better customer Seamless Interactions Amidst
experiences earn greater revenues and achieve higher Accelerated Digitalisation
valuations. How can secure, inclusive digital solutions
be built that enable new in-store
The payment experience forms a crucial part of experiences and autonomous payments?
this overall customer experience. A poor payment
experience can lead to customers abandoning their Implicit Trust from Regulations
purchases. Conversely, a payment experience that How can the regulatory landscape and
is perfectly matched to the customer’s needs can the protection of privacy be embraced
not only help them smoothly complete a transaction, in a way that will enable the data economy
but can also increase loyalty, boost repeat custom and trust at the point of sale?
and elevate brand perception.
However, providing this type of payment experience In a document of this size, it is not possible to give
is not straightforward. This is due to a fundamental a comprehensive treatment of every aspect of the
duality that exists. The payment landscape has grown payment experience. Therefore we have focussed
in complexity and will continue to do so. However, only on those topics where we expect there will be
consumers increasingly expect the payment experience the greatest change over the medium term and where
to be simple. They do not want to consciously think we believe businesses need to start their preparations
about or choose the channel or payment method now. For each of these topics, we provide a summary
to use. And they do not want to keep multiple cards of the current state-of-the-art, the changes we are
in their physical wallets, use multiple e-wallets on anticipating, the challenges on the horizon and the
their phones, or even install different apps depending choices that organisations must plan for now. For some
on who and where they are paying. of these topics we have already published more in-depth
papers which go into greater detail, and we will continue
We call this chasm between the complexity of the to publish additional, comprehensive papers to further
payment landscape and the simplicity desired by elaborate on many other topics.
consumers the payment experience gap. We are
convinced that this gap will continue to grow. We are We hope that these insights will help you to determine
equally convinced that those organisations who can how your business and market will change in the
successfully understand and bridge this gap will be coming years, and how you can successfully deliver
better placed to compete in their markets and deliver a great experience to your customers with a perfectly
long term prosperity. complementary built-in payment experience.
Navigating Digital Payments 7
8 Navigating Digital Payments
Contents
Foreword ............................................................................................................................................ 3
A Glimpse Into The Future ................................................................................................................ 4
Executive Summary ........................................................................................................................... 7
Introduction ....................................................................................................................................... 11
Unpacking Customer Experience ................................................................................................... 18
Unification Taming Diversification ................................................................ 22
New Business Models ................................................................................................. 23
Digital Currencies ........................................................................................................ 25
Context Aware Services .............................................................................................. 28
Green Payments by Design ......................................................................................... 33
Seamless Interactions Amidst Accelerated Digitalisation ........................... 38
Digital Theft and Fraud ............................................................................................... 39
The Digital Divide ......................................................................................................... 42
The Renaissance of Physical Stores .......................................................................... 45
Autonomous Payments ............................................................................................... 50
Implicit Trust from Regulations ..................................................................... 54
Governmental Priorities ............................................................................................... 55
Privacy .......................................................................................................................... 58
The Data Economy ....................................................................................................... 61
Counterfeit Detection at Scale ................................................................................... 63
Conclusion ......................................................................................................................................... 67
Acknowledgements ......................................................................................................................... 70
Navigating this report
To get the most out of reading To help you with this, we have
Retailers and Merchants
this report, we recommend identified the relevance of each
reading the chapter A Glimpse Into chapter to different sectors using
The Future (p.4) and the Introduction the icons shown on the right. Financial Institutions
(p.11), which together provide an
overview of the main concepts Of course, this is intended as a guide
in this report and how they relate only. For example, if you work for Manufacturing
to each other. a financial institution you may still be
interested in The Renaissance of
After this, you can read the whole Physical Stores (p.45) or Counterfeit Transport
report sequentially if you wish, Detection at Scale (p.63).
but you may prefer to jump straight To further aid your navigation
to the chapters that you find through the document, major Public Sector
most interesting. links between chapters are also
highlighted in the text.
Navigating Digital Payments 9
Transforming adoption and usage of products
and services requires that the experience
of using them is transformed as well.
10 Navigating Digital PaymentsIntroduction
When we look at the history of Internet into what it is today.
innovation, we see that one of the key
factors that has driven the success of Going further back in time, the first
products and services is the overall touch screen was invented in the
end-to-end experience. 1960s6. For decades, touch-screens
failed to become mainstream. They
The first digital camera was invented by were expensive, but also they did
Steven Sasson at Kodak in 1975. It was little more than try to reproduce the
an impressive engineering achievement, functionality of a computer mouse or
but weighed 3.6kg and took 23 seconds keyboard, but with less accuracy and
to store a single 0.01 megapixel black responsiveness. This changed in 2006
and white picture to a cassette tape1. It when LG (followed closely by Apple)
was certainly innovative, but it did not released the first smartphones where
offer an experience that could compete the physical keypad or keyboard was
with the film-based cameras of the entirely replaced by a touch screen.
day. Now, over 100m standalone digital Today, with over 6 billion smartphone
cameras are sold every year2, and subscriptions worldwide7, touch
almost all phones have multiple digital has become a ubiquitous way for
cameras built into them. Size and cost people to interact with their devices.
have been reduced. Speed and quality Advances such as multi-touch,
have improved. Furthermore, the way support for gestures, inertial scrolling,
we share photos has changed, from and ecosystems of applications and
prints manually arranged in physical websites that are designed to work well
photo albums, to being instantly shown via a touch interface, have transformed
to friends and family via social media. an unenticing experience into one that
Today’s experience of photography has people desire.
been transformed beyond recognition
compared with its film-based equivalent These are just three examples. But from
of the past. them we can see that transforming
adoption and usage of products and
At around the same time as the birth of services requires that the experience of
the digital camera, Vinton Cerf and Bob using them is transformed as well.
Kahn created the foundations of the
Internet in 19743. It required tech-savvy
users, who had access to expensive
Brands that improve customer
computers, and who were comfortable
journeys see revenues
interacting through a command-prompt.
increase up to 15%
This experience has been transformed.
In 1989, Sir Tim Berners-Lee proposed This lesson from history is also backed
the content management system now up by many studies. For example,
known as the World Wide Web which Forrester found that, compared
spawned a surge in websites from to their peers, the ten companies
just 130 in 19924 to 200 million active providing the best customer experience
websites in 20215. The combination outperformed the S&P index, with close
of user-friendly web browsers, to triple the returns8. A similar study by
affordable and fast connectivity, and an KPMG found that the top 10 brands for
abundance of frameworks and tools for customer experience saw four times the
creating web content and applications, year-on-year revenue and profit growth
has transformed our experience of the of those ranked in the lowest 109.
1 https://www.diyphotography.net/worlds-first-digital-camera-introduced-man-invented/
2 https://www.statista.com/statistics/1172711/forecast-of-digital-camera-sales-volume/
3 https://www.historyofinformation.com/detail.php?id=915
4 https://absolute.digital/magazine/seo/the-growth-of-the-internet-from-1990-to-2019/
5 https://techjury.net/blog/how-many-websites-are-there/
6 https://www.thoughtco.com/who-invented-touch-screen-technology-1992535
7 https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/
8 http://uxdesign.uw.edu/why_do_ux.html
9 https://assets.kpmg/content/dam/kpmg/br/pdf/2017/11/the-connected-experience-imperative-uk-2017.pdf
Navigating Digital Payments 11Introduction
Seamless
Interactions
Un
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Pay-Xperience Simplicity
Payment Landscape Complexity
Div
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Accelerated
Digitalisation
Figure 1: The duality of complexity and simplicity in payments.
Pay-Xperience is critical to customer Simplifying complexity
experience
Figure 1 illustrates this duality. On the one hand, the payment
All businesses need to collect payment for the goods or landscape has grown in complexity and will continue to do so.
services that they sell. Therefore, the experience they There is huge diversification: in the ways that people can pay,
provide for accepting payments forms a key part of the in the number of companies offering payment services, and
overall customer experience they offer. We call this the in the business models that are being offered. Digitalisation
Pay-Xperience (or PX), and it is the critical moment where has accelerated, creating many new technological options
an exchange of value between supplier and customer is for implementing solutions, but also creating new risks from
completed. It is when a prospect becomes a purchaser; it is cyber-crime, as well as potentially alienating some groups
when a browser becomes a buyer. of users. And the regulatory landscape is complex and
continuing to evolve.
A slow, difficult or jarring PX will negatively impact the overall
customer experience and can lead to a customer abandoning
their purchase altogether.
Behind-the-scenes complexity is
increasing, whilst consumers and merchants
A fast, easy and frictionless PX will positively support the
seek greater simplicity
overall customer experience, leading to higher conversion rates,
increased repeat business and improved customer perception. On the other hand, the desire of consumers is for payments
to be simple. They do not want to have to manage multiple
In most cases, the moment of payment is a mere chore for digital identities or read complex agreements regarding the
the customer: a hurdle that must be overcome. For these use of their data. They do not want to consciously think about
situations, a PX that is as frictionless as possible, or even or choose the channel or payment method to use. And they
invisible, is desirable. do not want to keep multiple cards in their physical wallets,
use multiple e-wallets on their phones, or even install different
In some cases, the moment of payment is a point of joy apps depending on who and where they are paying. Similarly,
and celebration: completing the purchase of a luxury car or merchants also appreciate simplicity. They would prefer not
confirming the booking of a dream holiday. In the customer’s to have to sign multiple agreements with different providers,
mind, the payment represents the conversion of a dream into nor do they wish to have multiple hardware devices in order to
a concrete reality. In such cases, the PX should accentuate accept different payment means. And they want consolidated
these positive emotions. reporting and reconciliation for all transactions, regardless of
the channel or location in which they occur.
However, providing a natural PX, that accentuates
and supports the overall customer experience, is not This is the dichotomy: behind-the-scenes complexity that
straightforward. The challenges of a complex payment is increasing, whilst consumers and merchants seek greater
landscape have to be managed to provide simplicity at the simplicity.
point of use.
12 Navigating Digital PaymentsIntroduction
Seamless Context Aware Services p.28
Interactions
Green Payments by Design
p.33
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Payment Landscape Complexity
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New Business Models p.23
a
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Digital Currencies p.25
Accelerated
Digitalisation
Figure 2: Unification Taming Diversification.
The axes of duality the years by debit and credit cards, The scale of diversification
pre-paid cards, online bank transfers, is immense; the challenge
To help understand this interaction direct debit and, more recently, is how to unify it
between simplicity and complexity in digital currencies (with already over
payments, we have identified three 100 digital currencies having a market
As illustrated in Figure 2, we will
axes of duality (also shown in Figure 1). capitalisation of over $1 billion10).
explore in more detail New Business
The options for how these payment
Models (p.23) and Digital Currencies
We do not see these as a battle means can be triggered has also
(p.25) as two key drivers of further
between good and bad. Diversification, expanded. Physical cards, e-wallets,
diversification. We will also look at how
accelerated digitalisation and regulation pay-by-link and QR-codes are just
hyperautomation will enable Context
may add complexity, but they are some of the different ways that users
Aware Services (p.28) to simplify
all stimulating innovation, providing initiate payments today.
these ecosystems for the end user
consumers and merchants with greater
and we will examine how the critical
choice, and enabling new solutions The number of companies offering
goal of Green Payments by Design
and business models. The goal payment related services has also
(p.33) can only be achieved by working
should not be to avoid or eliminate grown. Once the preserve of a handful
across organisations and taking a fully
them, but rather to leverage them as of highly regulated institutions,
joined-up approach.
springboards for driving simplicity the financial sector now has many
in payment experiences. disruptive players, with the number of
FinTechs worldwide continuing to grow
Seamless Interactions Amidst
We will now explain each of these and reaching over 25,000 this year11.
Accelerated Digitalisation
dualities in a little more detail and use Many are applying new technologies
The Covid-19 crisis has accelerated
them to introduce the topics that we to old problems and testing disruptive
digitalisation12. In retail, we have seen
will cover in the rest of this publication. business models.
shops with little or no online presence
implement online commerce, including
Unification Taming The scale of diversification is immense;
options like click-and-deliver, click-
Diversification the challenge is how to unify it.
and-collect and live-stream-shopping.
Banks have had to move entire call-
Never before have there been so many Collaboration between the different
centres into a home-based mode
possibilities for how people can pay. members of the payments ecosystem
of operation.
The long-standing options of cash will be key, and this will depend on
and cheque have been joined over interoperability.
10 https://coinmarketcap.com/all/views/all/ accessed on 6/9/2021
11 https://www.statista.com/statistics/893954/number-fintech-startups-by-region/
12 https://worldline.com/content/dam/worldline/documents/publications/whitepapers/the-world-after-covid19-white-paper.pdf
Navigating Digital Payments 13Introduction
The Renaissance of Physical Stores p.45 Autonomous Payments p.50
Seamless
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Un
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Payment Landscape Complexity
Div
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Digital Theft and Fraud p.39 The Digital Divide p.42
Figure 3: Seamless interactions amidst accelerated digitalisation.
Alongside this, technology has continued to advance. and becomes even more excluded, leading to an increase
Artificial Intelligence (AI) is being used to automate tasks in The Digital Divide (p.42). In terms of how truly seamless
that previously would have required human intelligence, interactions can be implemented, we examine both how this
and it is now being applied at scale and to a wider range will lead to The Renaissance of Physical Stores (p.45) and
of use-cases13. The growth of the Internet of Things (IoT) is how Autonomous Payments (p.50) can create frictionless
continuing to surge, enabling a vast array of new solutions14. and invisible payment experiences.
Implicit Trust from Regulations
The technological landscape is
increasingly convoluted; the challenge The changing regulatory landscape provides an insight into
is how to make the experience what governments are prioritising for the future as they
seamless for end-users seek to represent their citizens. We see that sustainability,
protection, sovereignty and innovation are currently the key
The technological landscape is increasingly convoluted; drivers for governments around the world.
the challenge is how to make the experience seamless
for end-users. Payments is a highly regulated industry. Of course,
compliance with regulations is mandatory, but businesses
With this trend towards seamless interactions, users will be that focus only on maintaining this compliance may be
able to switch channels so easily that they will no longer missing out on the opportunities that many regulatory
even notice it. An interaction via a chat-bot could switch changes create.
seamlessly to a call with a live operator. A shopping cart
could be started in a browser, added to via a mobile app, and Understanding the details of the multiplicity of payment
completed in-store. A return and refund could be completed regulations is essential; the challenge is how users can
at the same time (and same place) as a new purchase. implicitly trust every transaction.
As illustrated in Figure 3, we will explore how the rapid Trust underpins all transactions. It is conditional on all
advance in the capability and adoption of technology is parties involved in the transaction having confidence that
creating challenges. With more being done in the digital the outcome will match their expectations (or they will have
world, the risk of cyber-crime grows. This advancing threat some recourse to resolve any issues that do occur).
of Digital Theft and Fraud (p.39) must be combatted. There
is also a danger that, as many of us move to more digital
ways of living our lives, a smaller minority remains left behind
How can users implicitly trust
every transaction?
13 https://worldline.com/content/dam/worldline-new/assets/documents/whitepapers/hyperautomation_in_payments.pdf
14 https://worldline.com/en/home/knowledgehub/publications/download-autonomous-payment.html
14 Navigating Digital PaymentsIntroduction
The Data Economy p.61 Seamless
Interactions
Counterfeit Detection
at Scale p.63
Un
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Payment Landscape Complexity
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Governmental Priorities
a ti
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p.55
on
Accelerated Privacy p.58
Digitalisation
Figure 4: Implicit trust from regulations.
Consumers must be able to trust that when they purchase ways to create implicit trust: the challenges and opportunities
goods they will receive them; if half of the orders they place offered by The Data Economy (p.61) and how Counterfeit
are never delivered, they will most likely stop purchasing from Detection at Scale (p.63) can provide consumers with
that vendor, even if refunds are provided. confidence in the products they are buying.
Merchants must trust that they will receive the money that The interplay between the dualities
consumers pay them; if too many transactions do not arrive
or are for the wrong amounts and require manual intervention There is a complex interplay between each duality.
to resolve, then they will look for alternative ways to collect
their income. Merchants also need to be able to trust that, For example, the rise of unregulated digital currencies
for example, someone is above the legal age limit for buying such as Bitcoin has led to governments reacting in various
certain goods (e.g. alcohol). ways. India is proposing to ban cryptocurrencies15 while
the EU is suggesting a regulated alternative with the Digital
With accelerated digitalisation, more and more data is being Euro. At the same time, digital currencies could provide an
collected about individuals and companies. Every transaction attractive underlying payment mechanism for implementing
generates a huge number of data points. With this state of autonomous payments.
affairs, there is a need for trust that the data will be stored
securely and not misused. Another example is how certain regulations, such as PSD2,
are opening up access to data, leading to an increase in
People also want to know that claims about the provenance diversification (as FinTechs build new services on top of the
or sustainability of products and services they are offered are data previously only accessible to banks). At the same time,
factually correct. PSD2 is enabling the unification of services by enabling the
aggregation of people’s banking information. It also provides
As illustrated in Figure 4, we will explore in more depth opportunities to derive new value from data, thus supporting
Governmental Priorities (p.55), including how they will evolve the data economy. Furthermore, PSD2 is impacting the in-
and how they will impact businesses. We follow this with a store shopping experience with, for example, PIS (Payment
more detailed look specifically at the evolution of Privacy Initiation Services) reducing the friction of an account-to-
(p.58), from both regulatory and technological perspectives. account payment.
We also consider several aspects related to the need for and
15 https://www.reuters.com/article/uk-india-cryptocurrency-ban-idUSKBN2B60QP
Navigating Digital Payments 15Introduction
Seamless
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ina
Susta bility
Un
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Payment Landscape Complexity
S us
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Digitalisation
Figure 5: Sustainability impacts everything.
Sustainability Reshaping customer experience will need to make choices now in order
by simplifying complexity to capitalise on the opportunities
Not only is there a complex interplay they bring.
between each duality, but we also In this introduction, we have underlined
see that the topic of sustainability the importance of customer experience We remain convinced that, at least in
has reached such a critical point that and explained how the Pay-Xperience the short to medium-term, the level of
its impacts are felt everywhere (as is a key component of this. We complexity will continue to increase.
illustrated in Figure 5). We have a believe that successfully delivering a We are equally convinced that the
chapter dedicated to Green Payments great Pay-Xperience will increasingly expectations of consumers and
by Design (p.33), and you will also depend on simplifying complexity: merchants will be for experiences that
see that sustainability is touched on in managing divergence, digitalisation and are simpler. As illustrated in Figure 6, this
many other places. It is a clear focus of regulation, to provide trusted, seamless creates a growing Pay-Xperience Gap.
governments and will shape how they and unified payment experiences.
choose to tax, spend and legislate in Our belief is that those organisations
years to come. It is shaping the desires We have identified three axes of duality. who can successfully understand and
of consumers, who will increasingly Along each one we have identified key bridge this gap, will be better placed
want to make informed choices about topics where there will be changes and to compete in their markets and deliver
products and services, taking into challenges, and where organisations long term prosperity.
account the environmental impact they
will have. Businesses not only have to
anticipate these changing demands
from governments and consumers, but Complexity of the payment landscape
also the new opportunities opened
up by models such as the circular
economy or sharing economy.
As such, you will see that sustainability Pay-Xperience Gap
is a recuring theme which is examined
from many different angles in later
chapters.
Level of complexity
expected by consumers
Time
Figure 6: Increasing complexity of the payment landscape versus
consumer expectations.
16 Navigating Digital PaymentsIntroduction
Navigating Digital Payments
To summarise, Figure 7 provides a full overview of the topics We hope that these insights will help you to think about how
we have introduced so far. In the next chapter we will start by your business and market will change in the coming years,
unpacking customer experience: addressing what we mean and how you can successfully deliver a great experience
by a great customer experience, what the challenges are in to your customers with a perfectly complementary built-in
delivering it, and how it will evolve into the future. In the rest payment experience.
of this report, we will explore each duality in more detail.
The Renaissance of Physical Stores p.45
Autonomous Payments p.50
The Data Context Aware
Economy p.61 Services p.28
Seamless
Interactions
Counterfeit Green Payments
Detection at by Design p.33
ina
Scale p.63 Susta bility
Un
Tru licit
st
ific
p
Im
ati
on
Pay-Xperience Simplicity
Payment Landscape Complexity
S us
ty
bili
t ai
Div
in a
ion
na
ers
ta
lat
bi
y
i
us
fic
gu
S
lit
ati
Re
New Business Governmental
on
Models p.23 Priorities p.55
Digital Accelerated Privacy p.58
Currencies p.25 Digitalisation
Digital Theft and Fraud p.39
The Digital Divide p.42
Figure 7: Navigating Digital Payments.
Navigating Digital Payments 17Great customer experience is ultimately the sum
of many tangible and intangible characteristics that
together create value and a positive connection.
18 Navigating Digital PaymentsUnpacking Customer Experience
Delivering a great customer experience is not an easy thing to secure and complete. Then there are new expectations,
do. Moreover, the payment experience dimension nested within for example that the experience should be hyper
is, as discussed already in the introduction, beset by a series personalised and accessible instantly.
of dualities that can mean that making it seamless is more
complicated than perhaps many businesses might expect. These qualities are the essence of what underpins a great
customer experience, which is ultimately the sum of many
Much of what customers need, want or expect is muted and tangible and intangible characteristics that together create
unspoken but, nonetheless, present and ready to surface value and a positive connection.
if they are not satisfied. We can characterise the essence
of these needs, wants and expectations as illustrated This backdrop provides clues to the challenges faced
in Figure 8. There are aspects that are obvious, such as in delivering a great customer experience and the basis
a product or service being simple to use and of good quality. to examine how organisations can take the experience
Then there are essential criteria like being trustworthy, they offer to the next level.
Obvious Essential New expectations
Quality of Experience Supported, Guided & Optimised Hyper Personalisation
Blend of Technology Coverage of the Journey Instant/Real Time
and Human Touch
Trust Context & Proactivity
Intuitiveness
Figure 8: Characterisation of customer experience needs, wants and expectations.
The aspects of customer experience the whole customer journey, with attention to detail being key.
Knowing when to be attentive versus when to automate, or how
In the following pages we consider in more detail each of the to reduce the steps involved or improve the guidance offered,
aspects of customer experience illustrated in Figure 8. are the kinds of things that have to be perfectly matched to
the brand expectation. One topical example today is electric
Quality of experience - This must equate to a good or great vehicle charging, where Worldline has built the WL Easy EV
experience versus the individual customer’s expectation. payment solution, to address the challenge of providing a
Unless there is good reason, customers will not tolerate poor simple, smooth and secure customer experience based on
experiences, they will simply vote with their feet by migrating simplified acquiring coverage over Europe18.
to an alternative, better solution or service. One customer
Blend of technology and a human touch - Great service
experience survey found that “only 1 out of 26 unhappy
never goes out of fashion, and new technology can enable
customers complain, the rest churn”, with 67% of that churn
great service to be provided in new and innovative ways.
being caused by a bad experience16. And a study by Gomez
The key is in blending the efficiency and power of technology
(the web performance division of Compuware) found that a
sensitively with appropriate human interactions, something
single bad experience on a website makes users 88% less
that we will explore more in The Renaissance of Physical
likely to visit the website again17.
Stores chapter (p.45).
Customers’ expectations are constantly evolving. Therefore,
businesses must continually examine what they deliver, how Intuitiveness – The experience and journey must be intuitive.
they deliver it and what feedback they are getting from their Users should not have to understand how it works behind the
customers, in order to identify what needs to be improved. scenes, rather they should be able to use it intuitively and
This applies as much to the payment experience as it does to and trust in the fact it will work.
16 https://www.huffpost.com/entry/50-important-customer-exp_b_8295772
17 http://www.mcrinc.com/Documents/Newsletters/201110_why_web_performance_matters.pdf
18 https://worldline.com/en/home/pressroom/press-releases/2021/pr-2021_04_12_01.html
Navigating Digital Payments 19Unpacking customer experience
Supported, guided and optimised - Just making payment be secure. This requires commitment, attention to detail, and
easy is not enough, the experience offered should be sustained investment in the latest technology that combines
supported, guided and ultimately optimised. Every interaction security and simplicity (such as biometry).
where payment is handled is also an opportunity for further
value creation. Fragmentation - Competition stimulates innovation and
increases customer choice. However, increased competition
Coverage of the journey - Payment is only one aspect of can also result in fragmentation. Having many options
the wider customer journey. The experience should link from available can lead to confusion.
stage to stage seamlessly, letting the customer navigate a
simple, intuitive course to their destination. For example, Organisational capability and readiness - Organisational
combining a scan and go solution (such as Worldline Scan readiness for change is a multi-level, multi-faceted construct.
& Pay19) with store loyalty services all leads the customer When organisational readiness for change is high, businesses
towards making a payment, but provides value through the are more likely to initiate change, exert greater effort, exhibit
information and discounts offered en route. Payment may be greater persistence and display more cooperative behaviour.
the destination, but the journey looks to reward the customer Of key importance is the organisational culture which needs
with choice and loyalty recognition along the way. to embrace open-minded and experimental approaches
to transformation. These values must be exemplified by
Trust - Key to every successful payment journey is a company’s leadership, who must also articulate an inspiring
confidence that it will work and that it will work safely and vision which will encourage people to persevere, even when
securely. Customers need reasons to allow their trust to be faced with challenges along the way.
won and sustained: no trust, no business.
Technical debt – As we will see later, today’s great customer
Hyper personalisation - Traditionally, consumers have experiences rely on technology, yet many organisations have
always enjoyed and valued personalised experiences. an application landscape that contains much legacy software
Visiting a restaurant and being asked by the waiter if you (often with large amounts of accumulated technical debt).
would like your “usual” table, or having a suit made-to- These can be difficult and costly to adapt which reduces
measure by a skilled tailor are just two examples of this. agility. However, the investment needed to modernise or
Hyper personalisation uses technology to tailor the customer rewrite them can also be substantial.
journey to meet the needs and expectations of the individual,
blending the right level of intimacy with the context of the Market readiness - With the current pace of change,
demand and the customer’s attitude to privacy. tensions can open up between those ready and able to
move and those resistant and fearful. As one side pushes
for a digital future, the other resists the pace. This is a topic
Hyper personalisation uses we explore in more detail in The Digital Divide chapter (p.42).
technology to tailor the customer journey
to meet the needs and expectations Enabling future customer experiences
of the individual
As we look to the future of customer experience, we see
several underlying technologies and approaches that will
Instant/real time - People have become accustomed to
have a key influence:
having “everything now”. Films can be accessed in a few
seconds via Netflix; goods can be ordered and delivered at
The Role of Artificial Intelligence/Machine Learning,
home within an-hour in some locations. And we now have
Data and Intelligent Automation - Artificial Intelligence (AI)
ways of transferring money digitally that are near instant.
is transforming the way businesses interact with customers.
This expectation also extends to how exceptions are handled:
With AI, brands can be available 24/7 at every stage of
re-arranging a failed delivery or returning goods should be
the journey. We expect to see more businesses use this
just as quick and easy as placing the initial order.
technology to synthesise and contextualise customer data
to deliver personalised experiences at scale, using a learning
Context and proactivity - The experience should fit the
process to adapt the route map through both simple and
context; tap and go for charging your electric vehicle or
complex choices. We will explore this topic in more depth
grabbing a coffee, engaging and interactive when individuals
in the Context Aware Services chapter (p.28).
need to be informed or require the human touch.
Connected services - Connected services have changed
Barriers to great customer experience our wider work and life domains so much that people can
now carry out work, leisure, family and travel activities
Of course, creating a customer experience that addresses
at the same time. A long standing example of a connected
all of these aspects comes with a number of challenges:
service is how booking an airline ticket may shift to
suggestions for booking a hire car, taxi, hotel room or
Regulation, transparency and control - Regulation is
parking. What might have been four or five separate tasks
key to the operation of safe, fair and efficient markets.
can now all be done in one place, under one umbrella, with
Even if ensuring compliance with regulation can extend
one payment.
timescales, it ultimately improves the quality and security of
life for consumers. Regulation remains a key feature of the Now Super Apps are taking this a step further, combining
payments landscape: not only ensuring quality and security together services that may seem increasingly disparate in
for consumers but also promoting innovation, for example order to provide convenience for the consumer. For example,
through PSD2. In the Governmental Priorities chapter (p.55) in Latin America, the start-up Rappi provides an app that
we will explore how the priorities of governments are shaping combines food delivery with e-scooters, payments, P2P
the regulations of the future. transfers and movie tickets – it is even possible to ask a Rappi
delivery person to bring you something you have forgotten
Security - Any enhancement of the customer experience to take with you, to walk your dog, or to buy clothes and pay
and, in particular, the payment part of the journey needs to for services20.
19 https://worldline.com/en/home/solutions/pos-and-terminals/scan-and-pay.html
20 https://agiletech.vn/super-apps-examples-review-2021/
20 Navigating Digital PaymentsUnpacking customer experience
This connected services principle can always maintaining a seamless, cross-channel journeys over time which
be applied anywhere in the customer common experience on the most in turn supports and enables the better
journey where one transaction or optimal channel. It makes sense to design of and improvements to the
service could naturally lead to another. let customers pivot their journey in customer experience.
For example, Worldline and Evoke line with their needs. For example,
Creative recently demonstrated a consumer browsing the internet in the Partnerships and ecosystems -
this principle by creating a new evening may see a shirt that catches No single organisation can conquer
railway ticket vending machine21. their attention and add it to their basket all the dimensions required to deliver
With 64 inches of screen space it but go no further. Then, whilst they are the best future experiences. Instead,
not only provides an improved ticket out shopping the next day, they might the landscape will be populated by
purchasing experience, but it also pass the store that sells the shirt and a combination of ecosystems and
offers useful travel information and think a small detour to check it out partnerships. Here, the power of
other targeted, relevant content. would be worthwhile. It looks good big data coupled with the very best
and fits well, but the tills all look really AI algorithms, payment solutions,
busy, so the consumer can go back telecoms, fulfilment and logistics
Let the consumer choose to the saved basket and complete the services and the merchant or service
where they start, stop, purchase on their phone. Experiences provider is going to require better
pick up again and complete like this let consumers choose where design, more emphasis on the points
their purchase they start, stop, pick up again and of connection, greater respect for
complete their purchase. security, regulation and transparency.
Optichannel and channel uniformity For this very reason, we have seen
– Regardless of where and how a Customer journey analytics - the rise of the API (Application
customer starts on their journey, the Customer journey analytics allow Programming Interface) and its
means to switch channel, media, or customer experience, customer care quiet role in helping join pretty much
process should be possible whilst and marketing professionals to measure everything to everything.
Unpacking Customer Experience
Changes Challenges Choices
• People will expect hyper- • Enhancing customer experiences • How could you use data, AI and
personalised customer experiences, must only be done in ways that are other new technology (as well as
where technology is used to tailor secure and remain compliant with humans) to boost the experience
the customer journey to meet their regulations you deliver to your customers?
individual needs and expectations
• Increased fragmentation can lead to • Where could you connect together
• “Everything now” will become a proliferation of options, degrading different experiences and journeys,
the norm, with instant real- customer experience and apply an optichannel strategy?
time responses expected for
all interactions • The readiness and capability of • Which partners and ecosystems
organisations and consumers to could you work with to deliver a
• Increasingly contextualised adapt can limit the pace of change more complete and compelling
experiences will be expected, where for customer experience customer experience?
the nature of the experience is
adapted to fit the context
21 https://worldline.com/en/home/pressroom/press-releases/2021/pr-2021_07_08_01.html
Navigating Digital Payments 21Unification Taming Diversification
Never before have there been so many possibilities
for how people can pay. The scale of diversification
is immense; the challenge is how to unify it.
Context Aware
Services p.28
Seamless
Interactions Green Payments
Un by Design p.33
Tru licit
ific
st
p
Im
ati
on
Pay-Xperience Simplicity
Payment Landscape Complexity
Div
ion
ers
lat
ific
gu
ati
Re
on
New Business
Models p.23
Accelerated
Digitalisation
Digital Currencies
p.25
22 Navigating Digital PaymentsUnification Taming Diversification - New Business Models
New Business Models
The Covid-19 crisis has led many • Distributed sourcing models – technology within virtually every other
businesses (often those that are Avoiding dependence on single product and service — embedded
smaller and local) to digitise their suppliers or distribution chains in everything from transportation
services. This has opened their minds to entertainment to healthcare and
to new ways of selling and delivering beyond”29.
their products and services. Previously
A more digitised world
stable sectors have been driven to
could bring more
intelligent and scalable
reinvent themselves with more digitised The big successes
financing models to
solutions and new business models that in the coming years will be
a much broader spectrum
blend the online and physical worlds, where both new-entrants
of sectors
bringing converged experiences and and incumbents manage to
the need for converged platforms to combine forces
support them.
We expect many of these
transformations will continue and
We saw not only an increase in With the continued rise in FinTechs, the
accelerate, even in unexpected,
traditional retail and resto e-volutions financial services business ecosystem is
previously stable sectors. A more
(such as click and collect, increased now more complex than ever. The small,
digitised world could bring more
takeaway and home delivery), but also nimble new-entrants are often leading
intelligent and scalable financing
emerging new service and business the way in applying the new business
models to a much broader spectrum
models in multiple sectors: from a and operating models we previously
of sectors without introducing
theatre company producing WhatsApp mentioned. These innovations have the
uncontrolled risks. From Philips “Light
reality shows22, through to brand potential to bring improved customer
as a Service”24, Bosh “home connect”25,
new platforms like one that brings experiences. However, we also believe
to financing proposals for merchants
hairdressers and beauty professionals that businesses and consumers value
where the payback automatically
into contact with their customers in the reliability and trust that can only
follows the rhythm of business
pop-up locations or at home23. be provided by larger, more stable
turnover26. These are just some
businesses. We predict that the big
examples of how a more integrated and
Business models had already been changes (and successes) in the coming
digitised world helps to deliver new
moving towards recurring, usage or years will be where both new-entrants
ways to conduct business.
value driven models: and incumbents manage to combine
forces and leverage their unique
• Servitisation – Rather than paying to The age of FinTech 2.0 strengths to deliver innovative and
“own” a product, paying a recurring
trusted services to their customers.
fee to access/use it (e.g. renting a In 2015, it was recognised that,
Indeed, this is one of the reasons we
car instead of buying it) despite a large amount of investment
host the annual e-Payments Challenge,
in FinTechs, the impact of these new,
• Pay-as-you-use – Rather than a where we bring corporations and
innovative entrants to the market had
fixed recurring fee, paying only for FinTechs together with our e-payments
been limited:
how much you use the service (e.g. expertise to co-innovate solutions to
paying for the time spent driving or real-world business challenges.
“FinTech 1.0 has brought only minor
the distance travelled)
disruptions to the banking market,
• Pay-for-outcomes – Rather than mainly in the areas of payments,
The shift to glocal
paying to access or use the service, credit and personal financial advice.
Some major platform providers have
paying only for the value it generates But changes in customer preferences,
reached a scale in their operations that
(e.g. paying for successful trips advances in technology and growing
allows them to innovate and deliver an
completed) investment in FinTech set the scene
unrivalled digital experience, as this is
for more radical change. FinTech 2.0
their main (and often only) touch point
Similarly, operating models have also could mean a ‘seamless specialisation’
with their client base. Many consumers
shifted, with an increasing preference across core elements of the value
have benefitted from such global
for more resilient cost structures that chain whereby a variety of providers
services, which are able to provide:
scale up or down in alignment with combine to deliver cheaper and
the revenue generated, for example easier-to-use propositions to end • Affordable products from anywhere
through: customers.”27
• Broad and rich services
• Cloudification – Enabling businesses
Since then, as mentioned in the • Digital experience excellence
to pay only for the infrastructure
introduction, the number of FinTechs
they require at a particular time,
worldwide is continuing to grow, But people equally value the virtues of
scaling up or down according to
reaching over 25,000 this year. products and services that are provided
demand
Investment in FinTech has also reached locally. One of the lessons that
• The gig-economy – Providing a record highs: $98 billion in the first lockdowns have taught us is the value
more flexible work force that can half of 202128. We now appear to be and fun of physical/local experiences
scale as needed (both in terms of at the cusp of realising this vision for with friends and family, [something we
capacity and skillset) FinTech 2.0, with an expectation that, also explore further in The Renaissance
in the coming years, we “will see the of Physical Stores chapter (p.45)].
widespread integration of financial
22 https://skagen.be/en/home
23 https://www.lipsnrazors.com/
24 https://www.lighting.philips.be/systemen/aanbod-van-pakketten/winkels-en-horeca/light-as-a-service-retail
25 https://www.bosch-home.be/nl/innovaties/homeconnect
26 https://be.worldline.com/en/home/newsroom/general-press-releases/2020/pr-2020_01_13_01.html
27 https://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2015/jun/The_Fintech_2_0_Paper_Final_PV.pdf
28 https://www.altfi.com/article/8210_global-fintech-investment-hits-98bn-in-first-six-months-of-2021
29 https://oakhcft.medium.com/fintech-2-0-the-future-of-money-82b2cf301382
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