FROM CARD-GEN TO NEXT-GEN For centuries, payments meant physical cash or paper instruments. In roughly 60 years from the appearance of the first credit card everything has changed
In 2010, roughly 283 billion non-cash transactions took place. By 2019, that annual volume more than doubled to over 700 billion, and by 2024 it surged to an estimated 1.2 trillion transactions with over three quarters of adults now using some sort of digital payment. Payments are not standing still. Those early plastic cards have given way to a hyper-connected, digital, cashless global economy. By 2020, cashless payments had become mainstream. The past decade saw double- digit annual growth in digital transaction volumes, and the early 2020s accelerated the trend even further. Simply put, the global payments landscape has transformed beyond recognition, and it’s only picking up pace. WHAT IS THE DRIVING FORCE? Behind this boom in digital payments is a revolution in technology. Traditional legacy card processing systems – often siloed, on-premises mainframes – are being replaced by cloud-based, software-as-a- service platforms built on microservices, which break down monolithic cores into modular components that can be updated and scaled independently, enabling continuous innovation. Why does SaaS matter so much in finance? Cost savings and agility. Running on cloud infrastructure can cut IT and application
development costs. Operationally, SaaS and cloud-native architectures let institutions go to market faster. We all have been the observers of challengers who burst into the market with new offers and establish themselves there within a few weeks. New products or updates can be deployed in days or weeks instead of months. In a SaaS model, updates and regulatory compliance patches are handled by the provider, so banks always run on the latest, most secure version. This agility and efficiency is a game-changer. Institutions that leverage SaaS and microservices can innovate rapidly (think instant card issuance) while controlling costs – a serious competitive advantage. RISE OF PAYMENTS The past few years have also seen huge changes in payment methods. Digital wallets, QR code payments, and virtual cards are now part of everyday life. More than 2.3 billion people already keep a mobile wallet on hand, and wallets now power over half of all global e-commerce check-outs. The shift is obvious for APAC, where digital wallets account for about 70 per cent of online spending, which is nearly double North America’s share. Europe is catching up fast: in 2024 one in five UK and German consumers tapped a wallet every week, making it the region’s fastest- rising payment habit. Meanwhile in MEA,
mobile-money rails leapfrog cards – Kenya’s M-Pesa alone now routes 59 per cent of national GDP through phones. QR codes have morphed from menu links to a $5trillion payments rail and are on track to top $8trillion by 2029. Asia’s interoperable schemes – linking Singapore, Thailand, India and beyond – are expanding at roughly twice the volume pace of Western markets, reinforcing QR’s role as the lowest-cost bridge to financial inclusion. Finally, virtual cards are moving from niche to mainstream security layer: a 2025 study shows 42 per cent of US shoppers already used a virtual card at checkout, with two-thirds planning to adopt in the next year. Issued instantly, capped by spend rules and disposable on demand, they reduce fraud risk and reconcile effortlessly hence their rapid uptake in both consumer wallets and B2B payables. So, stop and think – if your payment stack can’t tokenise a card in seconds, offer to scan a QR or offer a convenient wallet, how long before your customers go elsewhere? WHO ARE THE CHALLENGERS App-based banks with no branch networks have rapidly gained market share by offering superior digital experiences and personalised services. In the UK, for example, digital-only providers expanded their reach from serving just 16 per cent of adults in
22
The Fintech Power 50 www.thepower50.com
Powered by FlippingBook