Navigating Digital Payments Brochure Web 2023

2nd Edition I 2023-2025
Navigating
Digital Payments.
Reuse.
How to reuse solutions in creative
new ways to reduce investment
and maximise returns.
Reinvent.
How to reinvent customer experience
at lower costs through Al, chatbots
and augmented reality.
Regrow.
How to reposition for
sustainable growth during times
of economic uncertainty.
SECTION I TITLE
Foreword by
Gilles Grapinet.
I almost find it hard to believe that As individuals and businesses started
it has been a mere two years since I to hold their money with banks,
wrote the foreword to the previous day-to-day payment instruments
edition of this report. So much has became more and more bank-led.
changed in that short period of Numerous innovations were created
time: massively in the world at large, by the banks, which for decades, if
both in the macro-economy and not centuries, became the central
geopolitical realities, and also a lot in driving force of the payment
our smaller world of payments. ecosystem. They regularly launched
new products and new solutions
Certainly, the rate of innovation and promoted more modern and
in payments is accelerating. convenient alternatives to cash for
This illustrates, once more, that the individuals and businesses: from
fundamental drivers for the evolution cheques, debit cards and credit
of the payment ecosystem entered transfers, through to direct debits
a new phase around 10-15 years and international credit cards.
ago, and we now see more and more
obviously the deep transformations As the world becomes more global
this has triggered. and digital, payments have been
entering a new phase, becoming
Indeed, for centuries, currency somehow more and more commerce-
and payments were the same and technology-led. The driving
unique reality. Through coins and force of change in payments has
bank-notes, national currencies become the new business needs of
were also the day-to-day payment merchants, as their own businesses
instruments: centrally regulated, must become omnichannel, data-rich
produced and distributed by states in and cross-border, while constantly
a government-led ecosystem. trying to improve the customer
experience thanks to the power of
Then, with the advent of commercial digital technologies. Correspondingly,
banks, commercial money was electronic payments have to follow,
born, and this has had a massive and even lead the way, to support
impact on the payment ecosystem. new use-cases and new challenges to
2 Navigating Digital Payments I 2nd Edition I 2023-2025

SECTION I TITLE
go beyond simply matching securely fundamental success-factors for any Secondly, even though our industry
a debit and a credit, to become payment solution have stayed the is growing, digital payments must
a growth enabler for 21st century same: extreme convenience, extreme find ways to make a strong positive
businesses. It is no wonder then affordability, extreme resilience, and contribution to fighting global
that the world of commerce is absolute trust. Yet even then, how warming by reducing massively CO2
now pushing hard on the payment these are achieved is transforming. emissions, particularly in comparison
ecosystem, becoming the driving to cash. Thirdly, digital payments,
force demanding more innovation in For example, trust in payments while becoming more and more
payments. Correspondingly, this has traditionally relied first on the trust sophisticated and diverse, must
forced our ecosystem to adapt its people had in the governments and, stay accessible and inclusive for as
strategy and its industrial structure later, in the banks providing the many different segments of society
over the last 10 years. Beyond payment services. Now, with a more as possible. No one should be left
banks (who are still an important diverse ecosystem of actors, how can behind as this becomes the new
stakeholder), many less traditional the needed trust be maintained? Or normal for our advanced societies.
players like Worldline have emerged, take resilience as another example,
precisely to bring global reach, with digital payments now a critical And this leads me on to my final
enhanced capabilities and increased piece of national infrastructure which point. As I’ve said already, our
technological fire-power to offer often has to manage high peaks industry is changing faster than
the next generation of answers and in demand, what new approaches ever. It is growing. It is critical for the
solutions in response to these new are needed to achieve the functioning of society. And it has to
needs of the merchant ecosystem. necessary hyper-resilience? work for everybody: whether rich
or poor, old or young, tech-savvy or
Indeed, in the section of this In the section of this report that technophobe. It is also decentralised:
report charting the “New World of describes the “Foundations of Trust” there will forevermore be no single
Payments”, you will see that every you will see that each topic covered controlling power, not even a small
trend is closely linked to the world of is showing how innovation can be number of institutions, that can
commerce, whether it is how people applied to achieve these enduring shape the future by themselves alone.
want to consume goods and services qualities that we all expect payments It is my belief that this context makes
or how they might interact through to offer. it essential to apply the best minds
virtual worlds and AI. within and outside of our industry to
Digital payment is still growing much understanding the big picture, sensing
Innovating at the speed of commerce faster than the general economy, the direction of travel, and navigating
is also leading to an ever wider a trend that will continue as more together the complex but fascinating
diversity of actors in the payment and more cash usage is displaced. and rewarding terrain ahead.
ecosystem, which is naturally leading This continued growth brings
to a payments world that is, and will with it important responsibilities I wish you a good read of the
become, even more decentralised for our industry. Firstly, despite 2023-2025 edition of Navigating
than today. the increasing complexity of our Digital Payments.
ecosystem, resilience, security
There is also a paradox at play. and safety will have to stay at Gilles Grapinet
Yes, almost everything is changing. the leading-edge as less and less Worldline CEO
But, at the same time, many of the disruption will be acceptable. Paris, France
Navigating Digital Payments I 2nd Edition I 2023-2025 3

SECTION I TITLE

Foreword by
David Restrepo Amariles.
In the fast-paced landscape of modern Despite these remarkable
finance, few sectors have experienced developments, there remains an
such transformative growth and imperative need to unite rigorous
innovation as the payments industry. research with pragmatic business
With the advent of digital technologies, practices. With the payments industry
the payments ecosystem has evolved set to outpace global economic growth
from the traditional exchange of by a factor of three in the coming years,
physical currency to a dynamic, its intricacies deserve the scrutiny and
digital realm where transactions occur insight of scholars, practitioners, and
seamlessly across many channels, policymakers alike.
platforms, and borders. Today, it is
not just a financial domain; the Key research areas encompass
payments ecosystem is an integral the engineering of digital payments
pillar of society, underpinning economic and currency, the exploration
activity, financial inclusion, and the very of payment data’s potential for
fabric of our interconnected world. enhancing consumer services while
addressing privacy concerns, and
Yet, as the payments industry continues the integration of payments into
its relentless evolution, there is a striking burgeoning business opportunities
disparity between its significance like the data economy and Web 3.0.
and the level of research attention it Consequently, HEC Paris has recently
receives. It is in this space that this inaugurated a research centre
thought leadership publication finds its dedicated to the future of money
raison d’être – to bridge the deep chasm and digital assets, accompanied by
between the industry’s profound impact a certificate program focused on money
and the marginal academic interest it and payments, demonstrating our
has garnered thus far. commitment to advancing the field.
The payments industry stands as a However, to foster closer integration

beacon of economic stability and growth, between the worlds of industry and
fostering innovation and connectivity in academia, collaborative efforts are
ways that were once unimaginable. It is required from both sides. This thought
an ecosystem that not only facilitates leadership publication serves as a
commerce but also empowers individuals tangible demonstration of how this
and businesses alike to transcend gap can be bridged, connecting
geographical boundaries. At the same these domains, and nurturing a
time, the field is experiencing increasing dialogue that amplifies the industry’s
complexity. A multitude of specialised profound impact on our society and
fintech companies are entering the economy. I invite you to delve into
business landscape to address evolving the insights provided in this edition of
customer behaviours and preferences. Worldline’s Navigating Digital Payments
With their adaptable technologies report and to actively participate
and agile organisational structures, in our mission to bridge the divide
these fintechs pose an inherent threat between research and innovation
to incumbent players. Consequently, within this remarkable industry.
regulators are also grappling to keep
pace and establish suitable regulations. David Restrepo Amariles
All of this is transpiring during an era Associate Professor, Worldline
marked by unparalleled economic and Chair on the Future of Money
political uncertainty. HEC Paris
Paris, France

SECTION I TITLE

SECTION I TITLE
A glimpse into the future.

The year is 2033.
“I’d like to book a holiday,” you say.
“Sure – where would you like to go?” The day of your holiday arrives.
replies Sam. Suddenly, you realise that you forgot
to buy any sun-cream. You pop out
“Somewhere warm in October, that’s good to a small local store to get some.
for families, within a €4,000 budget for You are glad that local stores have seen a
one week including travel, and minimising resurgence: not only are they convenient
the carbon impact,” you explain. for last-moment purchases like this,
but they also support the local economy
and offer a personal experience.
After a bit more discussion, your

assistant finds what seems to be
a great holiday package that is within One thing you do not need to pack for
your budget and has a certified carbon your holiday is cash. Several years ago,
footprint label. digital payments already achieved a
level of accessibility, inclusiveness and
“Would you like to tour the hotel before resilience that governments could scrap
deciding?” Sam asks. mandatory acceptance of cash, and
most central banks are phasing cash out
altogether, preferring instead to issue
Central Bank Digital Currencies (CBDCs).
And, with that, you put on your
augmented reality glasses so you can
view the rooms, the restaurant, the pool
and the views. You’d like to know what You also don’t need to pack any
your partner and children think, so you passports or other ID for you and your
ask them to join you. They love it! family. ID and payments have merged
and can be used in digital form. This is
“Let’s book it,” you say. not only useful for travelling abroad, but
And, with a simple authentication also makes many purchasing experiences
step, your holiday is arranged. easier. In fact, when you arrive at your
destination airport to rent a car, your
digital wallet is all you need to both pay
and provide your driving license.
Sam is, of course, an AI-bot, supporting
your decision-making process by finding
and summarising relevant information
based on your conversation. And The rise of CBDCs and strong digital
seamlessly moving between the physical identity has led to the ownership of
world, digital worlds and blended realities many assets, whether it is the deeds to
has become so intuitive that most people your house or the rights to content you
do it multiple times per day without even have created, being securely linked to
consciously thinking about it. your identity. This enables you to prove
your ownership without complex record-
keeping and intermediaries.
A few weeks later, you decide to visit

the shops, both to pick-up some
groceries and get some shirts for When you finally arrive at your hotel
your holiday. As is now very common, it’s exactly how you saw it all those
you pay for your shirts via subscription, months ago. You sit down with your
giving you more options to change family to enjoy a fine meal. The delicious
your wardrobe and reducing waste. smell, taste and texture of the food is
Owning goods outright seems both old- something that virtual reality cannot
fashioned and bad for the environment. recreate… yet.

Executive Summary.
The key trends highlighted in the 2021 edition But, in the last two years, the world has
of the Navigating Digital Payments report also changed massively. There is now:
continue to shape the payments industry:
• Heightened geo-political and economic uncertainty.
• The complexity of the payment landscape continues to • Increased inflation.
increase, with new regulations, new forms or currency,
• Generative AI reaching a tipping point.
and new ways to authorise transactions.
• Consumers and merchants still want the payment
experience to be more simple, frictionless, secure
and trusted.
• The urgency of the environmental emergency has
“We believe that
grown, with action needed by citizens, businesses
and governments.
businesses can reposition
• The Covid-19 pandemic has left its mark on society, themselves for continued
with the increase in contactless payments continuing,
alongside many other changes in people’s habits. growth in new ways.”
Reuse. Reinvent. Regrow.

Whether due to their personal Customer experience is being Times are now politically
commitment to living more redefined. No longer does it uncertain and economically
sustainability or because of economic always mean ultimate convenience tougher in a world where inflation
pressures, more and more consumers no matter the cost, whether and high interest rates could
want to find ways to reduce their economic or environmental. trigger an economic slow-down,
spending and supplement their Instead consumers will expect or even a recession. However,
income by, for example, buying or the right balance between by understanding how this
selling more second-hand or sharing convenience, price and sustainability. impactsthe needs of consumers,
access to products and services. And sellers must find ways of we believe that businesses can
Businesses too must find ways to providing great experiences at reposition themselves for growth
reuse existing solutions in innovative lower costs, for example through in new ways.
ways to reduce investment and AI chatbots or via augmented
maximise returns. reality shopping.
Trends requiring action today

In this report we address nine key questions. Four questions relate to the
foundations of trust that must underpin all payments. They cover financial
inclusion, resilience, digital identity and the digitisation of assets. Five questions
relate to the more directly visible changes we will see in the world of payments.
They cover alternative commerce models, the needs of small merchants, the
metaverse, generative AI and open payment ecosystems.
We have focussed on these trends because we believe they will be particularly

significant, especially in light of the current political and economic uncertainty.
They are also the trends that we believe you need to be aware of now, so that you
can assess their implications for your business, and plan the necessary actions to
take full advantage of the opportunities they offer.
8 Navigating Digital Payments

Payments,Iedition
2nd Edition
2 | 2023-2025
I 2023-2025
Contents.
Foreword by Gilles Grapinet................................................................................................................. 3
Foreword by David Restrepo Amariles............................................................................................... 5
A glimpse into the future...................................................................................................................... 7
Executive summary............................................................................................................................... 8
Introduction.......................................................................................................................................... 12
Foundations of trust............................................................................................................................ 17
In a cashless world, who gets left behind?.............................................................................. 18
Is it time for a new resilience paradigm in payments?.......................................................... 23
Can digital identification enable seamless, secure and
borderless digital services?....................................................................................................... 27
Could digital assets be the final puzzle piece
for a new digital world order?.................................................................................................... 31
New world of payments..................................................................................................................... 35
Will we see the end of buying and owning new products?.................................................. 36
What solutions can help the small merchant thrive?............................................................. 40
How will we pay in the Metaverse?.......................................................................................... 45
What are the major threats and opportunities
of generative AI in payments?................................................................................................... 51
Towards open payment ecosystems?..................................................................................... 55
Conclusion........................................................................................................................................... 60
Acknowledgements............................................................................................................................ 62
Never miss an important payment innovation!

Subscribe to our Navigating Digital Payments newsletter to get all the latest predictions,
trends and insights directly in your inbox every month.
Navigating this report.

To get the most out of reading this To help you with this, we have Retailers and Merchants
report, we recommend reading the identified the relevance of each
chapters “A Glimpse Into the Future” chapter to different sectors using the
and “Introduction”, which together icons shown on the right. Financial Institutions
provide an overview of the main
concepts in this report and how Of course, this is intended as a guide
they relate to each other. only. For example, if you work for a
Transport
financial institution you may still be
After this, you can read the whole interested in “Will we see the end of
report sequentially if you wish, buying and owning new products?”
but you may prefer to jump straight To further aid your navigation through Public Sector
to the chapters that you find the document, major links between
most interesting. chapters are also highlighted in the text.

Introduction.
In the two years since the previous edition of Navigating Digital
Payments, the world has once again changed massively. “Consumers are still looking
People’s hopes for a post-pandemic world of strong economic
growth and a long-awaited return to “normal life” were instead
for a payment experience
met with the harsh reality of war in Ukraine and its far-reaching
negative consequences.
that is more intuitive, simple,
Despite this, the key trends that we highlighted in 2021 still
frictionless, secure and
remain just as relevant today: trusted than ever.”
The complexity of the payments landscape will continue to
increase. New regulations such as the next revision to the
Payment Services Directive (PSD3), the Payment Services the UN Secretary-General Antonio Guterres to request all
Regulation (PSR) and Financial Data Access (FIDA). New countries to bring forward their net zero plans by a decade2.
payment schemes such as the European Payment Initiative Clearly, combined action is needed from governments,
(EPI) and SEPA Payment Account Access (SPAA). New ways businesses and citizens alike.
to pay such as the Digital Euro. And new ways to authorise
transactions, such as with behavioural biometrics. And, although the Covid-19 global pandemic may have passed,
it has forever impacted how we live our lives. In particular,
At the same time, consumers are still looking for a payment new digital habits formed during the pandemic have not been
experience that is more intuitive, simple, frictionless, secure instantly reset. The growth in contactless payments has
and trusted than ever1. continued3. Remote working, essential during strict lockdowns,
is now more prevalent than it was before4.
The environmental emergency is more and more critical,
with scientists warning that the goal of keeping global But, as shown in Figure 1, there are three new trends that have
warming below 1.5 degrees will likely be missed, leading become highly significant during 2022 and 2023:
Reuse Reinvent Regrow
Reuse to reduce Reinventing how Growing revenues

costs, p
rotect the people shop and and regenerating
environment and pay to provide our natural
avoid risks. engaging, environment.
personalised
experiences at a
low cost.
• Complexity • Geo-Political
• Customer experience Uncertainty
• Sustainability • High Inflation
• Covid-19 Impact • Generative Al
Existing trends t hat continue Newly significant

to impact payments trends
Figure 1: Trends shaping the payments world.
1 The ECN paper “Ensuring adoption of central bank digital currencies – An easy task or a Gordian knot?” concludes that transaction
speed, ease of use, privacy, security were some of the attributes influencing people’s choice of payment method.
2 https://www.bbc.co.uk/news/science-environment-65000182
3 https://open.spotify.com/episode/3qJgdepbfcppvAG5Jms4Fg?si=a8ec70b57c344e3d
4 https://www.forbes.com/sites/bryanrobinson/2022/02/01/remote-work-is-here-to-stay-and-will-increase-into-2023-experts-say/

Introduction
Geo-political uncertainty
Firstly, there is a new sense

of geo-political uncertainty.
The invasion by Russia of Ukraine on
24th February 2022, brought war to
Europe for the first time in decades.
Suddenly again, like during the
pandemic, dependencies between
countries were highlighted, and
questions around sovereignty were
asked: regarding food supplies,
defence, energy and, of course,
payment systems. Indeed, one
of the first, immediately-applied
sanctions against Russia was the
removal of access to SWIFT from
seven Russian banks5.
Less dramatically, but just as Generative AI Reinvent

importantly, questions are being
raised about the influence Thirdly, in terms of technology, whilst Even though consumers are becoming
and reach of states and large we may not have seen any major more cost-conscious, this does not
businesses. The US banning the new breakthroughs, some existing mean they will no longer appreciate
sale of some Chinese manufactured technologies reached new levels an engaging and frictionless shopping
communications equipment6 or the of maturity and adoption. Perhaps experience. However, the days of
EU seeking to control the dominance most notably, we saw ChatGPT bring ultimate convenience no matter
of big tech giants though regulations generative AI into the mainstream, the cost, whether economic or
like the Digital Markets Act7 are both showing how it can now produce human- environmental, are over. Paying a
indications of a new nervousness like textual output, with an important premium for 1-hour delivery may
about where technological power caveat that the content generated is no longer be an appealing luxury;
should be vested. only as accurate as the data used to having the right product at the right
train the model. This key technological time, sustainably sourced and at a
High inflation tipping point is creating many reasonable price is what more and more
opportunities but also raises challenges people will probably expect and need.
Secondly, global inflation increased in terms of ethics, trust, ecology and
to levels not seen since the 1980s8. how it will impact employment. This is why low-cost ways of
Triggered, to some extent, by the war providing immersive and personalised
and the associated increase in energy So what will these changes mean for experiences will become important.
prices, higher inflation is reducing consumers and businesses? Whether this is through conversational
the spending power of governments, commerce using AI chatbots,
businesses and individuals, whilst also Reuse or by augmented reality shopping,
increasing the cost of borrowing. how people buy their goods will
The new economic situation means that be reinvented.
people need to both spend less and
generate additional income. Reusing In parallel, payments are being
“Now is the time goods, either by buying second hand or
sharing access, helps people to meet
reinvented as well. We have seen
a huge rise in alternative payment
for businesses to this challenge. This can also benefit the
environment by reducing waste.
methods (APMs) – most notably in
India, where UPI accounted for 52%
carefully reuse Businesses have the same challenge,
of all digital transactions in 2022,
and in Brazil, where Pix is now used
and refine existing how to reduce their costs and increase
their revenues. One solution is for them
for more transactions than credit
and debit cards combined9. And
solutions in to serve these new consumer needs
for second-hand and sharing models.
Central Bank Digital Currencies are
reinventing the nature of money itself.
creative ways.” But now is also the time for businesses
to carefully reuse and refine existing
In particular, China launched its Digital
Yuan in January 2022, whilst the
solutions in creative ways, rather than European Commission published its
investing heavily in risky or speculative legislative proposals for a Digital Euro
new technologies. in June 202310.
5 https://www.reuters.com/business/finance/eu-excludes-seven-russian-banks-swift-official-journal-2022-03-02/
6 https://www.bbc.co.uk/news/world-us-canada-63764450
7 https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en
8 https://www.ons.gov.uk/economy/inflationandpriceindices/articles/globalinflation/1970to2022
9 https://www.finextra.com/newsarticle/42695/brazils-pix-used-for-more-transactions-that-credit-and-debit-cards-combined
10 https://finance.ec.europa.eu/publications/digital-euro-package_en

Introduction
Regrow
Times are now politically uncertain And these same adaptations that are will mean for our industry. In this
and economically tougher. However, needed for businesses and societies report, we address nine questions that
by understanding how this impacts to be economically successful, must we believe will be critical in the next
the needs of consumers, we believe also increase sustainability, or even five years (see Figure 2).
that businesses can reposition go beyond that towards regeneration:
themselves to achieve growth. helping to regrow our planet. Four questions relate to the foundations
But doing so requires a careful trade- of trust that are essential for digital
off between adapting how you serve Naturally, as a global leader in transactions; the other five questions
your customers whilst minimising risks payments, we look at how the world relate to a new world of payments that
and costs. is changing and anticipate what this is starting to emerge.
Metaverse
How will we pay in it?
Small Merchants Page 45 Generative AI

What are the major
What solutions can
threats and opportunities
help them thrive?
in payments?
Page 40
Page 51
Alt-Commerce Ecosystems
The end of buying and Towards open
owning new products? payment ecosystems?
Page 36 Page 55
New World
of Payments
Foundations
Finclusion of Trust Digital Assets
In a cashless world, Could they be the final
who gets left behind? puzzle piece for a new
digital world order?
Page 18
Page 31
Hyper-Resilience Digital Identity

Is it time for a new Can it enable seamless,
resilience paradigm secure and borderless
in payments? digital services?
Page 23 Page 27
Figure 2: Critical questions the payments industry must face.

Introduction
“They are
the trends
you need to
be aware of
now, so you
can take action
immediately
to take full
advantage of
the opportunities
they can offer.”
headset. Potentially this will be a new

channel for people to buy through, and
therefore it is right to consider how will
we pay in the metaverse? Another new
channel, driven by the rise in the use of
messaging platforms, is conversational
commerce. This will be taken to the
next level by generative AI which will
also impact payments in other ways,
raising the question of what major
threats and opportunities generative AI
creates in payments?
Foundations of trust New world of payments
With the rise of these trends, the
All payments are underpinned by These foundations of trust sit largely role of ecosystems will become even
trust. Given the decline of cash, digital below the surface. However there will more important. Creating a seamless
payments must achieve the level of also be changes that sit above the line, experience across multiple channels,
accessibility and resilience that physical visible and noticeable for merchants and connecting local businesses with
currency offers. We tackle these topics consumers. These relate to how people local customers and connecting
in two chapters. One examining the will shop, where they will shop and how buyers and sellers for second-hand,
question of in a cashless world, who they will access products and services. sharing and rental exchanges will
gets left behind? The other whether require connecting together multiple
it is time for a new resilience paradigm The rise of alternative commerce will technical platforms and business
in payments? lead to second-hand purchasing and processes (including payments) in a
rental models increasing in popularity way that still provides an intuitive and
Also essential for trust, is confidence and being applied to a wider range of seamless experience for the consumer.
in the identity of those involved goods, raising the question: will we Could this lead us towards open
in a transaction. We examine how see the end of buying and owning new payment ecosystems?
payments and identity are merging products? We believe that local shops
and how this can make payment and services will become more highly Trends that require action today
transactions more secure, raising the valued, as they can offer immediacy,
question of can digital identity enable proximity and a personal service, whilst As you will see in the rest of this report,
seamless, secure and borderless also lowering transportation costs we have not attempted to provide
digital services? and the associated environmental exhaustive coverage of every payment
impact. This raises the question technology and trend. Rather, we have
Digital currencies, and in particular of what solutions can help small focused on those that we believe
Central Bank Digital Currencies (CBDCs), merchants thrive? will be especially important, given
are showing how a traditionally physical the current political and economic
asset (i.e. cash) can be replicated In the past, the main channels have uncertainty. They are also the trends
digitally. The same approach could been in-store, online and mobile. This that we believe you need to be aware
be applied to other physical assets as list is expanding. Even though there is of now, so that you can assess what
well, which is why we have included a currently some disillusionment with the they will mean for your business, and
chapter exploring whether digital assets concept of the metaverse, there have plan the necessary actions you need to
could be the final puzzle piece for a also been advances, such as Apple’s take immediately to take full advantage
new digital world order? announcement of its Vision Pro AR of the opportunities they offer.

SECTION I TITLE

Foundations of Trust.
The role of digital payments in society is stronger than ever.
They have brought huge benefits. But their increasingly critical
nature to how society operates brings with it responsibility:
for accessibility, inclusion, resilience, trust and efficiency.
Metaverse
Page 45 Generative AI
Small Merchants
What are the major
What solutions can
help them thrive?
in payments?
Page 40
Page 51
Page 36 Page 55
New World
of Payments
Foundations
Page 18
Page 31

Page 23 Page 27

In a cashless world, who gets left behind?
Companies can How people There is a correlation

reuse the existing access cash will be between digital
payment ecosystem reinvented to reduce financial inclusion
and experience of costs, using new and a country’s
providing reliable models such as agent economic growth.
and scalable banking and CBDCs. Globally, growing the
digital payment Changing regulations, number of people
infrastructure that and innovative who are digitally
has been built up technologies, like included will pave
over 50 years, to AI and biometrics, the way for a society
create payment will enable digital with less cash
journeys that are payments to reduce and more efficient
more inclusive and financial exclusion. digital products and
accessible. services.
Many people are still left behind when it comes to financial inclusion
in digital payments. As cash usage declines, they may become
increasingly excluded.
Figure 3 shows this decline in cash clearly, both in emerging Not everyone has the same definition of cashless. Some see it
markets and developed economies, with some countries as simply meaning that you always have the option to make any
already becoming almost fully cashless (e.g. Netherlands payment digitally, and this may well become a reality in the near
and Sweden). future. Some see it as the full elimination of physical cash from
Emerging markets Advanced economies

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0
Mexico Indonesia Malaysia Argentina Brazil India Singapore Finland US UK Sweden Netherlands
Share of cash in total transactions by volume: 2020 2023
Source: GlobalData.
Figure 3: The decline of cash.

Foundations of Trust - In a cashless world, who gets left behind?
society – with no more hard currency being issued by central • The poverty premium: In the UK, “People without bank
banks and no possibility to pay non-digitally. This may seem accounts are deprived of discounted prices connected to
unlikely in the near future but, given the dramatic digitisation of direct debit payments.”13
payments over the last 40 years, it still seems possible that this
could occur in some countries in the next 10-20 years. • Reduced convenience: Extra time is needed to obtain
or deposit cash because there can be a lack of ATMs/
The downsides and costs of cash (which we cover in more bank branches, while some retailers no longer accept
detail later), have led to major government-led Alternative cash at all.
Payment Methods (APMs) in an effort to reduce cash usage.
In India for instance, UPI (Unified Payments Interface), since • Security risks: The risk of cash being stolen or
its launch in 2016, has grown to process over 7.82 billion counterfeiting (US retail businesses lost about $40 billion
transactions in Dec 202211. Whilst in Brazil, Pix has taken in 2014 because of the theft of cash alone14 and, in
just two years to become the payment means most used by Germany, thieves are now “blowing ATMs up at a rate of
Brazilians12. These APMs are not only used by people buying more than one a day”15).
from merchants, but also to pay each other in person-to-
person (P2P) payments, further eroding the use of cash. • Social divide: A reduced ability to access and pay for
digital-only services may deepen inequality, as explained
How digital financial exclusion impacts citizens in the OECD report Advancing the Digital Financial
Inclusion of Youth16.
As illustrated in Figure 4, social segments which are
more prone to financial exclusion are people who are • Depreciation: Savings held as cash do not earn
unbanked, elderly, digitally unskilled, living in remote interest and therefore will not resist devaluation
locations, vulnerable, disabled, refugees and immigrants, over time.
and digital laggards (those who are able to access and use
digital solutions, but choose not to). • Affordable borrowing: Lending from the unstructured
sector (often called “fringe banks”) tends to come
Through their dependence on cash, they can face with significantly higher interest rates than from the
various difficulties: structured sector.
Digitally
Unbanked Elderly Remote
unskilled
As of 2021, 76% of The total number
In 2019, 28%
adults globally now of ATMs (automated
of European
have an account teller machines)
people have
at a bank, other in the euro area
difficulties with
financial institution decreased by 4.2%
digital technologies.
or with a mobile to 0.28 million
money provider. in 2021.
Source: Worldbank, 2022 Source: Worldline Discovery Hub, Source: European Datalab, 2020 Source: ECB, 2022
2022
Digital Refugees
Vulnerable Disabled
laggards & immigrants
In European Union, An estimated
It is estimated
precarious situations 1.3 billion people
that global forced
concern 16.8% — about 16% of the
displacement has
of citizens global population —
reached 103 million
i.e. 86 millions currently experience
at mid-2022.
of people. significant disability.
Source: INSEE, 2021 Source: World Health Organization Source: Everett Rogers Source: UNHCR, 2022
Figure 4: Social segments which are more prone to financial exclusion.
11 https://www.business-standard.com/article/finance/upi-processes-record-7-82-bn-transactions-in-december-ends-2022-on-a-high-123010100141_1.html
12 https://www.bloomberglinea.com/english/two-years-since-launching-pix-is-the-most-used-payment-method-in-brazil/
13 https://thepaypers.com/voice-of-the-industry/the-many-faces-of-financial-exclusion-in-the-developed-markets-and-who-is-at-risk--1257545
14 https://hbr.org/2014/06/the-hidden-costs-of-cash
15 https://www.reuters.com/world/europe/cash-loving-germans-fret-over-exploding-atms-cross-border-crime-wave-hits-2023-04-14/
16 https://www.oecd.org/finance/advancing-the-digital-financial-inclusion-of-youth.htm

Digital financial inclusion in

advanced economies Social cost of cash.
Some perceive that financial inclusion is
only an issue for emerging economies.
But, as we have seen already, there x-axis: payments per capita
are many different groups in developed
economies who can be excluded 0.9
from innovations in financial services. 0.8
The issue is then primary about fairness
in society. In countries where the vast 0.7
majority have good access to digital 0.6
financial services, those who do not 0.5
will be highly marginalised. Also, as
cash is used less, the per-transaction 0.4
social cost17 of using cash goes up, 0.3
rising above that of digital payments18 0.2
(see Figure 5).
0.1
Digital financial inclusion in 0.0
emerging markets 0 50 100 150 200 250 300 350 400 450
In many emerging markets, substantial y-axis: unit costs (euro)
parts of the population do not have
good access to financial services. Source: European Central Bank report on the social and private costs of retail payment instruments.
They are, by definition, less
marginalised than they would be in
developed countries. However, in its
working paper “Is Digital Financial
Figure 5: The per-transaction social cost of cash increases as transaction volumes reduce.
Inclusion Unlocking Growth?” the IMF
found that there is a “large, positive link
between digital financial inclusion and
economic growth”19. This is illustrated
in Figure 6, where it is clear that 95% Confidence interval
countries with higher levels of digital
financial inclusion are also seeing
higher annual GDP growth. This could 5.00
be explained by the fact that heavily 4.50
cash-based economies have less
4.00
efficient payments, borrowing and
lending. Furthermore, tax evasion leads 3.50
to significant impacts on government 3.00
revenues (e.g. an estimated 3%
2.50
lost in the US in 2014, when a third
of transactions were conducted 2.00
using cash20). 1.50
1.00
0.50
“It is clear that 0.00
countries with Low digital

financial inclusion
Median digital
financial inclusion
High digital
financial inclusion
higher levels of
digital financial
Note: Low, median and high refers to the average level of fintech-driven financial inclusion at 25th,
50th, and 75th percentile of the sampled countries respectively. The real GDP growth rate is obtained
from regression results and it assumed other characteristics of the country at the median level.
inclusion are Source: IMF working paper “Is Digital Financial Inclusion Unlocking Growth?”
also seeing
higher annual Figure 6: Link between digital financial inclusion and economic growth.
GDP growth.”
17 Social cost means the total burden on the economy and, in this context, means the total cost of providing payment infrastructure, excluding costs (fees, tariffs, etc.)
that are paid to other participants in the payment chain.
18 https://www.ecb.europa.eu/pub/pdf/scpops/ecbocp137.pdf
19 https://www.imf.org/en/Publications/WP/Issues/2021/06/11/Is-Digital-Financial-Inclusion-Unlocking-Growth-460738
20 https://hbr.org/2014/06/the-hidden-costs-of-cash

The unbanked challenge
Figure 7 illustrates that financial services are typically easier

to access and/or provide greater benefits if you have a bank Financial
account. For example, it is possible to get a short-term inclusion
cash loan from a pay-day loan shop, but you will likely pay
much higher interest rates than if you had access to a bank
overdraft. It is also worth noting that, even if a bank account
is not needed, this does not automatically make a service Payments Insurance
inclusive. For example, “one-third of mobile money account
holders in Sub-Saharan Africa cannot use their account
without help from a family member or an agent.”21 Bank
account
Maintaining access to cash
In the short term, maintaining access to cash will be

important to avoid increased financial exclusion. This is Savings &
Borrowings
recognised by governments. For example, in Spain, a petition investments
with over 300,000 signatures was presented to parliament to
highlight the disappearance of physical bank branch services
for cash withdrawals or bill payments. This led to the Spanish
Economy Minister meeting urgently with the Bank of Spain
and three banking associations and asking them to present
new measures to address this issue22.
However, the cost of providing this access to cash needs

to be reduced. One study found that, in the Netherlands,
banks make an estimated loss of €1.95 per cash withdrawal Figure 7: Bank accounts ease access to financial services.
or deposit23.
It is likely that this combined need to maintain access

to cash whilst reducing its costs, will lead to more agent
banking. Initially used in emerging markets to enable access
“Technologies such as
to banking services in remote areas, it will be applied more
widely to provide access to cash at a reduced cost. One
biometric payments have
example of this shift is Sonect24. They provide a click-and-
collect cash service via retailers and, by doing so, in 2019,
the potential to provide
became Switzerland’s largest cash distribution network.
It may be expected that “high branch” networks such as
much of the convenience
post offices, gas stations or corner-shops could support
such a model.
and simplicity of cash.”
Accessible and inclusive digital payments
Worldline Foundation which will support environmental and
The trend away from cash will continue because, as education projects, particularly those aimed at increasing
explained earlier, it offers clear benefits for individuals digital literacy and financial inclusion.
and economies alike. However, longer term, if societies
are to become cashless, digital payments must be made We also believe that technologies such as biometric payments
accessible, inclusive and hyper-resilient (as discussed further have the potential to provide much of the convenience
in the next chapter “Is it time for a new resilience paradigm and simplicity of cash coupled with the benefits of digital
in payments?”). There are already good examples of progress payments. At Worldline we have researched and experimented
in this area. For example, the Unified Payments Interface with solutions for pay-by-palm, pay-by-face and pay-by-voice.
(UPI), enables users to make a payment even without owning
a smartphone25, and the Digital Euro has financial inclusion Furthermore, the maturation of language-based AI
as a core design principle. technologies presents new opportunities for accessibility
and inclusion in financial services.
We believe that governments and regulations will have a
key role to play in fostering accessible and inclusive digital Generative AI (which we discuss further in the chapter
payments. In July 2022, it became mandatory in Belgium for “What are the major threats and opportunities of generative
all physical stores to accept some form of digital payment. AI in payments?”) has the potential to break down
This stands in contrast to other countries, where cash barriers faced by excluded populations in their daily lives.
acceptance remains mandatory. However, we can imagine For instance, these technologies could empower individuals
that this rule might be relaxed, if digital payment acceptance to understand financial products and services by providing
is shown to be sufficiently accessible and inclusive for all summaries and explanations in a conversational manner.
segments of society. And voice interactions could directly support certain groups
(e.g. visually impaired people could use a combination of
Of course, education also has an important role to play automatically generated descriptions and text-to-speech, or
and initiatives from the payments industry can help here hearing impaired people could be guided by speech-to-text
too. An example of such an initiative is the upcoming and generative chatbots).
21 https://www.worldbank.org/en/publication/globalfindex/brief/the-global-findex-database-2021-chapter-3-financial-resilience
22 https://www.elconfidencial.com/empresas/2022-01-20/calvino-insta-a-la-banca-medidas-personas-mayores
23 Study into the costs and revenues of payment services for financial institutions 2021, McKinsey & Company
24 https://sonect.net/
25 https://tech.hindustantimes.com/how-to/make-upi-payments-without-smartphone-internet-here-s-how-71654409676100.html

In product development, AI-powered software development However, care must be taken to understand the current limits
tools could identify accessibility issues in an application or of these technologies regarding data privacy, ethics and trust
service, and propose creative ways to fix them and improve issues. This is a fast evolving trend, and should open up new
overall usability. horizons in the coming years.
In a cashless world, who gets left behind?
Changes Challenges Choices
The world will continue to trend During the transition away from In the medium-term, governments
towards becoming cashless. cash, the per-transaction societal and financial institutions will have
This was accelerated by the cost of cash will increase. As to ensure financial inclusion in
Covid-19 pandemic, and is now societies become more cashless, payments by maintaining access
being driven further by the rise of some people in society will become to cash whilst minimising the
alternative payment means. very financially excluded, such as costs of doing so. In the longer
people who are unbanked, elderly, term they will need to ensure
digitally unskilled, living in remote that digital payments are fully
locations, vulnerable, disabled, accessible, affordable and
refugees and immigrants, and inclusive. Biometrics and artificial
digital laggards. intelligence will have a key role to
play in achieving this.

Is it time for a new resilience paradigm
in payments?
As an industry The accelerated A new resilience

that is systemic pace of payment paradigm will
to the economy, innovation requires be foundational
payments must creative thinking for secure and
continuously increase about traditional sustained growth
resilience, relying concepts of of the payments
on established resilience, often industry, facilitating
foundations and reinventing where uninterrupted trade,
reusing well trusted traditional resources and ultimately
technologies are scarce and contributing to a
and regulations past practices have more resilient society.
to achieve ever become obsolete.
more demanding
resilience needs.
The payments industry must be prepared to adapt to new and

unpredictable disruptions.
The ubiquity and interconnectedness of

digital payments enable large efficiency
financial institutions, fintechs
and payment service providers –
“Stakeholders
gains in commerce, supply-chain and
distribution, banking, and government
must embrace a new paradigm of
resilience, with careful strategic
in the payments
activities26,27. However, it also presents
a systemic economic risk to societies.
planning required to prepare for
and even thrive in a future of
industry must
Digital payments rely on complex and
interdependent infrastructures with
increased uncertainty. embrace a
billions of transactions processed
daily, increasingly in real-time. Built
A mission-critical resilient industry new paradigm
over many decades, this infrastructure
is often facing obsolescence, which
The payments industry has proven
over many years to have high levels
in resilience.”
causes difficulties in finding or of resilience, security and availability.
retaining skilled resources due to By operating mission-critical systems
legacy technologies. and being highly adaptable to change, geo-political factors, difficulties in
the industry has supported the global upgrading legacy IT infrastructure,
Following the financial crisis in 2008, economy in a trusted and reliable way. and shortages of skilled resources.
governments and regulators have Recently, there have been several We anticipate a growing number of
focused primarily on the resilience events that triggered a fast response disruptions from various sources with
of the financial markets. Since then, from the payments industry in the face increased severity which will demand
there has been a global pandemic, of sudden disruptions. The Covid-19 innovative responses.
followed by extreme weather events, pandemic produced examples of this,
and a war in Europe with severe geo- as illustrated in Figure 8 (overleaf). The digital payment industry has
political and economic repercussions. systemic economic importance,
These events have put a spotlight Accelerated change and disruption which will only increase as cash
onto other resilience factors, from usage declines (as discussed in the
operational IT resilience, supply-chain There is an increasing realisation that previous chapter “In a cashless world,
dependencies, interdependencies on a growing number of risks threaten who gets left behind?”). Given this,
third-party providers and partners, the stability of the payments industry, a new resilience paradigm must
among many others. leading to severe business and be considered and is top of mind
operational disruptions. These include for key stakeholders such as the
The key enablers and stakeholders in energy supply, communications, IMF28, the World Bank29, and the
the payments industry – merchants, business constraints due to sanctions, European Commission30.
26 https://www.weforum.org/agenda/2020/01/3-ways-digitalizing-payments-can-support-sustainable-economic-growth/
27 https://usa.visa.com/content/dam/VCOM/download/visa-everywhere/global-impact/impact-of-electronic-payments-on-economic-growth.pdf
28 “Operational Resilience in Digital Payments”, International Monetary Fund, December, 2021
29 “The Global COVID-19 Fintech Market Impact and Industry Resilience Study”, 2022, World Bank, World Economic Forum, Cambridge University
30 The EC recently published the «Digital Operational Resilience for the financial sector» Act (DORA, 2020)

Foundations of Trust - Is it time for a new resilience paradigm in payments?
� Speeding up
adoption of
Deployment Regulators micro-payments
Avoidance Demand for
of contactless changed risk
Pandemic of physical contactless
terminals parameters � Future benefits
contact payments
ramped up industry-wide of increased
contactless
adoption
� Health safety
Payment industry � Facilitate home

Demand for deliveries
Pandemic support with terminals
home deliveries
and new payment methods � Future benefits
of new payment
options
Figure 8: Examples of rapid reaction of the payment industry during the Covid-19 pandemic.
All stakeholders must evaluate These new strategies must be Three horizons of
and quantify the risks and their designed with clear benefits for resilience readiness
consequences, building scenarios business-as-usual operations (not
in anticipation of major disruption. only when disaster strikes). Therefore, In this context of uncertainty and rapid
For that, it is imperative to define a resilience must be built from the ground change, all payment stakeholders
common language and terminology up, incorporating new features into must consider different strategies
as well as new methodologies and all products and services in a cost- to safeguard their businesses. One
frameworks to identify risks and effective way for both the payments temptation, especially for dominant
evaluate their potential impacts. industry and consumers. players, can be to ring-fence the
business, building a protective
fortress against all risks in order to
be in apparent control. This approach
comes with significant investment
requirements and the risk of isolation in
an increasingly interconnected world.
� Availability & redundancy
Such isolation means missing out on
� Cloud infrastructure design � Alternative rails innovation from external parties, and
� Disaster planning � Sourcing strategy the capability to share investments
� Tech innovation � Business innovation for a common good. We believe a
better option is cooperation to create a
Payment
processors
resilience virtuous circle, as illustrated
in Figure 9.
Technology Financial � Cooperate As depicted in Figure 10, we suggest

providers institutions � Establish an approach based on three horizons
� Payment security standards of resilience, each with its own set of
awareness � Impose analysis criteria and specific measures
Payments
� Cyber-crime minimums which, when combined, can achieve
awareness
resilience Multi-region
hyper-resilience.
� Tech savviness options
� Geo-political
Consumers Regulators Horizon 1 - Internal foundations
safeguards
Here we include redundant backup

Merchants systems, recovery plans, advanced
security measures, and real-time
monitoring capabilities, aiming to
� Data security � Promote competition
guarantee high standards of resilience.
� Promote strong � Foster diversity
authentication � Innovation level
playing field
Figure 9: The resilience virtuous circle of payment stakeholders.

Industry-systemic
innovation for
hyper-resilience
• Engage with government

and regulators to create an
Business innovating
upgraded set of best pratices
for resilience
- consider downgraded
processing (at an acceptable
• Introducing disruptive
risk) in disaster
Internal payment instruments based
foundations on digital wallets and DLT • Work with card schemes, to
implement tandem processing
• Explore alternative fallback
• Operational IT resilience strategies enhancing
mechanisms (using a mix of
the overall resilience of
• Staff re-training technologies, old and new)
the industry
and re-platflorming
• Implement alternative supply
• Collaborating with NGOs to
• Business continuity options to communications,
create safety nets for local
energy and transportation
• DRC communicaties and securing
• Consider escrow-production financial inclusion in times
• Cyber security and
deployments using mirrored of crisis
fraud prevention
production deployments kept
• Bring these hyper-resilince
at 3rd parties ready to be
concepts back into the
deployed in case of a cut-off
mainstream to improve
with the supplier
the business-as-ususal
offerings (e.g. offline use-
cases with subsequent
sync e.g. ecommerce
delayed payments)
Figure 10: The 3 horizons of resilience.
Compliance with industry best with a strong focus on resilience, Sourcing strategies must be
practices for robustness and risk bringing value not only during considered, including the geographic
mitigation involves taking actions emergencies, but also in day-to-day location of providers and their
that mostly depend on one’s own business operations. ability to adapt and offer alternative
capabilities: improving operational technologies. For example, using
resilience, training staff, diversifying Examples include the use of alternative communications via satellite
procurement strategies and fighting decentralised approaches such as networks33 can complement traditional
cyber-crime (including preparing for Distributed Ledger Technology (DLT) telecommunication, extending coverage
quantum-safe cryptography). or offline mobile payments, such as to new locations, while also providing a
the proof-of-concept developed by fallback safety net.
Internal foundations also include Worldline as part of the ECB’s Digital
required technology modernisation Euro project31. Such methods can create
initiatives, such as moving to cloud-
based architectures, new product
more robust payment schemes, able to
work as an offline closed loop for some “Such approaches
development and operational
methodologies, many of which include
periods. This would safeguard payments
infrastructures under distress, economic can create more
a goal of increasing resilience. sanctions or isolation.
robust payment
Horizon 2 – Business innovation
for resilience
Other options include highly
interconnected payment hubs such schemes, able to
The payment industry must improve
as Worldline Payment Orchestration32,
which provide efficiency benefits
work as an offline
resilience through innovative solutions
beyond the existing standards of today,
to merchants, while also directly
contributing to a more resilient payment
closed loop for
involving all stakeholders. Innovation
should drive the implementation
ecosystem by allowing merchants
to seamlessly switch between
some periods.”
of new products and services built different acquirers.
31 https://worldline.com/en/home/top-navigation/media-relations/press-release/worldline-helps-the-ecb-to-shape-future-digital-euro-by-successfully-delivering-a-front-end-prototype.html
32 https://worldline.com/en/home/main-navigation/solutions/merchants/payment-orchestration.html
33 E.g. Starlink, OneWeb

Other options involve looking the space programme34, “dissimilar This approach could be implemented
at alternative, easily accessible redundancy” identifies the need at a country level, providing the
technologies, that may be sufficient to implement totally independent benefit of independent fall-back
to maintain a reasonable level of solutions as fallbacks. For example, options in the event of a serious
service during a disaster, whilst also if a water pump keeps overloading, incident, thus ensuring continued
having a cost commensurate with the it cannot be replaced by another access to payment services.
likelihood of such events. For example, pump with similar characteristics This would require cooperation
using radio for communications, and the same fault (e.g. overload under regulation, with industry
peer-to-peer mobile communications, from the supplied electrical voltage). players working together to benefit
or alternative data transfer Similarly, if a business has all terminals the whole industry and society at
mechanisms such as USB drives connected via a single telecoms large. Sharing ideas, technology
during emergencies. provider, then the back-up system and, crucially, investments would
must operate on alternative suppliers be essential, necessitating a
Horizon 3 - Industry-systemic for operational resilience to be level of openness even amongst
innovation for hyper-resilience maintained. The creation of totally competitors, under the supervision of
independent tandem processing government and financial institutions
This third horizon consists of a broader options, using multiple suppliers and to ensure that fair competition
scope of collaboration to bring about payment processors, can significantly is maintained.
industry-wide changes to improve improve the resilience of the overall
overall resilience. This represents a industry, with costs shared between Towards hyper-resilience
new dimension of analysis aimed at all stakeholders.
achieving hyper-resilience, through In the face of increasing disruption,
extensive collaboration, including the payments industry must
between competitors. “Solutions take action across multiple
dimensions to continue delivering
Current regulations are inadequate
for handling many disaster scenarios.
developed the highest possible levels of
resilience. Achieving hyper-
Specific measures are required to
facilitate transactions in sub-optimal
to meet this resilience is only possible through
a multi-dimensional approach, with
environments, such as offline,
where a slightly higher risk level
challenge, must continuous iteration and improvements
as conditions evolve.
may be accepted in exchange for
maintaining availability.
also positively Crucially, the solutions developed
impact everyday to meet this challenge, must also
payment products
Drawing inspiration from other positively impact everyday payment
mission critical industries, such products and services, as well as
and services.”
as space exploration, can offer allowing more robust responses in
additional benefits. Stemming from disaster scenarios.
Is it time for a new resilience paradigm in payments?
Recent events, such as the Disruptive events can affect The payment industry must
Covid-19 pandemic, severe the underlying infrastructure of devise strategies for how to
weather disasters and conflicts payments – including energy supply use resilience as a long-term
between nations, have had a and cost, telecommunications and enabler for competitive advantage
severe impact on the global scarcity of hardware components, and sustainability.
economy, and on the payments to name just a few. The payments
industry that sustains and industry must strengthen its Industry players must decide
powers it. operations to be able to absorb how and when to cooperate, and
this increasing number of when to seek unique innovative
There is also a continued unpredictable events. solutions on their own. Regulators
increase in the level of complexity will need to promote a common
and interdependencies in the This resilience requires a approach to increasing resilience.
payment industry, which creates combination of technical,
additional risks. operational, and strategic Ultimately, the ability to embed
capabilities to withstand and resilience within products and
thrive in the face of adversity services will be key to succeeding
and uncertainty. amidst an uncertain and fast-
changing economy.
34 Human Spaceflight Operations (AIAA) Chamitoff

Can digital identification enable seamless,
secure and borderless digital services?
The existing concept Regulatory Digital identity

of digital wallets changes will enable will become the
will be reused businesses to cornerstone of
to incorporate reinvent customer a more digitised
digital identity, and experiences to be society. Many
businesses, such as more seamless by businesses will
banks, will reuse the integrating digital generate totally
existing information identity and payment new revenue streams
they hold about inside a single digital from the digital
consumers to provide wallet. Going further, identity ecosystem.
verified information this will open-up new Others will be able to
about people. business models for use digital identity to
actors in the digital boost conversions to
identity ecosystem. grow their revenues
and to reduce costs.
The rapid evolution of global digital society is unstoppable, putting

tremendous pressure on the demand for secure digital identification.
This demand covers every market sector, making it crucial puzzle piece for a new digital world order?” we explore how
to strike the right balance between providing a great user widespread, interoperable digital identity could pave the way
experience (to increase conversion rates) and ensuring for fully digitised asset transfer. But in this chapter we will
robust security (to prevent fraud). focus on how digital identity will evolve and what other use-
cases it will open up.
Today, identification exists in various forms, whether it is
paper, plastic cards, barcodes, QR codes or, more recently,
the use of biometric methods. So what will come next?
What key role will digital identification play in a digitised
society? Will standardisation, cross-border acceptance and
adoption of digital identification be possible? And are you What is Digital Identity?
ready for digital identification, either as a consumer or as
an organisation? Today, many terms are used somewhat interchangeably
and without commonly agreed definitions.
Standardisation of identity
You might see digital identity used to describe:
There have been many digital identity pilots and solutions
• The body of digital information that exists about an
deployed at national scale. Now, the European Union (EU)
individual or organisation.
is paving the way for a European Digital Single Market by
introducing regulations for eIDAS which will provide EU • A digital version of a physical identification
citizens with a digital identity that can be used in every EU document (such as a passport or driving licence)
Member State. This regulation will harmonise the rules for
• A means for people to prove digitally,
identity verification and authentication. In the future each
unambiguously, who they are and their profile
citizen will be able to have a digital identity wallet, under their
characteristics for unlocking access to banking,
sole control, to authenticate for public and private services
government benefits, education, and many other
and to communicate trusted attributes like their driver’s
products and services
licence, diploma, age or delivery address. Services based
on strong authentication will be obligated to accept it. Other
For the sake of clarity, this last definition of digital
large countries, such as the USA, India and Brazil, are also
identity is what we are referring to in this chapter.
moving forwards with their own plans for digital identity.
Later, in the next chapter “Could digital assets be the final

Foundations of Trust - Can digital identification enable seamless, secure and borderless digital services?
Future development of Since privacy concerns are inherent in be established which includes many
digital identity society, we predict that some people stakeholders. Wallet issuers provide
will be reluctant to use digital identity users with the ability to store and
From a technology point of view, because of the fear of data cloning and maintain their digital identity. Attribute
biometrics and wearables will make false identification leading to fraud. issuers provide validated attributes
digital identity both more convenient about someone’s identity, for example
and more widely available. Digital identity is going to become a their driving licence or age. Acceptors
key tool for exploring different virtual enable people to prove something
From a regulatory viewpoint, new worlds with features such as a single about themselves (e.g. that they are
legislation regarding digital identity35 user being able to have different over 18) by using their digital identity.
will impact large geographies (at the avatars. We also predict that Web3
continental scale) and will massively and self-sovereign identity will help Are you ready for digital identity?
grow the number of people using it. This individuals get back control of their
will facilitate a greater diversity of use identity credentials, without depending In the future everyone will have access
cases in the public sector, for banks, for on a third-party provider. to a secure digital identity. This can
insurance companies, and for merchants, both reduce costs for merchants
including in cross-border scenarios. Furthermore, we think that digital and improve the experience for
identity will not only be used for people, their consumers.
but also for objects and companies so
that they can access digital services One use case that will really benefit
“Biometrics and by themselves. We originally identified
this important trend in the first edition
from digital identity is age restricted
purchases (as illustrated in Figure 12).
wearables will of Navigating Digital Payments in the
chapter about autonomous payments.
Today, retailers are losing money as a
cumbersome age verification process
make digital Since then, at Worldline, we have
developed a proof-of-concept showing
can result in confusing and long winded
checkouts and an uncomfortable
identity both how specific aspects of your digital
identity could be shared with your car
customer experience. One study has
estimated that the total cost to retailers
more convenient to enable certain autonomous payment
use cases.
of checking ages in the UK alone is
£4 billion36. A large part of the cost is
and more As illustrated in Figure 11, digital identity
from customer service intervention
(around 60% of all customer service
widely available.” requires a successful ecosystem to interventions at self-checkouts are
Wallet issuer
Provides
wallet
Wallet provider
Attributes issuer User Provides Acceptor

attestation (relying party)
Provides attestation
Relying party
Attribute provider
Validity
Registers info information Checks validity
Figure 11: The digital identity ecosystem.
35 eIDAS in Europe, The United Nations (UN) and World Bank ID4D, “UK digital identity and attributes trust framework” in UK, Aadhaar in India
36 https://blog.hidglobal.com/2021/07/compliance-and-customer-experience-age-verification

#1 #2 #3 #4
Figure 12: Age verification use-case.
due to age related checks). And when

in-store staff focus on dealing with
payment means to offer a seamless
end-to-end experience in a purchase
“The total cost
age-checking, they may miss the
opportunity to prevent theft or to
customer journey, as shown in Figure 13
(overleaf). Solutions such as Worldline’s
to retailers of
capitalise on upselling opportunities. Digital Identity Hub37, will help to simplify
the implementation of such use cases.
checking ages
This is just one example of how
digital identity can reduce friction for Not only will digital identity become
in the UK alone
consumers whilst also reducing costs
for merchants. But there are many other
widespread, but it could even be that,
in the future, payment and identity will
is £4 billion.”
use-cases where users have to share merge, with the idea of payment means
personal information that will benefit being separate from identity being
from identification being interlinked with a thing of the past.
37 https://worldline.com/en/home/main-navigation/resources/resources-hub/publications/digital-identity-hub-simplify-digital-identity-adoption.html

Travel & Online & In-Store

Hospitality Commerce
• To make • Improve CX
reservation during shopping
and check-in with seamless
• Share driving Digital Identity & Payment Identification, IBAN
license, insurance sharing for account-
to rent a car to-account payment,
• Loyalty program shipping preferences
• Cross border • Increase customer
knowledge with fast
enrollment and KYC
Financial Services
Mobility, People • For banks and
Telco, Energy Entities insurance, at
& Utilities Things enrollment, for
• Authentication digital signature,
and credentials Strong customer
verification Authentication
• Signature of • Attribute issuing
contracts ID card Payment card (IBAN, age, user
• Loyalty, call postal address)
center support • Wallet issuing
Mobility card Account info
& payment
• Credit loan
Driving licence card Credit score and scoring
Health card Crypto wallet

Healthcare
• Fraud or misusage
management
• Access sensitive health data E-Government
or treatments • For citizens to access digital
• Traceability of treatments online services
(vaccination record) • Use attributes issued by
• Care providers authentication government to vote or travel,
pay taxes
• Keep track of diplomas
Figure 13: Use cases combining digital identity and digital payments.
Can digital identification enable seamless, secure and borderless

digital services?
The implementation of digital The rollout of digital identity In Europe, all the companies
identity infrastructure in many services still faces many challenges that already implement strong
countries worldwide has gained for banks, merchants and end- authentication (including banks
momentum, for example with the users. Pain points need to be and other financial institutions) will
introduction of services such as solved, including identity theft, have to accept eIDAS compliant
eIDAS (electronic IDentification regulation, fears over excessive digital wallet identification, whilst
and Authentication Services) state control, validation of data, also considering their role in
for all citizens of EU Member interoperability and accessibility. the digital identity ecosystem.
States. The growth of trusted Retailers and other merchants will
digital identity will have a major need to assess how widespread
impact on the payment and digital identity can enable them
financial industry due to the to provide more simple and
connection between identity and convenient services to consumers.
transaction validation.

Could digital assets be the final puzzle
piece for a new digital world order?
Using digital assets, Companies can Fast and efficient

all products and reinvent their transfer of assets
services could be business model by in a fully digital way
traced in real-time to creating innovative will directly reduce
increase their usage ways for customers costs in certain
and ease of access. to acquire and use industries, making
Reuse functionality digital assets. For business cases
is introduced to example, introducing more attractive.
all these assets, subscription-based
unlocking new access to digital
value for customers assets, allowing
and promoting customers to pay
a sustainable a recurring fee for
digital economy. access to a wide
range of reusable
resources that align
with their needs.
It could be possible to remove all paper representation of our

assets with the help of digital identity, government trust, and
new technologies.
Over the last 30 years, people have become good at and comes with a distinct usage right) have flourished,
leveraging the internet to increase their own productivity. from digital products through to identity and payments.
However, the internet has remained essentially a Figure 14 shows some common cases of digital assets.
“trustless” environment. Digital assets (i.e. anything But, without trust, a true form of digital assets cannot exist.
that exists in digital form, either natively or digitised, Let us explain why.
Digital assets
News & social media content Properties

Blogposts, news, tweets. Domain, websites, Membership, tickets,
vouchers, NFTs, Legal certificates.
Monetizable Multimedia Content

Music, Pictures, Digital arts Unique content Proof of identity
(e.g. 1st SMS). Personal identity, driving license,
medical card.
Personal records
Financial records, health records, Digital currencies
purchase records. Bitcoins, Stablecoins.
Figure 14: Common examples of digital assets.

Foundations of Trust - Could digital assets be the final puzzle piece for a new digital world order?
Today, in payments, multi-factor and could be made interoperable with Identity is the stepping stone
authentication is used and every third parties much more efficiently. towards digital assets
transaction is encrypted. This is good
enough for accessing your bank The identity challenge In an ideal world, identity and permitted
account, creating a payment instruction actions in the digital space would be
or to pay for something with your digital Most applications today have several managed by the person it belongs to
wallet. But it is not good enough to mechanisms to create trust, or to create or by a representative that has been
open a bank account, to vote, to sell a context in which the environment granted access to that identity, similar
your apartment or sign legal documents can be trusted. However, typically, to how, today, we can give access to
in the name of your corporation. The it relies on identity verification through certain people to deal with legal or
reason for this is that there is no shared a burdensome onboarding experience banking activities on our behalf.
trust context between all parties and all that creates a digital identity in one
applications. Instead, new one-to-one system. This is one reason there is so Likewise, every asset that is tied to an
trust contexts are created between, much fragmentation in multi-factor identity (or someone else’s identity or
for example, us and the bank or any authentication schemes, because to a group of identities or a commercial
other organisation that requires proper there is lack of standardisation. identity) should be recorded, amended
identity verification. and transferred fully digitally, with all
There are several technologies and the necessary audits attached to it.
Each of these contexts remain in silos new protocols that have the potential This should be done in such a way
and are not interoperable. The lack of to be part of the solution to this that it is always accessible by the
interoperability prevents the use of challenge. However, it requires public- owner or, in regulated scenarios, by
digital assets by a third-party entirely. private efforts to ensure that trusted the authorities.
As an example, it would only make authorities (with government backing)
sense for someone to sign a document can be established, and standards With such an infrastructure and
to sell an apartment if that person is for the trust contexts that would be mechanism in place, commercial
the actual owner of that apartment. created. A trusted authority could be activities in retail and wholesale banks
Today, such documents are usually a bank, a government institution or an would fundamentally change. No longer
physical (paper) and issued/governed accepted private third-party with the would it be necessary to have to carry
by a central authority without much necessary government licence. This around a credit card or an ID card,
interoperability for third parties. entity would guarantee an accurate if all these elements are assets that
A digitised version of such a contract on- and off-ramp to such a system a person can access as part of their
would have a digital reference to (for example, guaranteeing that your digital identity, whether for themselves
that apartment as a digital asset. personal data is correctly created or or as a representative of a commercial
This requires trust in that digital asset modified in the system when needed). identity with the right to execute these

Foundations of Trust - Could digital assets be the final puzzle piece for a new digital world order?
“With such an infrastructure transparency over the transaction, and will require and rely
and mechanism in
on robust and secure solutions, such as Worldline’s Digital
Asset Management platform40.
place, commercial Another example is the digitization, not to mention
activities in retail and tokenization, of “service access”. Let’s assume a person

wants to go to watch a football game and requires a ticket.
wholesale banks would That ticket can be seen as an asset (i.e. it is a seat that will
be assigned to them for the duration of the game at a given
fundamentally change.” time and place). If the game is sold out, then someone can
only purchase a ticket from someone who bought a genuine
ticket (assuming reselling is allowed). How can someone
be sure that the ticket is genuine, and that the seller is the
rightful owner of the ticket at the time of the sale? It requires
activities. All they would have to do is prove their identity and a trusted system to sell, trade or distribute digital assets in
allow access to the relevant digital assets that are part of such a way that it’s impossible to “double-spend” (in other
that identity to allow a transaction to happen. words to sell the same ticket twice).
For example, in a retail scenario, the payment means could While these examples are easily understandable, it is more
be defaulted to a bank account and identity proved through interesting to think about this in the context of a retail
a combination of device and biometrics. In other words, environment. It is not necessarily a good idea to make
we believe that digital identity combined with digital assets a digital asset out of everything but, for example, when
could replace current payment means. shopping, the basket information itself could be a digital
asset. While we would no longer need to show our credit card
As already described in the chapter “Can digital identification when we pay (because our digital identity has a reference to
enable seamless, secure and borderless digital services?”, it), a more futuristic scenario could see us create real value
with the forthcoming revision of the eIDAS38 regulation, from our basket that consists of goods. Not only could we
an initial piece of the required foundation will be created. trade that information with others (if there is interest), we
Such electronic authentication is a stepping stone towards could also use it as proof of purchase in a digital form and the
digital assets. ownership of certain items in that basket would automatically
transfer to one’s own digital identity. For example, buying
What is required beyond this is a way to standardise the a TV in a store could be done entirely without paper, yet it
definition of digital assets and the way we allow our physical would still be possible for someone to prove they own the TV
world to be mapped digitally, so that we can access our and that it has a warranty that expires in the future. Likewise,
physical assets in a digital way. An example of such an they could then sell that TV and the ownership would
initiative is ISDA’s attempt to create a standard contract for transfer, together with the remaining warranty.
digitised derivatives39. But in the example of selling your
apartment, it would require that every trusted entity (within The bottom line is this: the process to obtain or sell an
an interoperable trust context) understands the asset type apartment, a ticket, a television or other items and goods,
“apartment” and can see that it is linked to the rightful digital is today largely digitised. However, the last mile, namely
identity. A potential sale would reference the digital asset ownership transfer of the asset, is not. With digital identities
type of apartment and ensure proper transfer to the new and digital assets in place, the process of transferring asset
digital entity that now owns the apartment. All this would be ownership could be much more efficient, therefore reducing
registered in such a way that all involved parties have full friction and cost.
Could digital assets be the final puzzle piece for a new digital world order?
Global digitisation is rapidly The lack of trust on the internet has Consider how this new world of
advancing, but the digitisation of led to fragmented, complex, and digital assets could impact your
assets has been on a much slower independent systems that are not business. Are there opportunities
transition path. natively interoperable with each to play a role in the solution by
other. But trusted authorities with validating identity and asset
strong government backing could ownership in an interoperable
ensure standardisation of trust, ecosystem? How could your
identity, and digital assets, leading industry benefit from the
to reduced costs and friction in efficiency and transparency of
broad asset transfers. fully digitised asset transfer?
38 https://www.europarl.europa.eu/legislative-train/spotlight-JD22/file-eid
39 https://www.isda.org/2021/12/14/contractual-standards-for-digital-asset-derivatives/
40 https://financial-services.developer.worldline.com/dam-overview

New World of Payments.
The new world of payments will be highly visible and noticeable
for merchants and consumers, changing how people buy and sell,
where they shop, and how they will access products and services.
Metaverse
Page 45 Generative AI
Small Merchants
What are the major
What solutions can
help them thrive?
in payments?
Page 40
Page 51
Page 36 Page 55
New World
of Payments
Foundations
Page 18
Page 31

Page 23 Page 27

Will we see the end of buying and owning
new products?
Consumers will Retailers have Embracing these

increasingly prioritise the opportunity new business models
reuse through to reinvent and finding the
second-hand, themselves as right operational
sharing and rental as trusted marketplaces approach can enable
ways to both save for second-hand retailers to grow
money and minimise goods, as well as their revenues, whilst
their environmental by making their at the same time
footprint. products available benefiting the planet
via subscription and and society.
rental models.
The environmental crisis, the changing global economy and new

attitudes toward ownership are accelerating a new era of alt-commerce,
changing how people buy and access products and services.
As illustrated in Figure 15, alt-commerce led to the rise of new selling channels. in the chapter “How will we pay in the
(alternative commerce) describes a Once upon a time, omnichannel metaverse?”). In short, there are now
radical shift in how people will buy and referred only to integrating in-store more ways than ever for retailers to
sell, stemming from the convergence of and online customer journeys. Now we interact with and sell to their customers.
three trends: see live-shopping41, social commerce,
autonomous stores and conversational Secondly, more and more consumers
Firstly, innovation, technology and the platforms. And, more recently, the are becoming sellers themselves. Online
need for retailers to build ever-closer metaverse has been added to this list marketplaces are enabling many more
relationships with their customers has (the impact of which we explain more people to sell goods, whether they are
second-hand (on a platform like eBay),
hand-crafted items (on a platform
like Etsy) or a new breed of content
creators, who produce, publish and
New New
monetise their output in numerous ways.
channels consumption
models
• Innovation Thirdly, environmental and economic
• Technology • Environment challenges, and a shift in people’s
• Customer • Economy attitudes towards ownership, are
intimacy • Attitudes leading to a tipping-point which will
Alt-Commerce to ownership see a huge shift in consumer behaviour
towards second-hand, sharing,
subscription and rental models.
We anticipated the shift to new channels

in the first edition of our 2021 Navigating
Digital Payments report, as well as in
our whitepaper “In-Store Payments
Re-Imagined: Delivering seamless multi-
channel retail experiences” 42. Now,
New sellers
we would like to set out our vision for
• Online marketplaces how the other building blocks of alt-
• Creator economy commerce are set to impact retailers
and how retailers must respond to
this challenge.
Figure 15: Alt-Commerce - new channels, new sellers and new consumption models.
41 https://worldline.com/en/home/main-navigation/resources/themes/Live-shopping.html
42 https://worldline.com/en/home/main-navigation/resources/resources-hub/publications/in-store-payments-re-imagined.html

New World of Payments - Will we see the end of buying and owning new products?
Environmental and economic drivers

Environmental
As illustrated in Figure 16, environmental
and economic challenges will
drive consumer behaviours in the Reduce waste
following ways:
• Environmental: The huge urgency

to protect our planet from global
warming is pushing people to reduce Second-hand
their consumption and waste.
Economic Economic
• Economic: Slow growth and high
inflation is pushing people to save Buyer: Save money Sharing Renting
costs and find ways to supplement
their income.
Buying and selling second-hand goods

reduces waste by reusing products
Reduce consumption
rather than throwing them away.
What’s more, buying second-hand is
no longer a source of shame. Rather, Environmental
people can be proud of the fact they
are reducing waste, or that they can
purchase rare, unusual or quirky items.
A survey by Global Data found that Figure 16: How environmental and economic challenges driving consumer behaviours.
74% of consumers say second-hand
apparel is more socially acceptable now
than it was 5 years ago43. And a survey
conducted by Worldline of 300 people The shift away from ownership If we look at the retail and subscription
from Europe and the US, found that economy, Decathlon in Belgium45 is
more than 90% have already bought Attitudes are also shifting away from often seen as a leader. In one study
something second-hand and 70% have ownership, towards a spectrum of other they conducted, they found that more
already re-sold. models (illustrated in Figure 17): than half of Belgians are in favour of
renting sports equipment. Their concept
Saving money is the most common • Rental: Where people pay a person is super simple: instead of purchasing
motivation when customers are asked to or company to use specific products sports equipment, each month, the
explain why they choose to buy second or services for a period of time. consumer pays for the “right to use a
hand products, with “saving” and predefined value of sports equipment”.
“economic” being the words they most • Subscription: Where people pay For example, in June, if you want to play
associate with shopping second-hand44. a recurring fee to have access to tennis, just choose your racket; in July,
certain services/products (e.g. you want to do windsurfing during your
Sharing and renting models also help to Netflix). Often called As-a-Service holiday, bring back your racket, and
reduce overall consumption. And second- or Pay-for-Access. exchange it for the needed board!
hand, sharing and renting models all have
the potential to save people money or • Sharing: Where people make available As described in the chapter “Could
earn them additional income, a topic goods that they own for other people digital assets be the final puzzle piece
we will dive into more later. to also use (e.g. Airbnb). The main for a new digital world order?”, these
difference from renting is that the models will become more digitised,
owner of the goods also uses them, making them both more efficient and
rather than owning them solely for the more traceable.
purpose of leasing them to others.
“74% of • Rent-to-own: Where people can

rent goods and, if they rent them
consumers for a long enough period, they then

own them. If they decide to stop
Own
say second-hand renting them early, they can return

them with no liability to make the Rent-to-own
apparel is remaining payments.
Sharing
more socially • Ownership: This is the traditional
buying/selling model where someone
acceptable pays for goods and, once the
exchange is complete, full ownership
Subscription
now than it was transfers to them. This includes

cases where credit is involved, like
Rental
5 years ago.” Buy Now Pay Later (BNPL) or paying

in instalments.
Figure 17: Shifting attitudes to ownership.
43 https://www.globaldata.com/media/retail/americans-projected-spend-160-1-billion-secondhand-items-2021-according-mercari-globaldatas-inaugural-reuse-report/
44 https://ung.edu/student-money-management-center/money-minute/saving-money-through-alternative-shopping-sources.php
45 https://decathlon.prezly.com/decathlon-se-lance-dans-la-location-de-materiel-sportif

Infrequent Regular casual Second Main Sole

selling selling income income income
Figure 18: The seller spectrum.
Everyone is becoming a seller • Towards the left there is always • Top-right: This is where
a need for some kind of marketplace traditional retailers operate.
One result of these trends is that the to connect buyers and sellers
dividing line between a consumer and together. This could be a physical • Bottom-right: Already advanced
a seller will disappear. Everyone will marketplace like a second-hand in many sectors (e.g. digital
sit somewhere on the selling spectrum shop on the high street. Or it could commerce such as Spotify or the
illustrated in Figure 18. This has largely be a digital platform. leisure industry such as hotels
been aided by online marketplaces and car hire) but not advanced
such as eBay, Etsy and Vinted, which • In the middle there is a role in others (e.g. clothing retail).
make it easy for buyers and sellers for commerce platforms (such
to find each other and complete a as Shopify) that make it easy • Bottom left: An area that is emerging
transaction. These platforms also for people to setup their and will gain more significance
facilitate trust between buyers and own store. – marketplaces which enable
sellers who may only transact with each infrequent and casual sellers to gain
other infrequently and often only once. • Towards the right we see income via rental, subscription and
traditional larger retailers who sharing models, such as Airbnb.
Marketplaces, commerce platforms, setup and manage their own
and traditional retailers infrastructure. The opportunity for retailers
To help understand and explain Each quadrant in this diagram The opportunity for traditional
how these changes create represents different needs from retailers is in the top-left and
opportunities for retailers, we have consumers and businesses: bottom-right spaces: becoming
created the model shown in Figure 19, a trusted marketplace for
which combines the selling-spectrum • Top-left: There are already well- second-hand goods and making
and the ownership-rental spectrum established marketplaces serving products available via subscription
together. You can see that: this need (e.g. Vinted, eBay). and rental models.
Marketplaces Commerce Platforms Traditionnal Retailers
Own Become the trusted

marketplace for
second-hand goods
Well established
Classical retail
market-place platforms
Rent-to-own
Embrace
subscription
Share and rental
Emerging marketplaces Digital

to enable person-to-person as-a-Service
Subscription
rental, subscription and and traditional
sharing rental
Rent
Infrequent Regular casual Second Main Sole

trading trading income income income
Figure 19: Opportunities for retailers in alt-commerce.

Doing this will have multiple impacts for retailers. To be a Will we see the end of buying and owning
second-hand marketplace, you must be able to quickly verify new products?
the condition of products and decide a fair value (for both
the seller and buyer). To offer subscription and rental models, Coming back to our original question, the answer will not
you must be able to anticipate when customers will wish be the same for every consumer or for every type of product.
to obtain and return products, as well as handle scenarios Different consumers will have their own motivations in
such as when items are damaged, lost or stolen. You also terms of budget, attitude towards ownership, and their
have to master reverse logistics, as efficiently receiving commitment to sustainability. And for products it is also
goods (including carrying out quality checks and refurbishing clear that second-hand or rental models don’t always
worn-out or damaged goods) becomes just as important as make sense, for example when the item is a consumable
despatching them. (e.g. toothpaste), for hygiene reasons (e.g. tooth brushes)
or for safety reasons (e.g. children’s car seats).
Mastering these reverse logistics goes beyond moving
a product from one place to another: it is also about But there are other products where it does make sense:
remanufacturing, refurbishing, and reconditioning. These for example, children’s bikes, skis or musical instruments.
activities require evaluation, repair, rebuilding, and reworking All these are goods that people may need for a while and may
of the products and needs a skilled workforce. Retailers and want to resell when they have no more use for them, whether
manufacturers can also recover interchangeable, reusable simply because children grow or because learning to play the
parts or materials from other used products, a practice violin proves to be too painful.
known as the canibalisation of parts.
When it does make sense for the consumer and the
These shifts also create new payment related requirements. product, retail businesses can benefit from offering
For example, paying out to sellers of second-hand goods second-hand and rental options, providing your
(either with money or with vouchers that can be redeemed customer the surprise and delight of finding an
in your store), accepting and refunding deposits, and setting unexpected good deal.
up recurring payments for rental and subscription. Depending
on the amount and number of pay-outs to the customer, local Many retailers will see the rise of alt-commerce as a threat.
regulations may need to be complied with. For example, in However, we believe it can also be a great opportunity.
France, if someone sells more than €5,000 worth of second- Rather than reducing the sale of new products, second-
hand belongings per year, then this income must be declared. hand and rental models will complement new sales and
Indeed, some countries oblige platforms to transmit this address a different market segment. Those retailers
information to the relevant tax authorities. Merchants must who can leverage their existing customer-base and their
also take steps to prevent money laundering by implementing position as a trusted brand can embrace alt-commerce
KYC (Know Your Customer). Payment service providers such to protect and grow their revenues, whilst at the same
as Online Payment Platform46 are developing specific offers time benefiting the planet and helping people face current
that help to meet these specialised needs. economic uncertainty.
“Rather than cannibalising the sale of new products,

second-hand and rental models will complement new sales
and address a different market segment.”
Will we see the end of buying and owning new products?
There will be a rapid shift towards This shift will disrupt retailers, Retailers will need to be flexible
second-hand, sharing and rental especially those who mostly rely on and adapt quickly. They can use
models, driven by three key selling new products today. Retailers their trusted position to become
trends: the environmental crisis, who do not respond to these shifts a marketplace for second-hand
the changing global economy, and will face reduced customer loyalty goods, whilst also embracing
a shift away from ownership. and declining revenues. business models based on
subscription and rental.
46 https://worldline.com/en/home/top-navigation/partners/solution-partners/online-payment-platform.html

What solutions can help the small
merchant thrive?
Small merchants Small merchants can Small merchants can

can help consumers reinvent their business navigate political and
and businesses through solutions economic uncertainty
reuse by focusing like conversational by using digital
on specific services commerce and solutions to diversify
like providing repairs, seamless payments. their sources of
local recycling, and They can also income, access
facilitating second- embrace e-commerce a wider audience
hand sales. They can to reach a larger through e-commerce,
also embrace digital audience, use rely less on cash
solutions to reduce data analytics and related costs,
paper as well as for individualised and lower the risks
electronic waste. marketing, and brought on by
social commerce for currency fluctuations.
direct purchasing
through social
media platforms.
Small independent merchants, the bedrock of the retail ecosystem,

are under threat from many fronts, but they can thrive if offered
the right solutions.
They are crucial to the retail ecosystem, yet they face Why small merchants matter
numerous challenges from various directions, including
competition from big-box retailers, rising operational There are multiple “heart-string” reasons why small merchants
costs, changing consumer preferences, and the digital matter and should exist. Visa conducted a survey in the UK
transformation of the industry; however, by providing them and found that “54% of consumers surveyed say it is important
with appropriate solutions, they can flourish and overcome to them to shop in a local small merchant because they know
these obstacles. what it means to independent business owners and their
staff.”47 A survey of consumers in the USA revealed that “over
half of consumers (54%) say they make an effort to shop
locally at small businesses over large retailers.” 48
That said, there are also good economic reasons why

small merchants matter. The EU‘s Small Business Act
initiative highlights the relevance of small merchants in
Europe. It recognises that SMEs (Small and Medium-sized
Enterprises), including merchants, play a crucial role in job
creation, innovation, and economic growth, and aims to
reduce the administrative burden on these businesses and
provide them with greater access to financing, markets,
and information.
“Over half of consumers say

they make an effort to shop
locally at small businesses
over large retailers.”
47 https://www.visa.co.uk/content/dam/VCOM/regional/ve/unitedkingdom/PDF/blog/visa-wysm-report-2020-031220.pdf
48 https://www.goto.com/blog/small-biz-survey-2022

New World of Payments - What solutions can help the small merchant thrive?
The challenges for small merchants

Consumers who believe that small businesses
contribute positively locally
Despite the importance of small merchants and the
89% advantages they can offer, the challenges they face are ever-
Net new jobs created by small businesses growing. Beyond the obvious one of facing tough competition
over a 17-year period from large, branded retail shops and massive online stores,
65% additional challenges are illustrated in Figure 21, and include:
Payroll contribution by small businesses

• Branding: Smaller merchants will never have the visibility
of a national or international brand nor can they match
44% their advertising budgets.
Source: American Express OPEN Infographic on the Importance
of Shopping Small. • Data analytics: While small merchants are often cited by
consumers as “knowing” them, in reality this knowledge
quite static in nature whilst their larger competitors have
accesses to dynamic data analytics.
Figure 20: American Express survey of small US businesses.49
• Market power: Small merchants will never have the same

The aforementioned Visa survey also found that “of every buying power with their suppliers/vendors, who may
£10 spent with independently-owned local businesses supply the same product at lower prices to merchants who
surveyed, £3.80 is retained in the local area.” Furthermore, as have greater heft.
shown in Figure 20, consumers’ belief that small businesses
make a positive local contribution is backed up by the actual • Encroachment: Mobile apps are now offering the ability
contribution they make to job-creation and payroll. for consumers to get their daily consumables home-
delivered within 15-20 minutes at a potentially cheaper
Small retailers offer many advantages over larger price (e.g. Swiggy in India or Gojek in Singapore).
competitors. Apart from their ability to offer specialised
products (that may not be available at larger retailers) and a • Price competitiveness and range of products: Online
community-oriented shopping experience, they also achieve providers have increased their competitiveness by
a higher degree of confidence from their customers. The US providing a wider range of products at low prices to
consumer survey found that “reliable customer support has customers with fast delivery.
the largest impact (46%) on consumers’ decision to shop
small” while the Visa report noted that “half (50%) enjoy the • Higher hiring costs: There is a shortage of retail workers
personal service they receive when they shop locally, such as globally and small merchants are facing the brunt of this
knowing their name or usual order”. shortfall and subsequently increased costs.
Given this confidence, these small merchants can also • Poor access to finance: Small merchants always need
capitalise on the fact that they can provide more expertise access to finance for working capital but, because of their
and knowledge about the products they sell and offer smaller size, they either have no access or, if they do,
customers more personalised recommendations. it can be costlier.
Digital solutions Branding

• Facing brunt of global • No visibility
worker shortage • No advertising budget
Competiveness Customer
& product range preferences
• Uncompetitive • Static knowledge
to online • No data analytic tools
• Smaller product range
Challenges
Market power
Access to finance
• Limited
• Poor access to finance market leverage
• If access, costlier • Higher cost of goods
Hiring costs Encroachment

• Facing brunt of global • Mobile apps offering
worker shortage quick delivery
of consumables
Figure 21: Challenges for small merchants.
49 https://www.retailtouchpoints.com/resources/the-importance-of-shopping-small-infographic

The future for small merchants
The future for small merchants will be affected by a wide range of factors such as economic conditions, consumer behaviour,
environmental factors and technological advancements. Moreover, the starting point varies across different geographies.
However, based on current trends, it is likely that small merchants will continue to evolve and adapt as illustrated in Figure 22.
Customer “Phygital” Payment / value Environmental

experience Solutions added services
Focus on Conversational Increased Public/private

value provided commerce (e.g. usage of digital partnerships
exclusively WhatsApp shop). payments and boosting local
by being local digital wallets. initiatives of
and/or selling small merchants.
niche products.
One-to-one live
SoftPOS
video shopping
(standard Sustainability
(personalised
Focus on smartphone concerns in
shopping online)
experience and or tablet used western Europe
and artificial
personalisation. as a payment stimulate local
intelligence
terminal) and shopping in
shop assistant
SmartPOS small merchants.
solutions.
(android based
payment
terminals).
Generative
artificial
intelligence Small merchants
Local
supporting small evolving as
marketplaces
merchant to service centres
aggregating local
provide service New features for local
small merchants.
interactions. included in the communities in
payment process certain areas
to reduce friction (health, telecoms,
to consumers financial).
(e.g. discounts, Collaboration
Quick commerce – promotions). between
Aggregated
last mile services merchants with
loyalty
(temporary complementary
programmes
holding of services.
(e.g. by segment,
packages, pick-
by geography)
up and delivery
encourages New sources
options for
shopping at of revenues
3rd parties).
small merchants. for merchants
through Contributing to
value added social coherence
services on and stable
top of payment environments.
solutions.
Figure 22: The future for small merchants.

How merchants will adapt and transform “By being adaptable and
From this you can see that small merchants will need to innovative in their response
to these advancements,
figure out how to adapt and compete in the digital realm
as e-commerce and on-demand services become more
small merchants can survive

and more popular. To attract and keep clients, this may
entail making investments in online marketing and delivery
services, as well as providing individualised and distinctive
experiences. However, customers will also look for more and succeed in a this rapidly
environmentally friendly and socially responsible solutions,
while still appreciating the convenience and immediacy of changing retail landscape.”
local shopping. Overall, as businesses look to interact with
customers in fresh and more meaningful ways, the future
of small merchants is likely to be characterised by a blend
of physical and digital techniques (so called “phygital”).
The in-store experience may be complemented with
conversational commerce (such as the proof-of-concept In addition, small merchants will increasingly collaborate with
developed by Worldline50). Potentially this could be managed other local businesses to create a stronger community and
from a payment application running on their own tablet or offer more diverse products and services as part of a wider
smartphone, to reduce the number of devices the merchant ecosystem, potentially facilitated by payments services
needs (using solutions like Worldline’s SoftPOS51). as explored later in the chapter “Towards open payment
ecosystems?”. They will also focus on sustainability and
We believe small merchants will adapt and transform in ethical practices to appeal to socially conscious consumers.
the face of new consumer trends (such as alternative
commerce, as explained in the chapter “Will we see the By being adaptable and innovative in their response to these
end of buying and owning new products?”). They will advancements, small merchants can survive and succeed in
need to utilise technology and digital payments, as well as this rapidly changing retail landscape. In Figure 23 (overleaf)
continuing to offer a personalised and community-oriented we show the concrete questions that all stakeholders should
shopping experience. ask themselves to adapt and transform in the coming years.
50 https://thepaypers.com/thought-leader-insights/what-makes-conversational-commerce-compelling-for-merchants-and-consumers--1259587
51 https://in.worldline.com/solutions/in-store-payment-solutions/wl-soft-pos

Small Merchants
• What should be your current and future business model?
• Where/who are your customers?
• How do they want to interact and engage with you digitally and physically?
• What technology do you need to consider to enable your preferred
customer experiences?
Financial Services
• What payment and payment adjacent solutions should you offer?

• Should you develop in-house or integrate with partners?
• In which markets will these be required?
Governments
• What role do you want play in supporting small business (e.g. financial,
technological, legislative)?
• How does this strategy align with other obligations in relation to citizens
and the environment?
Figure 23: Key questions that need to be answered by stakeholders.
What solutions can help the small merchant thrive?
In-store retail shopping remains How can small merchants stay Identify the technology and
one of the world’s favourite relevant by leveraging both their solutions your future consumers
pastimes, although consumers are unique local value proposition and expect, and consider what
also moving to digital channels to the technology interfaces that technological and operational
have a more diverse experience. consumers prefer? Digital payment investments you need to make to
options are expanding exponentially achieve this. In parallel, consider
but not all payment options are what opportunities there are to
suitable for all merchants. leverage government initiatives
that are accelerating growth
solutions for the small merchant.

How will we pay in the metaverse?
Virtual worlds By embracing virtual Virtual worlds enable

and their related worlds, merchants greater flexibility and
technologies can can provide responsiveness in the
inherently contribute geographically face of uncertainty
to the decreased unrestricted and crisis. They
purchase of physical interactions and may trigger broader
items by replacing 360-degree visibility, experiments and
them with virtual allowing seamless faster regrowth to
equivalents which navigation across adapt to the local
can result in the both physical and needs regardless of
limitless reuse of digital worlds, the geography.
these digital assets. while leveraging
technologies such
as AI and AR.
If we go beyond the metaverse hype, current and future virtual

and augmented reality technologies will require new ways for people
to pay.
So, here it is: the metaverse. For the sake of clarity, the so-called led to the coexistence of environments
A work of fiction (“Snow Crash” metaverse is a borrowed name that with both decentralised and centralised
by Neal Stephenson) from the 90’s refers to a vision of the evolution of the governance. In turn, this has led to the
that, 30 years later, is crossing over internet that we are now witnessing, splitting of payment means towards
into reality. rather than a frozen or proprietary crypto-payments and tokenomics
concept. Whether you are a metaverse (in decentralised environments)
The internet has evolved over the enthusiast or a metaverse sceptic, and classical online payments
last few decades, as has technology. the underlying technologies behind (in centralised ones), increasing
Augmented reality (AR), virtual the metaverse are here to stay. In this the heterogeneity of the ecosystem.
reality (VR) and mixed reality (MR), chapter we will highlight the challenges
collectively known as XR, are and opportunities presented by these Nevertheless, as shown in Figure 24
becoming mainstream. In parallel, new technologies, rather than the hype (overleaf), there is a wide choice of
other technologies have advanced and that has been surrounding them. technologies and there are many
been created, such as 5G networks, business models that one can
cloud computing, AI, DLT (Distributed Today, the combination of XR, 5G and addresses in the metaverse, ranging
Ledger Technology52), to name but a AI, combined with the evolution of the from enabling people to socialise
few. Thanks to XR, physical and digital internet, which brings together both and play games, providing immersive
worlds are becoming more and more Web 2.053 and the DLT-based Web354, work/entertainment experiences in
connected, and a blended future is on are leading us towards a mixed physical virtual environments, and managing
the horizon. and virtual world. This combination has digital assets.
52 https://www.investopedia.com/terms/d/distributed-ledger-technology-dlt.asp
53 Refers to a generation of the Web in which sites emphasise user-generated content, ease of use, a participatory culture and interoperability, but in which the restriction is
on data and content, which is argued to be centralised in a small group of companies.
(ref: https://slate.com/technology/2021/11/web3-explained-crypto-nfts-bored-apes.html)
54 It is an idea for a new iteration of the World Wide Web that incorporates concepts such as decentralisation, blockchain technologies and token-based economics to give
ownership back to the end-user web contributors. (ref: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4017790)

New World of Payments - How will we pay in the metaverse?
Decentralised metaverse Centralised metaverse

(Web3 Flavoured) (Immersive Flavoured)
Crypto-art Brands, retailers and

tal asset & gaming
buzz and winter igi cial banks explore social
So
interactions in games
D
zation XR VR AR
ali
r
3 decent
Retrailers & brands
test NFT as loyalty, Social and B2C social
virtual goods, IRL interactions in 3D and
Web
benefits VR for banks and brands
Web3 virtual world tests for Lots of B2B explorations for

banks, insurers, merchants, HR, events, training…
fashion, events…
Crypto-payment & Tokenomics Online-payment

(token-transaction to pay and token-valorization) (micro- & nano-payment, virtual currency)
Figure 24: Technology ecosystems vs. business perspectives.
What is the payment industry doing in the metaverse? Close to this development of immersive experiences in
the payments space, an important disruption in the digital
Card providers such as Visa, Mastercard, and American economy has been the use of DLT technology, which has
Express are exploring opportunities, while Worldline has had an impact on cryptocurrencies and non-fungible tokens
become one of the first payment organisations to enter (NFTs), making them important assets in the metaverse (and
the metaverse with the creation of a dedicated virtual perhaps paving the way for the further digitisation of assets
showroom55. Worldline has also been exploring how payments as described in the chapter “Could digital assets be the final
can be made without needing to leave the immersive puzzle piece for a new digital world order?”). As shown in
experience, whether through a PIN code entered onto a Figure 24, in addition to these crypto-assets, Web3 and,
virtual number pad that appears on your hand, or through more generally, decentralised architectures have led to the
voice or behavioural biometry56 . emergence of new platforms (e.g. Decentraland, Sandbox)
and the interest of traditional retailers and banks. They are
investing in virtual countries with cryptocurrency payments
to experiment with future immersive and social experiences.
“This new and changing In addition, NFTs are gaining more and more attention and
are penetrating various sectors such as gaming, loyalty,
environment is leading and digital extensions of real goods. This new and changing
environment is leading to increasing uncertainty about the
to increasing uncertainty means of payment in the metaverse.
about the means of

payment in the metaverse.”
55 https://worldline.com/en/home/top-navigation/media-relations/press-release/worldline-makes-it-easier-for-companies-to-enter-the-metaverse.html
56 https://worldline.com/en/home/main-navigation/resources/resources-hub/blogs/2023/what-are-the-essential-ingredients-for-creating-secured-and-immersive-vr-
payment-xperiences-.html

What complications does the to another currency. The friction particular, are in a winter period57
metaverse create for payments? that comes with these operations (untrustworthy, volatile and numerous).
is not improved by the fluctuations Therefore, securing payments with
The next web shift (see Figure 25), in international currency markets easy-to-use, secure payment methods
digitised assets (see Figure 26 - and crypto-currencies. is critical and essential for this industry
overleaf) and immersive experiences to grow and succeed.
(see Figure 27 - overleaf), are evolving So, while there are fantastic
rapidly but not at the same pace. opportunities for brands, merchants VR technology can deliver powerful,
Today, as in any new ecosystem, there and banks alike to experiment with immersive experiences to end users,
are different types of metaverses, each new technologies, services and uses, enabling an immediate, strong
operating on its own platform with little there are also significant challenges emotional connection in some use
interoperability. However, users would and risks in deciding on investments, cases (e.g. gaming). However, other use
also like to be able to seamlessly take the best timeframes and defining cases, such as identity management
their objects acquired in one metaverse concrete business plans. It is a and payment require effort to catch
and use them in another metaverse or, stage similar to the early days of the up with these. This will require
even better, be able to navigate in a Internet or mobile phones, where massive investment and will take time
unified metaverse. But this so-called technology alone cannot determine to create in a way that uses such
interoperability between metaverses successful business outcomes, technology efficiently.
is not yet possible. From a payment leaving only opportunities mixed
perspective, different wallets are used with uncertainties. What does the future hold for digital
and each platform has its own currency. payments in the metaverse?
This results in the need for multiple There is also a lack of regulation and
exchanges, where someone holding guarantees of trust, security and So far we have described what has
government-backed currency has insurance to frame the potential of happened up until now. Now we will
to buy a different currency to get on these new technologies. Today, DLT/ try to predict what we think will be
board, exchange between currencies Web3-based transactions and payment important developments in the in
whilst on board, and off board back solutions, and cryptocurrencies in medium and long term future.
Web3 “utopia” Pragmatic Web3: Today’s web:

The next web shift Big tech domination
• All decentralised • Both centralised & decentralised • All centralised

• No longer ruled by corporations’ • User’s data control, user’s • Digital life steered by Big Players
omnipotence contributions valorization • Your data is money, no real
• No more governments • Self-sovereign entities & trusted privacy
or central banks architecture by design
Convergence
Figure 25: Web3 definition - the next web shift.
57 https://www.investopedia.com/what-went-wrong-with-ftx-6828447

Monetary assets Any other assets: NFTs Decentralized applications
Crypto-currencies Digital content DeFi for Banks:

• Wholesale settlement • Images • Decentralized exchanges, yield
• Investment • 3D models farming, liquidity mining, stablecoin
• Payment • Music cases, lending platforms, prediction
markets, derivatives trading
Merchants’ cases
• Loyalty, rewards & discounts,
ownership traceability, identity
(SBT), privileged access, ticketing
& access control
New generation of services
Figure 26: From digital assets to decentralised services.
In the medium term (up to 2025), trust and identity In the longer term future (2030 and beyond), as the blended
management, based on Know Your Customer (KYC) and Anti- world combines different users and different markets, Web3,
Money Laundering (AML), will be essential for compliance VR and AR will become standards, but not necessarily at
with regulations and to protect consumers’ interests and the same time58. Standardised protocols and governance
privacy which will, in turn, drive trust. mechanisms will be the drivers for everyday adoption of
the metaverse from the technology side. Payments will
Technology will evolve to become more user-friendly become invisible and intelligent, while giving the end user the
and affordable for the general population. The drivers control they expect from technology to transact safely in the
will be the evolution of XR, greater communication metaverse. End-users will expect a unique metaverse wallet
bandwidth, more processing power, cost reduction and to connect, identify, validate transactions, sign contracts
device simplification. and pay, especially given the liquefaction59 of goods that will
transform many transactions into barter.
Adoption of the technology will be driven by its users.
As an “immersion native” population (see Figure 28), Gen More digital economy models will be developed with
Z and Gen Alpha will motivate banks, retailers and brands implications for the payments landscape. This will lead to
to shift from using the metaverse purely for its marketing value creation in the metaverse while enhancing interaction
value towards generating business value from transactions. in the real world through a myriad of immersive channels,
For example, banks can help people manage their money and creating a fully hybrid ecosystem. Transactions will seamlessly
build a more personalised banking service based on virtual traverse metaverses, unifying them into a unique “ubiquitous
branch propositions. metaverse”60. This unification will occur at the cost of
increasing the diversity of the ecosystem. Stablecoins will
Despite the fragmented market, the number of payment provide corrections to the limitations of cryptocurrencies
methods will start to converge. First, we will see the in the ubiquitous metaverse. With increasing government
emergence of cross-metaverse independent wallets. involvement and regulation towards Central Bank Digital
This unification may come from the payment space with Currencies (CBDCs), the adoption of multi-currency/asset
wallet solutions such as MetaMask, Coinbase Wallet or digital wallets will accelerate. The “ubiquitous metaverse”
Ryogoku. Micropayments could be the main payment as a new payment platform will be more secure, trusted and
differentiator to enable interoperability between metaverses interoperable, to enable the exchange of digital assets between
due to the liquid and fractional nature of many virtual users. Tokenisation of real-world assets will play a fundamental
services compared to real-world physical ones. role in the ubiquitous metaverse. Banks will provide a gateway
58 A good example is Zwift Indoor Cycling, which has been a hugely successful traditional 2D platform, which with the rise of VR sees the possibilities of immersion increased
tenfold and made more exciting for the end user.
59 https://www.omfif.org/wp-content/uploads/2022/12/Future-of-Payments-2022-1.pdf
60 https://www.omfif.org/wp-content/uploads/2022/12/Future-of-Payments-2022-1.pdf

Flat User Interface (2D) Natural & Spacial Interfaces Extended Reality (3D)
Web Native Haptic Neural Gesture AR MR VR
Handlheld Blended Fully

Speech Sound Smell
Smart devices or mounted physical/ virtual
(laptops, tablets, phones, display natural & experience
TV’s, windshields) & smart holographic
devices
Emotional connection
Figure 27: Evolution of immersive experience.
for people to buy tokens as property the metaverse. Yet the returns a great deal of valuable experience.
and move them seamlessly from appear to be low, as the metaverse Nonetheless, it probably makes
one metaverse to another in a token is today mainly accessed only by sense to play to your strengths:
exchange marketplace. early adopters. However, now is experiment in areas you know well
the time to experiment with the to leverage your expertise. Enter the
Now is the time to experiment technologies, rather than the concept metaverse through your technological
of the metaverse, to gain experience skills (e.g. crypto-asset exchange,
As we have seen, many banks, and be ready when adoption starts trustworthiness, asset management)
merchants and payment providers to boom. Experimentation is still and be clear about which parts of your
are currently experimenting with relatively inexpensive and can provide business it makes sense for.
Workforce of 2030 Gen Beta

Gen Alpha
Web3 & Metaverse Native
X 23% Y 32% Z 34% α 11%
1st gen-A teen
45% Gen Z
of workforce in 2030 Payment
Social Media / Video Native with biometric
1 gen-Z teen
st Open
Payment
NFC
Millennials
Internet Native
1st millennial teen
We are here
1980 1990 2000 2010 2020 2030
Figure 28: Gen Z & Gen Alpha are set to be the most digitally immersed generation to date.

“Now is the time to experiment with the

technologies, rather than the concept
of the metaverse, to gain experience
and be ready when adoption occurs.”
The customers of the future are Gen Z and Gen Alpha, Start with the metaverse at the level of your customers and
who are growing up with this technology as part of their where you can deliver your service most efficiently.
daily lives. Hiring the right people who understand the
technologies behind the metaverse and who can facilitate As we are at an early adoption stage, think of the metaverse as
new business development in a straightforward way a diversification of channels. Immersive VR technology is not
is critical. yet widely available due to the high entry barrier. Therefore,
we believe that AR on mobile will be adopted much earlier.
The value of a network is determined by the number of AR can create new bridges between the virtual and real worlds
users acting and interacting on it. Therefore, interoperability to develop new business. For example, a retailer could use AR
between metaverses (towards a ubiquitous metaverse) will to provide an augmented experience with an app that provides
increase the value of a metaverse from a user perspective. additional information about its products.
How will we pay in the metaverse?
There is a trend towards blended Today, there is still a high level of Understand how your business
physical and immersive virtual friction and a lack of interoperability should enter the metaverse
worlds. Despite their issues, between virtual worlds, particularly in a way that makes sense for
cryptocurrencies are still the in payments. There is also a lack your customers, core market
main means of transaction in the of regulation, trust, security and and technological capabilities.
metaverse. New platforms such privacy. Identity management and Be prepared for payments in the
as Decentraland and Sandbox are payment experience require more metaverse to shift towards stable
emerging and crypto assets (such effort than immersive-native use coins that support micropayments.
as NFTs) are gaining transactions. cases like gaming. Furthermore,
So far, most traditional retailers there is potentially a high carbon
and banks have limited impact and energy cost.
involvement in this new space.

What are the major threats and opportunities
of generative AI in payments?
Reuse the impressive Provide targeted Boost efficiency by

capabilities of and personalised using generative AI in
pretrained generative information, guidance an assistive capacity
AI models that are and support, using to help your staff
able, with the right accessible interfaces create text, images
command, to create based on natural and source code,
the content you need language, to reinvent saving them time
even without fine- how your interact and enabling them to
tuning your own data. with your customers. focus on more value-
added activities.
Thanks to ChatGPT, generative AI has rocketed into the mainstream.

It is set to impact many industries, including payments.
As illustrated in Figure 29, generative AI describes This application of AI has existed for some time (see
the use of AI to generate content that is similar to that Figure 30 - overleaf)61. Indeed, we examined it in our 2021
produced by humans. This can range from written paper “Hyperautomation in Payments”62. However, it has
words through to audio speech, artwork, photos, videos, recently entered the mainstream thanks to ChatGPT which
and more. has provided a user-friendly interface where anyone can
Artificial Machine Deep Generative ChatGPT

Intelligence Learning Learning AI & GPT-like
(AI) (ML) (DL) (GenAI) models
Ability of machines to Subset of a AI Area of ML based Set of DL engines A specific type
mimic the intelligent that deals with on complex neural which can generate of GenAI models
behavior of the the extraction of networks, inspired various contents specialized in natural
human mind, like patterns from a by the neurons of (text, multimedia, language processing
reasoning, meaning historical dataset to the human mind, and source code, etc.), and pretrained to
inference, problem generate insights and which can process a usually from a text generate context-
solving, or learning forecasting based very large amount of prompt describing aware text contents in
from experience. on experience. unstructured data. the desired outcome. a conversational way.
Refers to any Includes unsupervised, Requires high Can be refined with Built on top of large
technical approach to supervised, performance prompt engineering language models
perform a given task, semi-supervised, computing power, like to build the most (LLMs) with a vast
in a smaller way. self-supervised, graphical processing efficient request. number of parameters.
and reinforcement units (GPU).
learning methods.
Figure 29: What is Generative AI?
61 Vaswani, Ashish, et al. «Attention is all you need.» Advances in neural information processing systems 30 (2017).
https://proceedings.neurips.cc/paper/2017/file/3f5ee243547dee91fbd053c1c4a845aa-Paper.pdf
62 https://worldline.com/en/home/main-navigation/resources/resources-hub/publications/harnessing-ai-to-achieve-hyperautomation-in-payments.html

New World of Payments - What are the major threats and opportunities of generative AI in payments?
ABCDE ABCDE Alpaca10

BARD 2
BING Chat6
Encoder Decoder Claude 11
BigBird 2
Electra4 CoT8
A ₋ C ₋ E ABCDE Albert 2
GPT31 CLIP1 BlenderBot33 GPT-41
BART3 MDR3 Dall-E1 GPT 3.5 1 GPT-J & GPT-Neo12
GPT21 Megatron 5 EASE 3 Chinchilla7 BLOOM 13
Year Publication
PEGASUS2 ProphetNet6 GLaM 2 DQ-BART8 OpenGPT-X14
of Social of “Attention GPT1 XLM-Roberta 3 HTML 3 LAMDA 2 Open-Assistant15
T5 2
Chatbots is all you need” BERT2 XLNet 2 Turing-NLG 6 Switch 2 Stable Diffusion9 OPT & LLaMA 3
2016 2017 2018 2019 2020 2021 2022 2023
1
OpenAI. 2Google. 3Meta. 4Stanford. 5NVidia. 6Microsoft. 7DeepMind. 8Amazon. 9Stability AI. 10Standford University. 11Anthropic. 12EleutherAI.
13
EU Research/Huggingface. 14EU Research. 15LaionAI.
Figure 30: Timeline of Natural Language Processing evolution, starting with the concept of Attention and the Transfomrer architecture,
which inspired numerous generative AI models since then.
try it out free of charge. In doing so, it reached one million Another aspect of payments that is often labour intensive is
users in just five days, and opened up many people’s minds managing exceptions, such as disputes. Generative AI tools
to the possibilities that generative AI can bring63. Many other have tremendous potential to work with trained practitioners.
vendors are also integrating generative AI into their products, They could automate the collection of relevant facts from
for example Microsoft with Copilot and Adobe with Firefly. all parties and generate a solid first draft of an agreement
in minutes rather than days. And, once the agreement has
Not only can generative AI produce text for human been shared with the parties, generative AI could also
consumption, such as reports and poetry, but it can also be used to explain it in language that is easy for them to
generate computer code in response to requirements understand, with the additional advantage of being able
expressed in a conversational way64. This “prompt learning”, to directly answer any follow-up questions.
where algorithms can adjust and refine their output through
a series of interactions, allows generative AI to be useful The second impact relates to authentication and fraud. AI-
for a wide range of use cases. generated speech can already deceive voice authentication
algorithms, and onboarding processes can be fooled with
The potential impact of generative AI on content creation is fake images or videos. Fraudsters are also using large
huge. Whilst there will probably always be some content that language models to conduct social engineering attacks
is more valuable because it was created by a specific person at scale. However, generative AI could also assist in fraud
(e.g. a famous artist or writer), there is much content where prevention by, for example, quickly collecting more contextual
people care less about the production process and more information when fraud is reported. This information could
about the quality of the material (e.g. films or sitcom scripts, help improve future detection and prevention efforts.
building architecture, gaming designs, etc.).
The third impact relates to providing support and summarising
The impact of generative AI could be tremendous, and the information. Today, when selecting a TV via an online website,
world of payments is not immune to this. you might be able to filter by a few criteria (such as size,
screen type, brand, etc.) to narrow down your search. For
How will generative AI impact payments? more detailed comparisons you might visit review websites
or even download product manuals to check specifications.
There will undoubtedly be numerous impacts on payments Generative AI could make this buying journey much smoother
through the application of generative AI. There are three by asking a series of questions to help you narrow down
impacts that we think are particularly important to consider: your search and offer advice. The advice would be highly
personalised, using vocabulary that suits you best, together
The first is the impact on efficiency. Just like in any other with the appropriate level of explanation. Online retailers that
industry, generative AI will be used to improve the efficiency of don’t offer this assistance might become as obsolete as online
existing processes and tasks. Whilst this impact is not specific stores that provide no method for searching and filtering
to payments, that doesn’t mean the impact won’t be substantial. products today.
A specific application of this efficiency in payments will be And, of course, once the best product is chosen, you might
software integration. Payments always must be integrated expect similar assistance with completing the payment.
with other IT systems, a topic explored further in the chapter In a conversational way you could select whether to pay in
“Towards open payment ecosystems?”. Being able to create full, split the payment, or use loyalty points. You might also
API integrations by simply explaining your needs to an AI-bot, be prompted to move money between bank accounts to
which can then code them for you in a programming language avoid going overdrawn or to explore other financial options
of your choice, could transform speed and efficiency for this (such as a specific credit card) that would make sense for
task. Generative AI could also help with modernising legacy this particular purchase. As discussed earlier in the chapter
systems, either by analysing and commenting a large existing “In a cashless world, who gets left behind?”, these use
codebase, or even by transforming it from one programming cases could help to boost financial inclusion. It is clear that
language to a more modern one. successful payment services will need to offer simple ways
63 Nestor Maslej, et al., “The AI Index 2023 Annual Report,” AI Index Steering Committee,
Institute for Human-Centered AI, Stanford University, Stanford, CA, April 2023. https://aiindex.stanford.edu/wp-content/uploads/2023/04/HAI_AI-Index-Report_2023.pdf
64 Bubeck, Sébastien, et al. «Sparks of artificial general intelligence: Early experiments with GPT-4.» arXiv preprint arXiv:2303.12712 (2023).
https://arxiv.org/pdf/2303.12712.pdf

User journey Payment impact Main new challenges
• Comparison and summaries about Conversational Focus of the conversation

products in natural language checkout & payment and fine tuning of the right
Shopping • Hyper-customization (level of phase content
On the explanation, vocabulary)
consumer
side
Automation & • Easier booking with a Q&A assistant Customized advice Need for reinforced
• Assistant via voice interface in case on payment means authetication and fraud
accessibility Travel
of problem during the trip and refund options management
• Website image and photos generation Easier payment Quality of content,

Design,
• Videos and social media content API integration transparency and
On the marketing
• Targeted email campaigns avoiding manipulation
professional & website development
user side
Efficiency tools • Generative chatbot and callbot Focus on complex Accuracy of generated
& well-being Customer
• Documentation Q&A for the agent situations and answers and limitation
services
• Customised email responses value-added services of hallucinations
Figure 31: Examples of how generative AI could impact the customer journey and payment process.
to be integrated with such generative

AI solutions.
The challenges of generative AI “We may even
Other examples could be imagined in
The increasing use of generative AI
also creates challenges for consumers,
see a renaissance
travel. For example, when a flight or
train is cancelled, hundreds of people
businesses and society at large. of physical
require fast, personalised advice. For consumers, a key challenge in-person
meetings in
Generative AI could evaluate options will be how can they trust content
that take into account the urgency of generated by AI?
situations where
the journey, budget constraints, ticket
restrictions, availability and any other On one level, this entails knowing
authenticity is
relevant factors that matter to the whether the answers to their questions
traveller. What’s more, this assistance are trustworthy: unbiased, factually
could be offered via a voice interface:
discussing options with you while you
correct and not designed to subtly
manipulate their behaviour. Take the highly important.”
are driving to the airport. Implementing example of asking for a summary
such use cases requires that the AI about a topic. Exactly how that
model not only relies on its training summary is constructed (and what
data, but also retrieves real-time information is left in or taken away) a recommendation based on an AI-
information, accesses knowledgebases can influence the conclusions reached produced summary of legal documents.
and performs actions. ChatGPT by the end user66. If it later turns out that this advice
illustrates how this can be achieved was flawed because the summary
through its plugin architecture65. At another level, how can a consumer was flawed, who would be liable?
trust that what they are reading has If a company uses AI algorithms
We have illustrated some examples of been written by who they expect. to generate content, who owns
how generative AI will impact customer Was a book, news article or political the intellectual property? Is it the
journeys and the payment experience speech really the work of the named developers of the algorithm, the
in Figure 31. author, or has it been generated by owners of the material used to train
AI? How can consumers know that the algorithm, or the company that is
“How can a
an email conversation is really with using the algorithm? Some algorithms
their bank and not with an AI-bot that do plagiarise work, reproducing
consumer trust is conducting a social engineering

attack? We may even see a renaissance
verbatim parts of their training data67
(without crediting the original creator).
that what they are of physical in-person meetings in

situations where authenticity is
This challenge is just as relevant when
producing computer code. Even open-
reading has been highly important. source code is typically released under
some form of license which may or may
written by who For businesses, the issues of

responsibility and intellectual property
not be appropriate for its intended use.
Intellectual property laws will have to
they expect?” are important. A lawyer might make adapt to address these challenges.
65 https://platform.openai.com/docs/plugins/introduction
66 https://www.nature.com/articles/s41598-023-31341-0
67 https://arxiv.org/abs/2301.13188

For society, the key questions relate to employment and However, to assist with research, or help develop some
sovereignty. When technology is used to automate jobs that code, or even to provide some inspiration and alternative
most people don’t want to do (e.g. mundane repetitive tasks) viewpoints, generative AI is already mature enough to
then the challenge is what can those people do instead to be used today. Think about how this could benefit your
earn money? But once technology is used to replace non- organisation, and what education your staff may need to
repetitive jobs which many people love doing (e.g. movie use it effectively.
script writing), there is a wider question about whether this
is in the interest of our society. With some predicting that Now is also the time to start investigating how generative
ChatGPT could lead to huge job losses (e.g. 26% of European AI could improve your products and services in more
tech firms to cut jobs68 ), it is also possible that generative AI transformative ways. As it starts to open up the possibility
will lead to such a rapid and drastic reduction in workforce of giving any customer the equivalent of undivided personal
requirements, that societies will have insufficient time to attention without any wait time, think about when this would
adapt (e.g. people finding new careers or governments bring the most value to your customers.
reforming social benefit systems).
What are the major threats and opportunities of
It is likely that countries where generative AI is effectively generative AI in payments?
leveraged will see economic benefits, therefore leading to
the question of how reliant governments should be on other Returning to our original question, as we have already
states for access to this infrastructure – as geopolitical highlighted, generative AI can pose challenges in the
uncertainty increases, this question of sovereignty becomes payments industry around authentication, KYC (Know Your
more important. Customer) and social engineering scams, as fraudsters start
using this technology.
In addition, today, generative AI algorithms require significant
power to run. They will need to become more efficient and However, it should also be clear that AI offers great
run using green energy sources if they are not to exacerbate opportunities, not only for improving efficiency, but also for
the climate emergency. providing highly personalised services to customers from the
moment they first consider making a purchase, all the way
What action should you take now? through the transaction and payment processes, and then
for after-care customer service.
Generative AI is already mature enough to be used as an
assistant. However, care must still be taken. For example, You can start experimenting with this technology and pilot
today’s generative AI models will create answers when they solutions in a controlled manner70. In some cases, delaying
can’t find one – but these answers could be entirely wrong69. action could put you at a severe disadvantage compared
to your competitors. On the other hand, acting early
When dealing with sensitive information, the models may could give you a competitive edge by reducing costs and
need to be run on specific infrastructure. And people will enabling you to provide an unrivalled level of personalisation
have to be aware of the potential limitations and biases. to your customers.
What are the major threats and opportunities of generative AI in payments?
The purpose of generative AI is On the one hand, the challenge for In the short term, businesses need
to produce content of a quality businesses across all industries to find ways to use generative
comparable to that produced is how to harness this technology AI in use-cases where it is used
by well-trained humans, but at in an ethical way. On the other as a tool to improve efficiency
a lower cost. This makes it very hand, this technology will also be by assisting humans (rather than
attractive for boosting efficiency exploited by fraudsters to carry replacing them). In the longer
and transforming buying journeys. out increasingly sophisticated term, businesses should assess
attacks, meaning that payment how generative AI could assume
systems must be ready to counter a more transformative role in
these threats. the products and services they
offer. This could involve providing
customers with undivided
personal attention without them
having to wait for it.
68 https://aibusiness.com/nlp/26-of-european-tech-firms-to-cut-jobs-due-to-chatgpt
69 Made-up answers like this are termed “hallucinations”
70 The European Parliament is considering legislation to govern AI software development to control risks through its Artificial Intelligence Act

Towards open payment ecosystems?
New ecosystems Evolving your This changed

that have appeared ecosystem business approach can
in some emerging models towards a help regrow an
markets have led to more open strategy entire market in a
new business models built on interoperable sustainable and
that were locally payment and resilient way, with
very successful. commerce benefits for all
Mature market technology contributors thanks
ecosystems, that enables new user to the trust and
are under constant experiences. This convenience brought
growth pressure, can also lead to by open payments,
can learn from these reinvented business digital identity and
winning strategies models that will AI personalisation
by reusing the best engage and empower driven ecosystems.
open technology your customers to
frameworks and contribute to and
business models from benefit from your
all over the world. ecosystem as well.
Ecosystems are critical for further development of businesses

in this fast-evolving and highly digitised world.
In Asia, we have seen the rise of super apps, and whilst Super Apps
they may not be directly replicable in the west, they are
an excellent example of how to build a network of super Super apps are an amalgamation of multiple products
connected services from a variety of entities. The goal of and services onto a single platform, under a single user
such ecosystems is to create value for all participants while agreement and payments infrastructure. The convenience
maintaining the overall health and resilience of the system. and the user experience trump the brand value and the trust
that typically characterise traditional standalone products.
Are today’s commercial ecosystems reaching their limits? Providing superior experiences leads to new user acquisition,
while at the same time making it more difficult to develop
When observing any ecosystem of products and services, new offers with the same pace. Examples include Alipay,
the underlying denominator across them all is the enablement WeChat, Baidu, Careem and Paytm.
of business transactions with a clear focus on trust and
convenience, which are fundamental for any sustainable Commerce platforms
business model (as illustrated in Figure 32). Today’s market is
strongly diversified, representing various models that we can As mentioned in the chapter “Will we see the end of buying and
group into four distinct categories: owning new products?”, commerce platforms are at the heart
of merchants’ online day-to-day operations. When vendors
combine multiple complementary services (such as ERP, CRM,
accounting, warehousing, logistics, subscriptions, payments,
financing and more) under a single contract, it becomes so
much easier for business owners to focus on growing their
SuperApp Social Commerce “Tech” business and achieving operational excellence. However, this
Ecosystem Media platforms Product operational simplicity comes with a higher operating cost both
Ecosystem & Service for the merchant and the platform. Examples include Shopify,
platforms Toast, Lightspeed, Wix and Salesforce.
Social media platforms

Convenience Trust Social media platforms have been successful in capturing
the attention of millions of users by providing endless user
generated content. These platforms monetise this continuous
engagement through advertising and commerce capabilities.
Examples include Instagram, Tiktok, WhatsApp, Facebook,
Figure 32: Ecosystems and their drivers to success. Youtube, Twitter and LinkedIn.

New World of Payments - Towards open payment ecosystems?
Product and service Ecosystem challenges To maintain trust in an ecosystem is

driven ecosystems expensive as the ecosystem operators
Convenience-of-use and must manage the complexity of the
From asking a digital assistant over a ease-of-onboarding have made compliance and provide protection for
smart speaker to order your groceries the usage of these ecosystems buyers and sellers, while keeping fraud
to enabling autonomous payments very natural, resulting in widespread risks and exception handling under
from vehicles, there have been some adoption of their services. However, control – all of which can lead to very
very successful product ecosystems only those vendors capable of high operational costs, exacerbated
that have become a part of our daily combining this convenience further by the pressure of trade, data
lives. Examples include Apple, Amazon with a sufficient level of trust and user protection regulations, as well
Google, Mercedes71 and Uber. have succeeded. as payment compliance requirements
(as illustrated in Figure 33).
Consequently, in the quest for

sustainable business models, these
Convenience & simplicity Increasing complexity ecosystems look for even broader
Consumer expectations Compliance requirements usage and adoption, investing in
new use cases and additional user
Personalisation
acquisition (e.g. providing flexible

management
financing options, for both end users

Guarantees
last minute
Regulation
Resilience
Exception
Fraud risk
High and merchants). On top of this,

Instant &
handling
Security
investment remaining compliant with all trade and

payment related regulations, reinforced
by consumer and data protection
Business restrictions, drives the current business
model pressure models (which are often based on data-
driven monetisation) to their limits.
Competition: use case generalisation
Regulatory consumer protection
Monetisation challenges
Figure 33: Ecosystem challenges & increasing costs.
71 https://www.mercedes-benz-mobility.com/en/what-we-do/payment-services/

“Payment rails have Flexible prosumer service platforms

driven by strong identity
become the new glue and Next to payment, a strong identity creates the necessary
enabling force for very layer of trust to access additional services, that extend
product or service consumption (as illustrated in Figure 35
successful ecosystems.” - overleaf). Contracting beyond single sales operations
suddenly becomes possible in a fully digitised and convenient
way. Any service requiring a stronger KYC validation can
also be sold and delivered by the ecosystem as well. Online
Payment Platform76 is an excellent example of a service
Could trusted payment rails be the engine provider facilitating ecosystems through strong KYC, instantly
for interoperable trust? enhancing reliability and adding extra value.
The relentless digitisation of society requires affordable and Stronger validated identities can enable known consumers
accessible digital payments everywhere. In countries like to also become trusted vendors. In today’s world, there are
India72, China73, Brazil74, and in progress in Europe75, unified many examples where consumers occasionally or more
open payment systems have laid the foundations for building structurally also provide services, sell goods or share their
the commerce infrastructure of the future. Progressing at an resources, as elaborated further in the chapter “Will we see
extremely fast pace, these payment rails have become the the end of buying and owning new products?”
new glue and enabling force for very successful ecosystems.
AI empowered personalisation and convenience
Each of these initiatives brought the success factors for driving ecosystems to success
ecosystems to the next level:
Current ecosystems maintain control while giving people the
• Convenience: embedding smooth payment into many feeling of independence and choice. People receive product
concrete use cases, within an open innovation market, recommendations that the ecosystem ants to suggest
where many players can contribute and benefit. (even if based on their browsing history or other data about
them). Meanwhile, more and more specialised vertical
• Trust: not just in the platform provider, but in the trusted ecosystems targeting specific sub-domains of the main
payment rails that are instant and clearly regulated, ecosystem’s market are emerging, providing a type of user-
delivering value to both sellers and buyers. controlled personalisation. A nature lover would use Welcome
To My Garden77 instead of Airbnb, Booking.com or other
These payment rails are the driving force for creating open generalised solutions. Further in the future, people might even
and trusted ecosystems that could be considered as open be able to create a fully personalised ecosystem of their own,
source ecosystems, built by multiple partners and allowing containing only the sellers and services they are interested in.
any player in the market to use them while tailoring them to
their own business objectives (Figure 34). Someone’s preferences, their historical actions and
transactions, and other contextual information could be easily
The future belongs to personalised used – with their consent – to build personalised AI models.
prosumer ecosystems These models can suggest and select sellers, products,
and the content that align best with their desires. Further AI
The most successful ecosystems of the future will be built developments may lead to dynamic models suggesting how
by combining open payment frameworks, digital identity individuals can further develop their interests and grow their
and artificial intelligence (see also “Can digital identification skills. This hyper-personalisation can be envisaged in many
enable seamless, secure and borderless digital services?” ways, but the most successful ecosystems will all incorporate
and “What are the major threats and opportunities of embedded AI as a core engine together with open payments
generative AI in payments?”). These elements will drive ecosystems, to bring people the best fit value proposition
extreme personalisation in an environment where everyone and assure they can immediately settle its cost. This
can be both a buyer and a seller. evolution is illustrated in Figure 36 (overleaf).
Eco- Eco- Eco- Open source

system system system Ecosystem
Trust Trust Trust Universal Payment Trust
Figure 34: Payment driving to Universal Trust ecosystems.
72 https://www.npci.org.in/what-we-do/upi/product-overview
73 http://www.pbc.gov.cn/en/3688241/3688663/3688666/index.html
74 https://www.bcb.gov.br/en/financialstability/pix_en
75 https://www.epicompany.eu/
76 https://onlinepaymentplatform.com/
77 https://welcometomygarden.org/

Sellers Service Providers Prosumers
Products Contracts
Products Services Contracts Obligations
Services Obligations
Buyers Users Prosumers
Figure 35: A strong Digital Identity driving to flexible prosumer ecosystems.
Towards trust through Universal distributed back to a diverse array of and digital currencies, will unlock
Payment Ecosystems? merchants and individuals, instead of alternate channels of commerce
being held by the monolithic owners and empower local vendors to
By combining the universal trust of the ecosystems. immediately realise a global reach.
of regulated payment and identity With stronger identities and
services with the personalised The successful ecosystems of trusted payments, these ecosystems
convenience that AI can bring, the future will leverage this newly will possess the flexibility to serve
the ecosystems of the future have created, regulated level playing field, both casual and regular seller-
the potential to bring digital innovation using the security and trust instilled buyers in alternative commerce
in an open market to the next level by trusted payment technologies models for goods and services.
(Figure 37). as a fundamental starting point for Integrating artificial intelligence at
innovative platforms where anyone the core of the ecosystem will make
Driven by private, regulator or creating value can also benefit from it. it possible to offer hyper-personalised
central bank managed payment These easily accessible, convenient, products and services tailored to
foundations, the commerce space will open-source ecosystems, equipped the buyer’s preferences, behaviour
be democratised and power will be with embedded digital identity and purchasing patterns.
Global Market Specialized Niche My Personal

Ecosystem Ecosystem Ecosystem
WelcomeTo My Travel
AirBnB MyGarden Assistant
Figure 36: AI creating my personal ecosystem.
“Power will be
distributed back Payment AI Identity
to a diverse array
of merchants
and individuals.” Universal Payment Ecosystems
Hyperpersonal Regulated Prosumer
Payment driven Opensource
Figure 37: The Universal Payment Ecosystem of the future.

Towards open payment ecosystems?
The current macro-economic As trade and data usage become Open Payment Frameworks will
landscape is challenging more regulated and payments be the keystone towards building
today’s single-vendor become more open (with efficient and inclusive ecosystems
dominated ecosystems which frameworks like UPI and Pix), that bring interoperable partners
have traditionally focused on the dominant vendors in these together to fuel the digital
continuous growth and the ecosystems will have to re- revolution. How will this impact
struggle for short term business consider their business models to your business, whether as an
value and profitability. remain relevant. ecosystem platform, merchant,
or payment service provider?

Conclusion.
The payments landscape is complex, and becoming Thirdly, and perhaps most importantly, wherever we saw
more so. And now, this complexity exists within a challenges, we also saw hope. Difficult economic times can
more uncertain and economically challenging world. also bring creative solutions that reduce waste. Concerns
Successfully navigating this terrain requires understanding over privacy and security can be addressed to deliver
which trends can transform these challenges convenient and personalised services. And whilst technology
into opportunities. can create environmental problems (such as the high power
usage of some AI algorithms), technology can also provide
We firmly believe that the trends covered in the chapters of some of the solutions as well (such as replacing physical
this report pass this test, and Figure 38 provides a concise travel with virtual meetings).
summary of the key questions we believe every organisation
should be asking themselves today.
As we have explored, researched and discussed each of

“Wherever we saw
these topics, we have reached three overriding conclusions: challenges, we also
Firstly, the world (including the world of payments) is
changing rapidly. Trends that seemed speculative two years’
saw hope.”
ago (such as CBDCs) are now becoming tangible realities.
As a global leader in payments, understanding these trends
Secondly, the role of digital payments in society is stronger and taking action to address them is a core part of our
than ever. Digital payments have brought substantial benefits. day-to-day business. We combine this with a passion for
But their increasingly critical nature to how society operates finding innovative ways to assist our clients in navigating this
brings with it responsibility: for accessibility, inclusion, complex terrain towards success. We are there to help you
resilience, trust and efficiency. reuse, reinvent, and regrow.
Rapid change in the

world of payments.
Speculative trends
quickly becoming Digital payments are
concrete realities. critical for society.
Critical nature of
payments brings with
it responsability for
accessibility, inclusion,
resilience and trust.
Hope through
creative solutions to
tough challenges.
Protecting the environment,

reducing waste and safeguarding
privacy and security.

Conclusion
Foundations of Trust.
In a cashless world, • How can access to cash be maintained whilst minimising the costs?
who gets left behind? • How can digital payments be made fully accessible, affordable
and inclusive?
Is it time for a new • How can resilience be used as a long-term enabler for
resilience paradigm competitive advantage?
in payments? • When should you cooperate with other industry players
vs. seeking unique, innovative solutions of your own?
Can digital identification • What will your role be in the digital identity ecosystem?
enable seamless, secure and • How could widespread digital identity enable you to provide
borderless digital services? more simplicity and convenience to your customers?
Could digital assets be the • How could the world of digital assets impact your business?
final puzzle piece for a new • How could your industry benefit from the efficiency and transparency
digital world order? of fully digitised asset transfer?
New World
of Payments.
Will we see the end • How could you become a trusted marketplace for second-
of buying and owning hand goods?
new products? • How could you embrace business models based on subscription
and rental?
What solutions can help • What technology solutions do your future consumers expect?
the small merchant thrive? • Can you leverage government initiatives that are accelerating growth
solutions for small merchants?
How will we pay • How can you enter the metaverse in a way that makes sense
in the metaverse? for your business?
• Are you prepared for how payments will work in the metaverse,
potentially including stablecoins and micropayments?
What are the major • What ways can you find to use generative AI to boost efficiency
threats and opportunities by assisting humans?
of generative AI • Could generative AI play a more transformative role in the products
in payments? and services you offer?
Towards open payment • How will open payment frameworks impact your business, whether
ecosystems? as an ecosystem platform, merchant or payment service provider?
Figure 38: Key questions facing organisations.

SECTION I TITLE
Acknowledgements.
This report was prepared by the Worldline Discovery Hub:
Antonio Bobby Charlotte Clement Colombe Dalila

Soares Rohrkemper Pasqual Jozwiak Hérault Hattab
Gina Guillaume Jerome Jie Johan Jonathan

Tholl Lefebvre Goblet Xue Maes Sauer
Nicolas Olivier Peter Santi Sebastian Sezin

Kozakiewicz Maas Timmermans Ristol Ramatowski Suer
We are also grateful to:

Christophe Duquenne, Gilles Grapinet,
Maëlle Lafont de Sentenac, Marc-Henri Desportes,
Pierre-Emmanuel Degermann and Wolf Kunisch
who all provided valuable insights and feedback
during the preparation of this report.
Graphics and layout:

Worldline PLUS Agency with special thanks to
Christine, Isabelle, Marianne and Marie.
Sources:
All infographics provided by Worldline Discovery Hub
except those indicated otherwise.

Acknowledgements
SECTION I TITLE
Damien David David Denis Frederic Giel

Cramer Daly Karney Faivre Vieren Leyssens
Laurent Lucy Maciej Makis Michaela Minh

Rousée Whitehead Olejniczak Malioris Stulikova Le
Sharan Sunil Thomas Urs Yacine

Shah Rongala Hoberg Gubser Kessaci
About the Worldline Discovery Hub
The Worldline Discovery Hub is here to help you stay ahead of the curve in a payments industry that is rapidly
changing in innovative and disruptive ways. We identify key industry trends to provide our customers with the
knowledge and insights to thrive in the payments landscape of the future with bold and innovative solutions.
Personally chaired by Worldline’s CEO and Deputy CEO, the Discovery Hub connects a diverse range of
payments experts from across Worldline and is dedicated to driving innovation and thought leadership through
cross-fertilising ideas and out-of-the-box thinking. What members of the Worldline Discovery Hub all have in
common is an innovative, free-thinking, and curious mindset and a commitment to investigating trends and
sharing insights with our customers.

About Worldline
Worldline [Euronext: WLN] helps
businesses of all shapes and sizes
to accelerate their growth journey –
quickly, simply, and securely. With
advanced payments technology, local
expertise and solutions customised for
hundreds of markets and industries,
Worldline powers the growth of over
one million businesses around the
world. Worldline generated a 4.4 billion
euros revenue in 2022. worldline.com
Read our 2022 Integrated Report
Corporate purpose
Worldline’s corporate purpose

(“raison d’être”) is to design and
operate leading digital payment
and transactional solutions that
enable sustainable economic growth
and reinforce trust and security
in our societies. Worldline makes
them environmentally friendly,
widely accessible, and supports
social transformation.
For further information

WL-marketing@worldline.com
Worldline is a registered trademark

of Worldline SA. October 2023
© 2023 Worldline.

Navigating Digital Payments Brochure Web 2023

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Navigating Digital Payments Brochure Web 2023

Uploaded by

Copyright:

Available Formats

2nd Edition I 2023-2025

2 Navigating Digital Payments I 2nd Edition I 2023-2025

Navigating Digital Payments I 2nd Edition I 2023-2025 3

4 Navigating Digital Payments I 2nd Edition I 2023-2025

The payments industry stands as a However, to foster closer integration

Navigating Digital Payments I 2nd Edition I 2023-2025 5

6 Navigating Digital Payments I 2nd Edition I 2023-2025

A glimpse into the future.

“I’d like to book a holiday,” you say.

After a bit more discussion, your

A few weeks later, you decide to visit

Navigating Digital Payments I 2nd Edition I 2023-2025 7

Reuse. Reinvent. Regrow.

Trends requiring action today

We have focussed on these trends because we believe they will be particularly

8 Navigating Digital Payments

Never miss an important payment innovation!

Navigating this report.

Navigating Digital Payments I 2nd Edition I 2023-2025 11

Reuse Reinvent Regrow

Reuse to reduce Reinventing how Growing revenues

Existing trends t hat continue Newly significant

Figure 1: Trends shaping the payments world.

12 Navigating Digital Payments I 2nd Edition I 2023-2025

Firstly, there is a new sense

Less dramatically, but just as Generative AI Reinvent

Navigating Digital Payments I 2nd Edition I 2023-2025 13

Small Merchants Page 45 Generative AI

Hyper-Resilience Digital Identity

Figure 2: Critical questions the payments industry must face.

14 Navigating Digital Payments I 2nd Edition I 2023-2025

headset. Potentially this will be a new

Navigating Digital Payments I 2nd Edition I 2023-2025 15

16 Navigating Digital Payments I 2nd Edition I 2023-2025

Hyper-Resilience Digital Identity

Navigating Digital Payments I 2nd Edition I 2023-2025 17

Reuse Reinvent Regrow

Companies can How people There is a correlation

Emerging markets Advanced economies

Share of cash in total transactions by volume: 2020 2023

Figure 3: The decline of cash.

18 Navigating Digital Payments I 2nd Edition I 2023-2025

Figure 4: Social segments which are more prone to financial exclusion.

Navigating Digital Payments I 2nd Edition I 2023-2025 19

Digital financial inclusion in

countries with Low digital

20 Navigating Digital Payments I 2nd Edition I 2023-2025

The unbanked challenge

Figure 7 illustrates that financial services are typically easier

In the short term, maintaining access to cash will be

However, the cost of providing this access to cash needs

It is likely that this combined need to maintain access

Navigating Digital Payments I 2nd Edition I 2023-2025 21

In a cashless world, who gets left behind?

Changes Challenges Choices

22 Navigating Digital Payments I 2nd Edition I 2023-2025

Reuse Reinvent Regrow

As an industry The accelerated A new resilience

The payments industry must be prepared to adapt to new and

The ubiquity and interconnectedness of

Navigating Digital Payments I 2nd Edition I 2023-2025 23

Payment industry � Facilitate home

Technology Financial � Cooperate As depicted in Figure 10, we suggest

Here we include redundant backup