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What’s next in payments? – HEXAWARE SPONSOR CONTENT


By Swati Dublish, Rajsekar Jayashankar and Navin Mishra

The payments space is changing rapidly, with the arrival of new players beyond banks and financial services institutions. These competitors are disrupting the status quo and shifting payments from the realm of remittances and remittances to innovative concepts such as buy it now, pay later (BNPL) and open payments.

As customer expectations have risen, people expect their payment providers to “the art of the possible” and traditional players need to rethink their strategy to retain their position and customer loyalty, lest they become irrelevant. All stakeholders within the payments ecosystem must align with the broader themes that are emerging now and in the near future.

We live in a world of artificial intelligence (AI), machine learning (ML) and the cloud, a world of “payments as an experience (PaaX).

The key themes of the payment of the future—cryptocurrency, central bank digital currency (CBDC), financial inclusion, and integrated financing—represent the steps in the future evolution of payments that your bank should be ready for.

Based on its current relevance and growing adoption, the starting point for the future of payments is cryptocurrency – any form of money that exists digitally or virtually and uses cryptography to secure transactions.

The rise of cryptocurrencies is full of challenges such as ucertain regulatory status, lack of awareness, security, scalability, and misuse of virtual currency. The challenges of crypto and the need for regulated alternatives call for an evolution of the CBDC, a phase we define as “payments as a lifestyle (Paal).”

Banks will issue CBDC as legal tender, just like cash today. But unlike bank deposits, the CBDC would represent a claim on the central bank.

The current state of financial infrastructure will determine the speed and extent of CBDC adoption. Key concerns with CBDC include privacy in individual transactions, retail CBDC (consumer accounts) as a new feature of central banks, the use of an offline CBDC, and cybersecurity risks.

In the medium term, through the CBDC, financial inclusion will play the most important role in making payments the backbone of economies around the world. Financial inclusion refers to the inclusion of the unbanked segments into the financial ecosystem. Key barriers to financial inclusion include financial literacy, lack of private sector willingness and ability to engage, lack of access to smartphones, and unsatisfactory anti-money laundering controls.

Financial inclusion will in turn contribute to integrated finance the future of banking— with the bank reaching customers where they need them and not the other way around, a phase that we define as “invisible payments”.

Integrated finance is the integration of financial services, including lending, payment processing, or insurance, with the infrastructure of non-financial businesses without the need to redirect them to traditional financial institutions. The integrated funding opportunity for banks involves rapid customer and deposit acquisition, growth in fee income through partnership agreements, and reduction in customer acquisition and unit processing costs.

Technology will be key to propelling banks into the new realm, where payments will no longer be exclusive but will be democratized as a service. For your bank to remain relevant and to sustain your payment activity, your bank must:

  • Look at your technology. Banks need to start preparing for the impact these new means of payment will have on digital banking integration, security, channels and platforms. Banks should align digital payments and digital banking modernization initiatives to repurpose digital banking applications and solutions to support this transition.
  • Evaluate your role. Fintech products and services will be essential tools for fostering inclusion in the financial systems of the future, helping communities around the world build long-term economic resilience and enabling financial growth. Banks will play a major role in driving this change.
  • Seize your opportunity. Integrated financing will help banks reach more customers with lower acquisition costs, expand distribution channels and develop new value-added services, creating unprecedented opportunities for scale.

The future of payments reimagined

The era of payments as a product is already over, as banks approach a shift in consumer expectations. The payments journey is likely to go through a three-generation transformation.

Gen One: Payments as an Experience (PaaX)

The world of payments is about to transform, with a focus on improving the end-user experience through improved interfaces and smoother transitions. Banks and fintechs are using the power of AI, ML and the cloud to enable Gen One. This experience is commonly called frictionless payments.

Gen Two: Payments as a Way of Life (PaaL)

As the current experience stabilizes and wearable technology becomes the norm, payments will become part of the lifestyle for individuals and businesses, ushering in the next era. The rise of state-owned crypto could become the singular strength of seamless operations for domestic and cross-border payments.

Generation 3: Invisible Payments

Over the next three to five years, payments will be instrumental, not only as a pervasive feature, but also working seamlessly behind the scenes. The monetization of payment transactions will ensure that payments are financially inclusive and integrated into the broader commerce transaction ecosystem.

Generational change


The company is committed to a shift in experience, value creation and a better quality of life. Payments will drive this transformed experience for a large segment of the population during these three generational shifts.


Hexaware banking solutions include amaze®, a cloud enablement platform; Tensai, a automation platform; and HARVISa banking virtual laboratory and an incubator. Learn more about the the future of payments and how Hexaware can help banks and financial institutions keep pace with an ever-changing industry.


Swati Dublish is a banker driving business transformation through technology for banks and fintechs at Hexaware Technologies. Rajsekar Jayashankar is a banker, researcher and commodity banking product specialist at Hexaware Technologies. Navin Mishra is a Public Sector Financial Services Strategist at Hexaware Technologies.

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