Posted: 27/09/2024 | Read time: 4 minutes
In this blog, we explore the key trends shaping the future of payments, drawing insights from Capgemini’s world’s payment report 2025 and global payment sales manager, Nick Botha.
The payments industry is ever evolving. With technological advancements, regulatory changes and shifting customer demands, what does the future of payments look like?
In a recent discussion with AutoRek’s new strategic partner, Capgemini, global payment sales manager, Nick Botha outlined the key trends shaping the future of payments.
The growing role of data
One of the most significant challenges in the payments industry today is data utilisation.
Many organisations struggle with data interoperability, infrastructure limitations, and understanding the potential of available data.
So “educating firms on data usage and implementing innovative technologies like AI and machine learning could greatly enhance data sharing, security and reconciliation processes,” Nick explains.
This is because “AI can streamline the reconciliation process by extracting relevant data fields, reducing complexity and operational costs. So, in the long term, organisations will begin to see an increase in their margins.”
The transition to ISO 20022
The transition to ISO 20022 is transforming the future of financial messaging and cross-border payments.
However, ISO 20022, presents both opportunities and challenges for payment firms.
As Nick notes, “there is a misconception that ISO 20022 will simplify reconciliations. However, it actually introduces more data to manage.”
Therefore, “effective implementation requires robust infrastructure and consistent processes. External vendors must also be interoperable and scalable. Only then can the real benefits of ISO 20022 be experienced.”
As the report emphasises “industry initiatives like ISO 20022 and Swift GPI are streamlining digital domestic and cross border transactions, making them faster, cheaper and more transparent.”
So, “automating reconciliations with ISO 20022, can optimise matching processes, reduce costs, and boost profitability,” provided organisations invest in scalable technology and interoperable systems, Nick explains.
Instant payments
The concept of “virtual accounts offers the illusion of instant payments, but true settlement is often delayed.” For accurate reporting and client satisfaction, reconciliations must evolve to match payments in real-time, Nick notes.
Capgemini’s world payments report 2025, reveals how “inefficient cash management, including poor forecasting and lack of visibility, costs businesses nearly 7% of revenue annually, translating to billions of dollars in trapped liquidity.”
However, “instant payments and open finance can revolutionise accounts payable and receivable processes, providing real-time cash visibility and driving operational efficiencies.”
Therefore, “to thrive in the evolving landscape, pacesetters will embrace open finance and instant payments […] to create innovative value propositions that meet the changing needs of customers and businesses,” the report uncovers.
Open banking and API challenges
Open banking has paved the way for financial institutions and external parties to interact more seamlessly, but “corporate banking APIs still lag behind those in retail,” Nick comments.
This is because while “corporate banking APIs are becoming more available, greater global presence and coverage are needed for reconciliation as a service to be more widespread.”
The report highlights the importance of open banking in the payments space, stating how “open banking’s impact is undeniable” as it:
- Empowers the creation and sale of new data-driven financial services
- Leads to better customer experiences
- Simplifies and modernises traditional banking processes
However, open banking also has its challenges. As the report highlights, challenges include:
- Non-standardised APIs
- Little control over data use and sharing
- The lack of incentives to share bank data with third parties
So, there is further work to be done to bridge the gap between the challenges and benefits of open banking.
The future: a unified approach to technology and collaboration
No single technology will revolutionise the payments landscape.
Instead, the integration of solutions and technologies will be key to unlocking new efficiencies.
Thus, effective use of data and technologies, along with a unified regulatory framework across governments will shape the future of payments.
Where does AutoRek fit into the payments landscape?
Capgemini’s payments report uncovers insightful statistics that evidence why AutoRek has seen so much success in the payments sector.
- Over 80% of firms across insurance, retail and automotive payments sectors rely on manual processes for reconciliations, resulting in almost 7% of corporate revenues being tied up within the value chain.
- Automating reconciliations ranks as the most important priority for PSPs and corporates, and in turn, is one of the highest priorities for budget allocation across these firms.
- Complex billing cycles and managing a high volume of invoices lead to bottlenecks and delays. These issues are further amplified
- Almost 70% of senior executives have blamed poor data quality as a cause of the bottlenecks caused by manual processes for account reconciliation. This proves that data management is an integral part of the end-to-end reconciliation process.
- New technologies are emerging which is increasing the demand for firms to facilitate real time payments, not just domestically, but cross border too.
- Manual reconciliations are time consuming, error prone and have the potential to cause payment delays.
At AutoRek, we’re in a strong position to drive this change. With over 30 years of experience, we’re working alongside some of the world’s largest payment institutions to enhance reconciliation processes and support real-time money movement globally.