Digital payments are becoming the norm as customers increasingly rely on digital services and conduct transactions online rather than with physical cards or cash. Key trends include the growth of peer-to-peer and business-to-business digital payments, tokenization standards, smart point-of-sale devices, and passive contactless payments. Payment providers face both opportunities and threats from new digital technologies and entrants, and must transform their organizations, technologies, and business models to keep up with rapidly changing customer expectations and remain competitive in the digital landscape.

1. Disruptive forces in digital payments
How can payment organizations be future-ready?

2. The need for change
With the mass adoption of ubiquitous connected devices, customers have become increasingly reliant on digital services
Mobile and digital payments have become the core innovation strategy of any payments organization
Payments providers are aware that digital is a must-have, but they are unsure of how to address the transformation challenge
Customers have progressed from using cash and physical
cards to making transactions over digital platforms
m-commerce has risen to power: Customers research digital
channels and shop online instead of visiting a physical store
2

3. Key trends in digital payments
3
P2P and B2B payments going digital
The war against paper (cash and check) is on.
In the P2P space, paym, venmo etc. are
gaining traction, while in the B2B space,
procure-to-pay electrification is garnering
support
Tokenization Standards
All card networks have agreed to
use uniform tokenization standards
Smart POS
Smart POS recognizes your online
searches and suggests purchases with
instant offers
Passive Payments
Payments that happen instantly and
invisibly. The checkout process is
becoming fast and frictionless,
reducing shopping cart abandonment
Crypto currencies now
mainstream
Australian Commonwealth Bank is
experimenting with Ripple. A lot of
bitcoin remittance and blockchain
service companies are coming up

4. Digital touchpoints – journey of a digital consumer
4
Remote
store
Near
store
Near
PoS
• Passive payments – In-app /
traditional e-commerce quick
checkouts
• Social-analytics-led recommendations
• Personalized loyalty-based offers
• Advertising networks and targeted
offers
• Gamification
• Location-based offers – Geo-
fencing, Beacons, check-ins
• Order ahead (Pick up in-store /
drive-through)
• Smart PoS – instant offers based
on profile targeting
• In-aisle self-service, checkout-
scan and pay
• Wearable and mobile
Purchase
intent
Purchase
trigger
Purchase
closure

5. Going digital – SWOT for FIs and payments companies
5
•Partnership with
technology startups
•API-fication of
services
•Pricing transparency
by startups
•Low margins by new
players
•Legacy architecture –
tight coupling makes
change complicated
•High cost overhead
compared to startups
•Regulations compliance
takes huge budget
•Established
customer trust
•Customer data for
analytics
STRENGTH WEAKNESS
OPPORTUNITYTHREAT
Customer expectations are
different
Cost of production and time
to market has reduced
Facing newfound
competition from
technology startups

6. Before you begin: Pre-requisites
Initiate user-oriented innovation processes
Choose the target market – Red ocean vs. blue ocean
strategy
Build an adaptive architecture
5

7. Chalk out a roadmap
7
1
2
3
The starting point should be to shortlist the most
critical user journeys. The payments provider
needs to identify the critical line of business – the
one that defines the product
Design the development and implementation in a
micro-managed phase-wise manner. Adoption of
methodologies like Agile would be a good fit
The analysis should move from user journey to
products. Need to revisit users’ journeys and apply
digital improvements wherever possible
Step 1: User journey to product
Step 2: Micro managed and
flexible
Step 3: Identify critical LOB

8. Address change at all levels
8
Organisation
Technology
Market
• Clear and well-communicated change mandate
• Involve all CXO offices so that leadership and
sponsorship are aligned
• Buy-and-build over buy-or-build: Buy the market leading
solutions and then customize
• Open APIs to third parties – allow greater integration with
retail apps and open new customer end-points
• Mass adoption: Focus on simple, high-volume processes
first to promote mass adoption
• Be prepared for cannibalization: New digital services will
shrink existing revenue from legacy offerings

9. Final thoughts
9
Digital is a
culture change
Iterate and
improve
Look outside
and learn

10. © 2015 Infosys Limited, Bangalore, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change
without notice. Infosys acknowledges the proprietary rights of other companies to the trademarks, product names and such other intellectual property rights mentioned in this document. Except
as expressly permitted, neither this documentation nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, printing,
photocopying,recording or otherwise, withoutthe prior permission of Infosys Limited and/ or any named intellectual property rights holders under this document.
Thank you