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August 6, 2020

The global payments landscape has been navigating through difficult times and the challenges have been compounded by drastic uncertainties unleashed by the COVID-19 pandemic. With increased focus on digital payment platforms, financial services firms must plan their responses carefully and effectively manage the outcomes in the post-pandemic era to be able to deliver seamless services in the payments space. Clearly, as the new world order emerges, the swiftest response would be to further digitalize monetary transactions, which means deeper adoption of digital technologies in the payments space, underpinned by continuous intelligence.

Aiming for Fully-Realized Digital Payments

From the consumer perspective, financial transactions have seen an upward swing with significant growth of domestic and cross-border e-commerce. With the spend traffic shifting more toward remote and digital payments, the increased adoption of digital payments paves the way for further innovation through open banking and real-time payments.

From the enterprise perspective, given the asymmetrical nature of cross-border trade, the impact has been both positive and negative. Payments and cash management activities have largely moved to digital channels which depicts accelerated digitalization – definitely, a positive; however, corporate payment managers continue to be challenged by siloed, inconsistent, and fragmented data, indicating that a lot more work needs to accomplished to realize a fully digital state.

As for payment services providers (PSPs), it has become clear that merely addressing the payment needs of their clients will bring in no value or revenues considering that payments have now become a commodity. PSPs must realize that digital giants are challenging traditional fintechs with unique, tailored propositions to consumers that are simple to use, frictionless, tailored, cost-effective, and bundled with offerings from other ecosystem players.

Preparing for the Journey Ahead

There are three stages of planning, preparation, and execution of the renewed payments strategy as the payments organization navigates from the current state through to the target; these are:

Respond – This is the stage that payment organizations are currently in, addressing the immediate needs of end users and ensuring continued availability of services. Given that the payments industry was already on the digital course and has been investing in remote and digital payment solutions for over a decade now, firms have been able to respond well to the situation at hand – the COVID-19 crisis – without having to introduce new capabilities or offerings.

Renovate – As the industry is still navigating through turbulent times, payment services organizations (PSOs) must look at the opportunity presented by open banking, open data, intelligence, and real-time payments as these will be the tenets of success for the payments enterprise of the future. Open banking presents innumerable opportunities to provide unbundled products featuring tailored payment services and new opportunities for blending services and products from partners (ecosystem play). To this end, payment service organizations must relook at their underlying platforms, partner connections, and data to build a business architecture that is scalable, resilient, and adaptable to the ever-changing business climate.

Re-engage – Payment service organizations must exploit the investments made in the renovate phase to re-engage with the clients through bundled or unbundled propositions created through contextual interactions and services and products sourced from partners who are part of the ecosystem. The build out of the business ecosystems is a continuous process, with PSOs needing to lay continued emphasis on the viability of the current propositions and designing new propositions which will be required as customer payment behavior is mined.


The payments industry has been investing very heavily in simplifying usage experience and opening up the platforms to third parties and new entrants. As PSOs exit from the state of business continuity, preparing and planning for the new ground reality to play to the world of digital payments will require efficient, intelligent, and leaner payment architectures, coupled with the network of economic connections that make up the ecosystem, which can cater to the diversified payments experiences. This is a perfect opportunity for PSOs to reset the engagement with the clients, and re-engage with better value propositions through better platforms, products, processes, and blended or unbundled services. The combination of the platforms, processes, people, data, and partners; and continued attention to revisit value propositions to meet the customer and the market appetite will go a long way in preparing for a resilient, adaptable, and purpose-driven environment for the future.

Chandra Shekaran is a senior consultant with the Cards and Payments practice of TCS’ Banking, Financial Services, and Insurance (BFSI) business unit. He has over two decades of experience in implementing retail and wholesale payment systems for a host of firms ranging from card issuers, acquirers, and remittance players to regional and international networks and wholesale payment firms. Shekaran's areas of expertise include core transaction processing and risk management platforms, and he anchors strategic consulting and transformation programs for TCS' leading clients.


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