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BNPL funding grew 93% CAGR as volumes, users and revenues surged in 2020

The rapid transformation of domestic and cross-border payments brings new opportunities and challenges for financial institutions.Amid shrinking payment margins, players are rethinking their business models to better monetise data insights and integrate financing options such as “buy now, pay later” (BNPL). Industry experts share their views on the impact of this changing landscape, emerging value propositions, and key technology enablers for future growth

March 31, 2021 | Neeti Aggarwal
  • From technology and commercial perspective, payment is no longer a revenue game for banks
  • With the reduced margins there is a need to look at more creative areas to identify revenue opportunities
  • To be successful, institutions need to innovate the technology infrastructure, improve agility and cost efficiency, and adopt strategies and models that can deliver future value

The payments ecosystem has shifted dramatically towards instant and frictionless payments. Asia Pacific region witnessed a spurt in digital wallets, mobile payments, e-commerce transactions and digital ecosystems. Several countries in the region developed national real-time payment infrastructures harnessing the growing adoption of smartphones, digital IDs and quick response (QR) codes. Developments in the Society for Worldwide Interbank Financial Telecommunications global payments innovation (SWIFT gpi) and ISO 20022 added to the transparency and speed in cross-border payments. Meanwhile, the events of 2020 proved to be a catalyst that accelerated digitisation and contactless payments.

As consumer expectations evolve, institutions are forced to rapidly upgrade the fragmented legacy systems and data architectures. Wider payment services through open banking framework and digital ecosystem offer new customer engagement opportunities. Shrinking payment margins and revenues drive institutions to explore incremental income streams, monetise data insights to expand customer offerings and explore embedded financing options such as buy now, pay later (BNPL) and supply chain financing. The BNPL model is poised for exponential growth as volumes surge and new fintechs and institutions expand their market reach.

Real-time payments and digital volumes grow multifold

Fintech and tech players gained market share with their propositions in ...

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Keywords:Cross-Border Payments, Frictionless Payments, Digital Wallets, E-Commerce, Digital Id, QR Code, SWIFT Gpi, Data, Open Banking, BNPL, C2B, P2P, API, CBDC