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#Payment Technology

Transforming the payment value chain

Global Trends
6 Mins.

Remaining competitive in a world of fintechs, fast-paced technology developments, and changing consumer demands is no easy task. Yet alongside the challenges, opportunities can be found. We take a look at how banks can adapt and develop to create a path for transformation

Faced with stiff competition from agile fintechs, commercial banks are having to adapt and transform to meet customer expectations and ensure future viability. In late 2021, several leading payment experts exchanged their views on the challenges and opportunities in payment at a virtual event hosted by G+D. Can payment providers benefit from today’s fast-paced environment? What needs to be done? And where should the focus lie?

Dr. Andrej Vckovski, CEO at Netcetera, strategic partner of G+D, moderated the lively panel, which featured discussions on challenges in the industry, the ways commercial banks can improve customer experience, and how best to leverage data to ensure business success.

Challenges and opportunities in the payment value chain

There are many hurdles to overcome in payment, but technology and transformation are also creating opportunities for commercial banks. Kilian Thalhammer, Managing Director & Head of Merchant Solutions, CB – Corporate Bank Central / CIB Global Banking, Deutsche Bank AG, notes the importance of convenience: payment needs to be as simple as possible for the customer.


Harald Flatscher, Managing Director at PSA Payment Services Austria, agrees: “The expectations of the consumer change, but of course payment must remain easy. Consumers don’t care about technical standards, but it must work wherever they are, 24/7. That’s something that must be achieved by the entire payment industry.” It’s not as simple as it sounds: the fast pace of everyday life means that customer expectations have changed, and continue to change. Flatscher says that “standing still means you’re out of business in no time.”

Thalhammer explains: “Everything is moving fast – consumers are moving fast, and trends are moving fast. The payment industry is now 20–25 years old, and has generated a lot of legacy in the past that makes it difficult for us to move fast. And that’s a challenge for all of the players.”

Legacy systems are indeed an issue. Few people fully understand the systems behind incumbent banks, systems that have been pieced together over decades. Trying to keep pace with dynamic fintechs can cause headaches.

Yet Jukka Yliuntinen, Head of Digital Payment Solutions, G+D, sees the need for rapid digitalization as both a challenge and an opportunity: “It’s happening so fast,” he notes, that it cannot be avoided. It’s a chance for banks to develop, upgrade, and adapt, and a chance to respond to customer demands with innovation and cutting-edge solutions.

By implementing solutions such as frictionless payment, for example, payment is made convenient, and much more secure. India is already reaping the benefits of tokenization, with impressive digital payments growth, and with central banks inching closer to issuing CBDCs, digital payment is set to become much more customer-friendly.

A customer focus

A man sits in front of his laptop and operates a smartphone. In the other hand he holds a credit card

Yliuntinen sees fragmentation as another current challenge. Banks’ customer bases are increasingly fragmented, with generational gaps and target groups “that have different needs.” Moreover, payment types are fragmented too: cryptocurrencies and a range of payment methods mean that a lot is happening in the payment ecosystem, and solutions are needed that focus on the customer.

Flatscher sees opportunity in fragmentation: “Maybe interfaces change, maybe payment locations change, but it’s possible to build stable rails. Having highly scalable, very reliable, interoperable, and basic payment systems will be very relevant, and then you need very flexible interfaces to address them.”

Improving the customer experience

The need for customer-oriented solutions is clear. Yet what can banks do to improve the customer experience?


All agree that connection to the customer is important. There’s a need for regular interactions, and the use of data to understand how to communicate and engage with customers better. Customer touchpoints remain key, with simple and convenient digital solutions that embrace a phygital experience.

Besides regular contact with customers, Yliuntinen believes that banks need to embrace innovation to make customers’ lives easier. There is a need to create better products that are easy-to-use and future-proof, with standardization, he says: “In the payment space there are de facto standards, and if you follow those you have interoperability, which usually means scalability.” A phygital approach that combines simple digital experiences with secure in-person solutions can make for a better user experience.

Secure systems: An expected part of payment

Nowadays, security is no longer a novel benefit in payment – secure solutions are not something banks can use to advertise with. It’s now expected of payment providers as standard. And this is what is key: understanding what the customer wants, and understanding just how to go above and beyond.


Change is the law of life, as John F. Kennedy said. Opportunities are abundant, but it’s important that the available resources are accessed and that technology is embraced. By leveraging data to understand fragmented customer bases, customers can be better targeted. And this is the crux of the matter: understanding customer needs and wants, while remaining ever-visible, will help ensure banks’ long-term success.

Published: 10/02/2022

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