At the cutting edge of payment simplification

In recent years, the digital payments landscape has witnessed remarkable innovation, and the pace of change is expected to increase, driven by the rapid evolution of our economic environment.

At the Mastercard EDGE forum, we explored how emerging technologies are shaping the future of payments. The event brought together acquirers, payment service providers (PSPs), merchants, financial institutions and government bodies as well as crypto and PayTech innovators under the common goal of advancing the payment ecosystem.

We all agreed that the potential of the next generation of the digital economy is vast – from the implementation of the token economy to the impact of AI in PayTech and data monetization on the bottom line.

One of the key challenges that digital commerce has been facing is the catch-22 around security versus experience: If you want to make transactions more secure, the user experience is often sacrificed, and vice versa. This problem has been addressed with tokenization that allows us to optimize security and the experience of transacting at the same time. Tokenization is poised to extend beyond payments, influencing areas like data and identity.

As digitization generates huge amount of data, this needs processing, contextualization, interpretation and insight generation – all in real time. This is where we at Mastercard are leveraging AI to simplify the complex, making commerce easier for consumers and merchants.

These days, short-term trends have a reduced impact on digital commerce because it’s witnessing a significant secular shift. More people, more businesses, more industries than ever before are transforming the way they work with digitization.

Historically, however, one of the main obstacles was the acceptance infrastructure for different merchant segments. Because while digital payments are mainstream for larger organizations, we needed to bring smaller merchants into the digital economy without them requiring a huge initial cost outlay or access to major infrastructure. We needed solutions that were low-cost, simple and accessible to consumers. And what’s simpler than using your phone – for acceptance as well as payments? Solutions like Tap on Phone and QR payments are already proving to be game changers in bringing these merchants into the digital economy.

With the electronification of payment flows starting in developing economies, improvements in financial inclusion are following. And with embedded payments expanding new business models, we’re seeing growth in the gig, subscription, marketplace and creator economies.

However, if their partners and customers are not digitized, merchants don’t see the value. That’s why at Mastercard, we are digitizing the entire supply chain. We are evolving our Mastercard Gateway to serve as a single point of connectivity for thousands of acquirers.

The world is filled with complexities, and the future belongs to those who can constantly reimagine – and simplify – digital commerce.