ebook, research

insights by IDC

EMPOWERING NEW
BUSINESS INNOVATION
WITH PAYMENTS
How businesses are using payments to enhance customer
experiences and open new markets

Nuvei in partnership with Edgar, Dunn & Company | May 2023

Executive summary
2023 marks the arrival of the
connected payments era,
characterized by the emergence of
innovative payment types, cutting-
edge payment infrastructure, and novel
business models stemming from the
interconnected payment ecosystem.
The research in this InfoBrief provides
insights from in-depth interviews with
10 industry leaders representing large
global companies and fast-growing
tech players worldwide. These
interviews delve into perspectives on
the era of connected payments and
how organizations navigate challenges
within the rapidly evolving payments
landscape.
Forward-thinking organizations in
2023 have recognized the strategic
significance of payments, elevating
it to a key pillar in their overall
business strategy and long-term plans.
Payment is no longer viewed solely
as a transactional function but as a
critical revenue accelerator and a
cost-reduction opportunity. Failing to
acknowledge the substantial impact
of payments may cause businesses to
lag behind industry leaders who have
embraced payments as a strategic
priority.
Large and fast-growing organizations
require scalability and flexibility in their
payment stacks. This is often achieved
by utilizing multiple payment providers,
allowing businesses to access best-
in-class solutions in different regions
and segments in which they operate.
These organizations can then focus on
orchestrating their payment stacks to
deliver maximum value.
The rapid emergence of new
payment methods presents significant
opportunities for businesses to
capitalize on. The interviews
conducted by IDC reveal that activating
new payment channels such as BNPL
(buy now pay later) can yield a monthly
revenue increase of up to 32%.
The complexity of new payment types
across regions and the multitude of
players in the ecosystem highlight
the importance of a holistic vision of
payment flows and orchestration of the
payment stacks for success.
Innovative businesses recognize
payments as a crucial element of
the overall customer experience
rather than an isolated function.
They continually seek ways to
optimize payment experiences to
enhance revenue generation and
mitigate losses from fees and fraud.
These companies require strategic
partnerships and scalable solutions
that adapt to their evolving needs and
continually optimize payment flows to
achieve their goals.
Despite advancements in payment
technologies, significant opportunities
for revenue generation and cost
savings within the payments space still
exist. Companies with a progressive
mindset can capitalize on these
opportunities by leveraging technology
to achieve their goals. By staying
ahead of the curve and embracing
innovative payment technologies,
businesses can unlock new revenue
streams and achieve operational
efficiency, ultimately driving overall
business success in the dynamic
payments landscape.
2
Innovative payments models
driving transformation

The payments ecosystem has evolved The development of payment technology

rapidly in the past few years, leading to
new payment types and infrastructure
advancements. However, the Card era Internet era Connected
payments era
requirements for payment technology
have also shifted. To thrive in the

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1970s to 2000s 2000s to 2020 2020 and beyond

m
ra
ef
connected payments era, businesses
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r
Mobile wallets, online Real-time payments, BNPL, embedded
fo
need flexible payment capabilities that
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ne Credit and debit cards payments payments, CBDCs, cryptocurrency
sig

enable growth and empower them to

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seize new opportunities.

on

Built to process physical cards Built to process online Built to drive payment connectivity
si
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domestically and internationally payments globally across global platforms

bi ive

Limited integrative capability:

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pa rat

Fluid integration at platform level,

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Single platform integrative capability

ca teg

Separate channels and rails used for

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for various global payments channel and brand agnostic

different payments
bi ion

Generally performed with additional Automated and integrated

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Performed manually
ca estr

applications and some manual workload orchestration capabilities

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Local servers Local servers, private cloud

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Private and public cloud

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Limited Flexible scalability Dynamic scalability

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The first generation of payment technology
focused on processing physical credit
card transactions and prioritized the
establishment of robust connections
between physical locations.
But this generation’s hardware-centric
approach limited integrative capabilities,
orchestration, and scalability.
The surge in ecommerce drove the advent
of the internet era in payments. This led to
the growing range of payment types, such
as mobile wallets, and offered the capability
to integrate multiple payment options onto a
unified platform swiftly.
Moreover, it facilitated seamless integration
with existing systems, ensuring a
streamlined and comprehensive payment
experience.
The most recent payment innovations
cater to digitally native payments on new
infrastructure, including real-time payments,
BNPL, and embedded finance. This era
emphasizes the need for flexible and
scalable platforms that enable payments-as-
a-service capabilities to extend outward.
These platforms seamlessly integrate
payment channels and other payment
platforms, allowing for smooth orchestration
through a single connection.

3
Navigating payment innovation:
Regional perspective and global trends
Diversity characterizes the payments
landscape in various regions and
markets. This diversity is seen in
regulatory environments, consumer
preferences, and payment trends.
Businesses must understand these
factors to thrive and meet customers’
expectations for exceptional digital
services. While each region presents
unique dynamics, global payment
trends influence local markets. These
trends directly impact the rapid
adoption of new digital payment
methods, such as BNPL, wallets, and
real-time payments. Collectively, these
trends signal a global shift in the
payments landscape.
Americas
l Growth of card-like/closed-loop
payments: Businesses are looking to
optimize the cost of payments, leading
to the emergence of multiple new own-
brand payment platforms.
l Modernization of issuing and
processing platforms: Cloud-based
payment platforms offer multiple new
features, such as PaaS modules.
l Issuer-led BNPL: Visa, Mastercard, and
Amex offer merchants and banks their
BNPL stack and solutions.
l FedNow real-time payments and
Automated Clearing House (ACH)
changes: In July 2023, FedNow will
bring real-time payments to banks
across the USA.
l Real-time payments growth: In Latin
America, countries such as Brazil
have experienced surging transaction
volumes due to the mass adoption of
Pix, the local real-time payment method.
Europe
l Instant cross-border payments in EU:
The single euro payments area (SEPA)
scheme brings real-time cross-border
payments to the European Economic
Area (EEA).
l New payment architecture in the UK:
The UK’s New Payments Architecture
(NPA) adds further layers to real-time
payments, enabling new functionalities
such as Request to Pay and B2B
payments, which further advance the
use cases of real-time payments.
l Open banking revolution: Open
banking continues to grow in its use
cases and participants, with innovations
emerging from the existing architecture.
l Central bank digital currency (CBDC),
the digital euro: The EU and Nordic
countries plan to launch CBDCs soon
after completing trials.
Asia/Pacific
l Australia’s New Payments Platform:
Australia’s New Payments Platform (NPP)
has brought real-time payments to all
banks and will continue developing new
applications and use cases for B2C and
B2B segments.
l Real-time payments surge: Countries
like Thailand and India have witnessed
significant real-time payments volume,
contributing to the growth of innovations
and transforming the payments
landscape in Asia.
l BNPL growth: In certain regions with
low credit card penetration rates, BNPL
has emerged as an ideal solution for
digital payments and has experienced
rapid growth in the Asia region.
l CBDC launches: With China being the
first to launch a retail CBDC globally,
other markets such as India and
Indonesia are also looking to follow with
their own digital currencies.
4
Global perspectives: Adapting to
a changing payments landscape

10 key global decision

makers from eight markets
offer a unique international
perspective.
IDC conducted interviews with 10
Germany — A leading
senior payments leaders worldwide to: global sports apparel
manufacturer and retailer
l Gain insights into recent
Singapore — ZeusX, a
payments landscape changes Italy — A leading pioneer in global game
ecommerce retailer item marketplaces
l Explore the importance of
payments to their businesses Singapore — A
leading retail stock
Israel — Gett, the trading platform
l Establish the strategic approach country ’s leading ride-
of their organizations to adapt to Mexico — A leading hailing company
Singapore — Regional
these changes global hypermarket and
India — Market-leading healthcare giant
grocery retailer
ride-hailing company
IDC looked into their digital
transformation plans and explored
opportunities to optimize payments
across their business operations. The Brazil — A leading
interviewees included business leaders global fast food chain
in Brazil
from a mix of global giants and fast-
growing technology firms, providing New Zealand — One
a comprehensive perspective on of the top global
telecommunications
how established market leaders and (telco) companies
emerging players leverage payments
to enhance their competitiveness in
the new age of digital commerce.

5
Harnessing the power of payments
for business growth
How payments impact revenue
and costs when entering new
markets?
The pandemic has accelerated
digitalization and has significantly
boosted online and contactless
payments.
This has become a catalyst for change
in consumers’ shopping habits. The
interviews with payment leaders
revealed that customer migration
from POS to online shopping has
prompted companies to optimize
their online sales strategies to align
with customer preferences.
How improving payments
uplift the overall customer
experience?
The interviews revealed significant
insights into the importance of
payments to companies.
Many organizations now consider
payment optimization essential for
a positive customer experience. By
optimizing payments, companies can
keep customers engaged, enable
seamless purchases and increase
revenue. This shift emphasizes the
continuous efforts that companies
can undertake to further enhance the
payment experience.
How has the post-pandemic
retail landscape
been altered?
According to the interviewees, the
economic situation 2023 is expected
to introduce additional competition,
cost, and revenue pressures.
Payments play a crucial role in these
areas, as they have a direct impact. By
implementing payment orchestration,
businesses can increase revenue
and reduce costs while delivering
consumers’ preferred payment
methods. Additionally, payments can
be critical in accessing new markets
and generating new revenue streams.
Offering tailored payment choices
that cater to local needs can serve
as a unique differentiator among
competing brands.
INTRODUCTION 6
Realizing payments potential: Impacting
revenue generation and growth strategies
Payments play a pivotal role as a key pillar
of business strategy
“The importance of payments has increased at
a very fast pace. It is a pillar of our long-term
strategy plan now.” — A leading global fast food
chain in Brazil
“Payments are a foundation for us, they’re a key
capability that businesses need to have, and you
need to be excellent in it.” — A leading global
sports apparel manufacturer and retailer in Germany
“From day one, payments have been a strategic
factor; if we remove a popular payment method,
we can even see a 30% drop in a month.” —
Alex Tay, ZeusX, a pioneer in global game item
marketplaces in Singapore
Payments have a huge impact on revenue and
can influence the shaping of strategies for online
businesses. Hence, payments should not be
regarded as a commodity but as a vital client-facing
asset that necessitates continuous optimization for
impactful results.
Excellence in payments has become the
new benchmark for businesses
”Payments are not transactions; they are an
experience and an enabler, customers have the
choice now, and we have to cater to that.” — One
of the top global telco companies in New Zealand
“It’s an absolute must-have [to possess] technical
excellence to meet customer expectations [in
payments].” — A leading global sports apparel
manufacturer and retailer in Germany
By treating payments as an afterthought based
solely on pricing will put merchants at a significant
disadvantage compared to industry leaders who
set high benchmarks for their customers’ payment
experience.
Merchants are increasingly focused on delivering
exceptional performance in every aspect of
payments, from processing times to offering
a wide range of payment methods. This high
standard of excellence in payments is an integral
part of the overall customer experience and
serves as a benchmark that all merchants should
strive to achieve.
Payments can grow new markets and
revenues while reducing costs
“Introducing BNPL increased sales by 32% during
the holiday period.” — One of the top global telco
companies in New Zealand
“It’s important due to the revenue we can gain
by using preferred payments, and they can
also reduce costs and play an important role in
customer centricity and data.” — A leading global
fast food chain in Brazil
The payment options offered can make a significant
difference between success and failure. This is
particularly evident in markets with low card usage,
where local payment methods such as digital wallets
are crucial for business.
Introducing new payment methods also directly
and significantly impacts revenue. The plethora of
options and choices available to businesses means
that with the right tools, insights, and technology,
payments can become a true catalyst for growth.
7
Scaling success: Why large organizations
require robust payments infrastructures
The multivendor stack model is standard
for large international operations
“Leadership has decided that as many payment
methods as possible are the goal, bringing
whatever the customer wants to use, and we
want to drive the customer to use the best
possible payments.” — A leading global fast food
chain in Brazil
As businesses expand their online operations to
cater to new customers, increase their product
ranges, and enter new markets, payment demands
also increase proportionately. Merchants may
invest more in their payment stacks and add new
payment partners to cater to new channels and
overseas markets to optimize costs and customer
experience.
Among the 10 companies interviewed by IDC, six
had more than five payment providers in their
stack, with three having more than 10 payment
providers. This decision to use multiple partners
often stems from supporting various payment
methods optimally.
The key to payment optimization lies in
having a resilient, scalable, and economical
payment stack
“We have chosen a multi-acquirer strategy to
better satisfy [requirements], improve success
rates and costs of transactions.” — Alexander
Zhelonkin, Gett, a leading ride-hailing company in
Israel
The significance of scalability and resiliency in
payments was emphasized during interviews,
especially for merchants whose products
experience sudden spikes in demand, such as
limited-edition apparel. It was noted that these
surges could overwhelm payment processors,
resulting in online failures and substantial revenue
losses for merchants due to unfulfilled orders.
Hence, finding ways to automate and streamline
manual payment work will greatly benefit
companies facing similar challenges.
Continuous evolution and rescaling of
payment stacks are essential in response
to changing market needs
“Payments excellence is the overall goal,
improving the experience and fraud detection.”
— One of the top global telco companies in New
Zealand
“We are using AI and IoT in the payments’
analytics operations; with this in place, we can
segment customers by age/group and improve
our selling approach. AI is used to modify and
develop costings for each payment, allowing us to
develop a strategy.” — One of the top global telco
companies in New Zealand
Optimization and upgrades also bring opportunities
to implement new technologies into workflows.
Technologies such as AI and IoT can further drive
improvements.
Given the growing workforce and the increasing
complexity of payments operations, merchants
will need to explore ways to optimize their own
technology stacks further. This optimization is critical
for improving internal costs and enhancing the
customer experience, ensuring competitiveness in
their respective industries.
Unleashing new opportunities: How changes
in payment trends are empowering merchants
BNPL and digital payments are rising fast
”BNPL accounts for 30% of total sales.” — A
leading ecommerce retailer in Italy
“Credit cards as a percentage of total sales have
decreased,” — Alex Tay of ZeusX, a pioneer in
global game item marketplaces in Singapore
Many new companies with various business models
for installment and deferred payment options have
emerged, contributing to the rapid global growth of
BNPL.
In addition to BNPL, other payment methods
experiencing significant growth include mobile wallets
like Pix in Brazil and localized wallets used in Southeast
Asian markets such as Indonesia and Thailand. Direct
real-time bank payment systems like India’s Unified
Payments Interface (UPI) have also experienced rapid
growth. This highlights the evolving landscape of
payments as newer methods gain prominence.
These trends indicate the dynamic nature of the
payments industry. Merchants need to stay updated
with consumers’ changing preferences and behaviors
and adapt their payment stacks accordingly to remain
competitive in the dynamic payments landscape.
Opening up new payment channels leads
to significant revenue increases
“We expect 6% to 8% increase in revenue from
implementing new payment channels” — A
leading global sports apparel manufacturer and
retailer in Germany
For merchants operating in markets where credit
cards are not widely used, offering localized
payment methods such as wallets and bank
transfer methods using QR codes (e.g., PayID
in Australia) is crucial to access markets and
providing customers with payment choices. IDC’s
research highlighted the importance of finding
payment partners to provide these options. Failing
to do so may result in lost revenue and customers
switching to competitors who can offer such
payment options.
This emphasizes the importance of continuously
evolving and optimizing payment stacks to
include new payment channels that align with
market needs and customer preferences. Offering
a diverse range of payment options can increase
revenue and enhance customer experience,
loyalty, and retention, ultimately contributing to
the competitiveness of merchants in the industry.
Future bets should be placed on more
BNPL, crypto and social media
The rapid changes in the payments landscape
over the past few years are expected to continue,
with new payment types emerging and gaining
momentum. This includes variations of BNPL and
installment payments, real-time payments, CBDCs,
and cryptocurrencies.
Respondents in the interviews identified BNPL and
crypto payments as the payment types they would
closely monitor in the future for potential shifts in
consumer demand.
For example, a leading global fast food chain in
Brazil and Latin American markets implemented
payment support through social media channels like
Facebook based on research indicating unserved
consumer desire for such payment options.
As new payment methods continue to evolve
globally, merchants will need to be prepared to
adapt and ensure that their payment stacks are
flexible enough to support these changes and
stay competitive in the ever-changing payments
landscape.
Navigating Payment Complexity: How
Data and Orchestration Drive Success
Payment data is becoming a differentiator
for fully optimizing operations
“We will have to work at seeing more visibility
into payment costs and performance. Cost is
critical to us; we track this data on a daily basis.”
— A market-leading ride-hailing company in India
“We plan to leverage data to gain visibility into
payment costs and incorporate financial planning
into our analysis.” — A leading global hypermarket
and grocery retailer
in Mexico
A common theme about the importance of
clear visibility into payment operation data was
observed, specifically related to costs when
upgrading the payments stack.
The cost of payments emerged as a prominent
metric of interest in the industry.
For instance, a respondent mentioned that AI and
IoT infrastructure was implemented to optimize
the processing of their payments stack. They
utilized data — layered and granularly — to extract
greater value and efficiency from their payment
investments.
Complexity has created the need for
orchestration
”Centralization will be the main goal; we need
to reduce complexity across our operations to
reduce costs and we need excellent delivery and
integration capability from those partners.” — A
leading global fast food chain in Brazil
Some organizations utilize up to 20 different
payment providers in their payment stacks.
This is on top of navigating and complying
with diverse regulatory requirements in each
market, highlighting the complexity of payment
operations. As a result, the need for businesses to
rapidly scale their payments, simplify operations,
and optimize payment flows has become
increasingly crucial.
Centralizing payment management can directly
impact internal operations and improve the
customer experience. Hence, companies are
engineering their own payment engine to gain
even more visibility into payment flows and
orchestrate them better.
Fraud detection efforts ranked high among
future priorities and needs
The balance between ease of transaction and
payment fraud rates has traditionally been a singular
sliding scale, with merchants setting their preferences
for an acceptable fraud rate. However, legacy
techniques that rely on rules are becoming less
relevant in the face of increasingly sophisticated fraud
techniques.
Merchants have shifted their focus from rule-
based engines to newer technologies such as
AI and machine learning (ML) in fraud detection
efforts. These advanced technologies enable more
legitimate transactions while keeping fraudulent
attempts at bay, improving the overall ratio.
The rate of new attack methods being developed
by bad actors means merchants must always
be looking to optimize their fraud detection and
prevention efforts while minimizing the disruption to
the customer experience. One interviewee noted that
they wanted to build 3D Secure (3DS) integration
directly into the mobile app. Performing verification
without redirects to external websites greatly benefits
the seamlessness of the payment and allows more
data to be collected for future efforts.
10
Customer-Centric Payments: The Key
to Success in an Era of Experience
The shift in framing payment success as part of
CX success underscores its growing importance
“The first benchmark is customer centricity,
second is in reducing friction, and third is in
fast processing.” — A leading global fast food
chain in Brazil
Payment success has traditionally been measured
using isolated metrics such as authorization,
conversion, and failure rates. These metrics have
been siloed from other parts of the purchasing
experience. However, these metrics will continue to
play a crucial role in determining the efficiency of
payments.
IDC’s research has unveiled a new perspective from
merchants that considers payment success integral
to the overall customer experience.
This is in addition to the importance of positioning
payments as a business enabler and measuring
its success based on those terms.
By shifting the focus of payments within the
customer-centricity and customer experience lens,
merchants can greatly benefit from understanding
the impact of payments on the entire purchase
journey rather than viewing it in isolation. This paves
the way for developing new strategies and tactics to
optimize the journey.
Optimize the payment experience to
achieve CX goals
IDC’s research highlights key payment elements,
each crucial in enhancing the customer
experience.
The first element is optionality, which
offers customers their preferred
payment methods. Additionally, the
research shows that some merchants
are exploring the ability to switch
payment methods during later stages
of the purchase process, such as
the collect phase of click-and-collect
journeys, introducing new dimensions
to the concept of optionality.
The second element is seamlessness,
which encompasses checkout speed,
customization, user experience
(UX), and other innovative features
that facilitate smooth and effortless
transactions. Platform stability and
processing speed are commonly used
to measure seamlessness.
The third element is security, where
traditional metrics like authorization
rates are important. However,
initiatives like 3DS have significantly
improved security, ensuring enhanced
transaction protection.
The fourth element is clarity in pricing
throughout the entire process.
Transparent pricing and the absence
of price shifting or unclear pricing are
vital to instilling consumer confidence.
This can be measured through
abandonment rates, as unclear pricing
often leads to a lack of trust and
potential customer drop-off.
By optimizing these key elements, businesses
can create a customer experience characterized
by preferred payment options, seamless
transactions, enhanced security, and transparent
pricing, ultimately contributing to the overall
success of their CX goals.
11
Revenue and cost define success
in payments
Merchants use various metrics to define payments
success, including revenue generation and cost per
payment, which are crucial for businesses.

An orchestration platform plays a significant role in

gaining in-depth visibility into the cost associated with
each payment.

Additionally, another crucial metric is the revenue

generated per added payment channel. This is
particularly relevant for merchants entering new
markets, enabling them to swiftly assess the
performance of new channels in generating revenue
for their business.

Given the plethora of payment channels available,

it is critical for merchants to work with partners who
can enable transactions through these channels
and provide them with the necessary data metrics to
optimize their payment mix effectively.

12
Strategic Collaboration: Partnerships
for Enhanced Payment Experience

Payment partners are needed by Scalability, stability, and flexibility are Payment partners need to evolve as
businesses to assist in their growth critical factors for supporting businesses and payments change
payment initiatives

IDC’s research shows that payment partners’
support and the consulting dynamic they
offer can result in productive and healthy
relationships.
Successful working partnerships are characterized
by offering solutions using technical knowledge,
providing best practice sharing, and being
dynamic in adapting to changing requirements.
While costs are always important, payment partners
who can understand how to reduce costs through
efficient payment routing and orchestration will
significantly benefit the business.
”We are scaling our online capabilities and need
our payments partners to scale accordingly.
Massive scalability is needed during sale and
event periods.” — A leading global sports apparel
manufacturer and retailer in Germany
Having payment partners who can meet the
scalability needs of merchants and ensure seamless
operations even during peak periods becomes
even more significant, as they can assist merchants
in dynamically expanding to meet demand.
Reconciliation ability is also a key factor when
selecting payment partners. Being able to plug
payment data from multiple sources directly into the
platform and save on manual reconciliation times
was regarded as being a vital feature.
Payment stacks have evolved through various
iterations, incorporating upgrades and changes. The
ability to deliver a road map of developments and
features is a crucial characteristic of the best payment
partners.
Respondents identified several key factors they
would seek in future partnerships, including
improvements in security, enhanced payment
support, stability, availability, and regulatory updates.
Businesses are advised to look for payment partners
that demonstrate a forward-looking approach
to payment trends and future-proofing in their
developments.

Another critical area is the flexibility to implement

and support existing systems and integrate
seamlessly with a single integration. With the
complexity of payments emerging as a key theme in
the research, providing a flexible and customizable
solution that can work with complex integrations will
be highly valuable in bringing capabilities online in
an optimized manner.

13
Payments as a Strategic Lever: Unleashing
Untapped Opportunities
The interviews uncovered
the companies’ perspectives
on leveraging payments as a
value-creating opportunity in
the future.
1 2
Optimizing digital payments to increase
company revenues and reduce cost
per transaction through an optimized
mix of payments and acquiring options,
driving customers toward optimal
payment mixes for cost savings.
“ We need to work
further with our
partners to reduce the
costs of transactions.”
— A leading global fast food chain
”
in Brazil
Further optimizing payment options to
suit the customer needs of different
markets through hyperlocalization.
“ For each market, we need
to analyze trends in each
region and do more to serve
them with relevant payment
methods; by using data, we
aim to offer hyperlocalization.”
— A leading global sports
apparel manufacturer and
”
retailer in Germany
3
Innovating with own-branded payments
products through payments-as-a-
service offerings, allowing merchants
to control the payment experience and
reduce payment costs.
“ There is an opportunity within
our (own-branded) payments product
if we open up the wallet for use by
other vendors.”
— A leading global sports apparel
manufacturer and retailer in Germany
“ [We need to] see how we
can integrate the existing loyalty
program into payments.”
— A leading global fast food chain
”
in Brazil
14
14
The Payment Success Playbook

Trend Key takeaways

The rising importance of payments in business strategy. Industry standards now position
1 payments as a key driver of revenue, cost savings, and an opportunity to provide excellent customer
experiences.
Businesses must set high standards for payment experiences, treating
them with the same priority as other strategic pillars or risk falling behind
the competition.

Large and fast-growing organizations need payment stacks that can support their ambitions.
2 Large merchants now consider complex payment stacks with multiple providers as the norm. The
ability to scale this stack and maintain resiliency has become critical.
Multivendor approaches and rapid payment changes mean that
a flexible, scalable, and modular payment stack is needed to be
competitive.

Changes in payment trends create significant new opportunities that merchants can benefit
3 from. New revenue-generating opportunities arise from payment methods like BNPL, while emerging
payment solutions unveil additional avenues for growth.
Capitalizing on opportunities presented by new payments necessitates
support from payment partners. Failing to support payment options often
means customers turn to competitors who do.

The rising complexity of payments in 2023 and beyond requires data and orchestration for true
4 success. The best payment performers are distinguished by their ability to gain visibility into payment
operations and efficiently orchestrate them.
Those who excel in their payment offerings are gaining a competitive
edge, while merchants who ignore this risk are falling behind the
leaders.

Leading companies are increasingly placing payments success as a key component of the Merchants need to think of payments as an integral part of customer
5 customer experience. Merchants now view authorization rate-type metrics as an integral part of CX,
and no longer consider them the sole measures of payments success.
journeys to derive the most success in driving improvements forward.

Companies seeking to enhance their payments experience must find partners capable of Companies risk stunting their growth, reducing market access, and
6 continuously optimizing their offerings. Partners who can adapt to the industry’s rapidly changing
needs and offer continuous optimization are vital to long-term success.
limiting revenue gains if they team up with unsuitable partners.

Merchants have numerous untapped opportunities to utilize payments as a means to generate Newer growth initiatives need the right technologies and platforms to
7 new value. Merchants can drive new value by exploring further opportunities in hyperlocalization,
optimizing the cost of payments, and owning branded products.
launch effectively.

15
Validation Through Data: IDC’s Corroborating
Views on the Payments Industry
Europe — New payments need
orchestration
The global pandemic has fueled the
rapid rise of new payment types, such
as mobile wallets, BNPL, and cardless
payments. According to IDC, BNPL is
projected to grow at a staggering rate
of 37% annually from 2022 until 2028,
surpassing US$200 billion by 2028.
Optimizing and maximizing revenue
while improving customer offerings has
become crucial for overall operational
efficiency with multiple payment
channels. As retailers adapt to this
changing payments landscape, IDC’s
research reveals that their top priority
is to gain orchestration and visibility
into payment costs. This presents a
significant opportunity for banks and
fintech companies to offer solutions
in a banking-as-a-service (BaaS)
model if they possess the necessary
capabilities.
Americas — Card-like payments
are growing
Closed-loop systems or card-like in their branded cards, they offer
Europe BNPL payments are one of the major areas increased customization and data
transaction value of non-bank-led growth in payments in insights.
Unit: US$ billion the Americas. One recent addition to
this field is Amazon Layaway payments,
CAGR 22-28E: the latest development in their strategy USA card-like
37.0% to diversify their payment options. payments processed
Unit: US$ billion
According to IDC’s 2023 research,
leading global retailers are placing CAGR 22-28E:
increasing importance on developing 57.8%
closed-loop payment systems that
operate independently from traditional
card network rails. This approach is
driven by the desire for greater control
over customer experience, improved
visibility into payments, and reduced
merchant fees. These developments
aim to provide retailers with enhanced
autonomy and flexibility in managing
their payment processes, reflecting the
evolving landscape of payments in the
retail industry.
While this new generation of payment
tools builds upon the concept of
closed-loop systems, which have been
present in global retail for decades
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Asia/Pacific — BNPL making
significant moves
Across Asia/Pacific, real-time payment
schemes have come online in the
region, and the connected push
toward ISO20022 standards is evident.
Southeast Asia’s (SEA) various real-
time payment schemes, such as those
in Thailand (PromptPay), Malaysia
(DuitNow), and Indonesia (BI-FAST);
and India with its Unified Payments
Interface, have gained recognition
as some of the most successful real-
time payments projects globally. Both
retail and business real-time payment
transaction values have experienced
a surge in the region. This is aided by
the lack of historical card penetration in
underbanked markets and government
initiatives driven to reduce cash usage
through these convenient
mobile-driven payment tools.
The next wave of development
will focus on further payment data
capabilities, which can be activated
with ISO20022 standardization across
the board and cross-border integration
of the various real-time payment
schemes. Australia and the Southeast
Asia nations are already deep into
the planning stage to make these
integrations a reality.
Real-time payments
transaction values for
Southeast Asia and India
Unit: US$ trillion
SEA CAGR 22-28E: 42.3%
INDIA CAGR 22-28E: 55.6%
Europe — Payments
architecture overhaul
The European region is witnessing
the emergence of significant new
infrastructures that will revolutionize
how payments are conducted. One of
these transformations is the upgrade
of real-time schemes, exemplified by
the UK’s New Payments Architecture
(NPA), which lays the groundwork for
enhanced functionalities and increased
innovation in the payments sector. The
NPA enables new payment types, such
as Priority Payment, Instant Payment,
Request to Pay, and Same Day Payment.
To fully leverage the possibilities offered
by this new infrastructure, banks will
need to upgrade their architectures to
ISO20022 standards, along with other
changes.
Adopting ISO20022 standards brings
forth a wide array of data possibilities
for all payment stakeholders. The
availability of new data sets enables
further refinement of the customer
experience and facilitates the creation
of product layers that align more closely
with customer needs. These standards
open the door for better integration and
customer interaction based on the rich
data provided by ISO20022, ultimately
enhancing the overall payments
landscape.
The EU bloc is actively digitalizing the
single euro payments area, focusing
on improving back-end connectivity
between countries. Simultaneously,
efforts are underway to achieve unity
and enhanced integration on the front
end for retail and business customers,
aiming to make cross-border payments
within the EU as seamless as domestic
real-time payments.
The EU and Sweden have made
significant strides in researching and
developing CBDCs. The digital euro and
the e-krona have been introduced as
potential alternatives to their respective
currencies. As of 2023, these
currencies are in the advanced stages
of planning and feasibility assessment,
presenting new opportunities for
banks and other stakeholders in the
ecosystem to leverage and build upon.
Banks with the necessary capabilities
can explore layering their products
and services on top of these digital
currencies, tapping into their potential
benefits.
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Business Self-Assessment: Key
Questions for Optimizing Payments
The rapidly evolving payment technology landscape prompts several important questions to
understand the transformation requirements and prepare for the journey ahead.
Reflect on...
Are you looking for ways to manage your current
1 payment stack better? Gain visibility into costs
and improve them.
Does your company view payments as a strategic
2 driver of business?
Is current legacy technology creating constraints
3 on scaling payments?
Are you looking to enter new markets soon and
4 need to localize payments to match local needs?
Are you seeking new ways to create and deploy
5 payment products like wallets?
Can your current payment provider support you with all
6 the payment options you need, such as BNPL or crypto?
Are you looking for ways to upgrade your payments
7 experience security with technologies such as 3DS?
Are you looking to do more with data from
8 payment transactions?
Are you looking at ways to improve the payments experience
9 further and improve metrics such as conversions?
Are your current payment providers giving you a
10 workable and forward-looking road map for their
future developments and upgrades?
Action...
Understand how payment orchestration solutions and more data can help you in your quest to take full control of your
payment operations, increase efficiencies, and generate new revenue streams while reducing costs. Understand the
difference between the different types of orchestrator solutions and how they may benefit your business with their attributes.
Analyze your payments operations to identify areas where changes can be made to impact your business significantly. Seek
assistance from knowledgeable partners in this process.
Re-look at your payments stack and how it is faring in meeting both your current needs from both an internal and customer
perspective. Identify solutions including more optimized and modern acquirers if gaps in expectations are established.
Analyze sales segments, products, and different markets to understand the effect of an optimized payments strategy on
performance and where gains could be made.
Assess your current payments partners and understand if they can provide new and innovative payments solutions which can
help you engage with your customers better. Create a long-term plan to allow for future innovative capabilities in payments.
Understand the new payment types available, their benefits, and how your target segments could want to use them. Devise
an integrated strategy to create an optimal payments mix and drive customers toward it.
Familiarize yourself with the new developments in security, such as integrated in-app 3DS and developments in AI/ML, which
could significantly reduce fraud rates and losses.
Understand the importance of data in payments, and how more data can help you build a greater payments experience. Learn to integrate
payment performance with the other parts of the customer journey to obtain a more holistic understanding of the payment journey.
Consult with both your current and new payments partners to understand their advice and solutions on furthering the
payments experience based on their expertise and knowledge.
Look to industry leaders for support and innovation to meet the current and future developments in the payments industry.
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ABOUT NUVEI

Nuvei (Nasdaq: NVEI) (TSX: NVEI) is the Canadian fintech company accelerating
the business of clients around the world. Nuvei’s modular, flexible and scalable
technology allows leading companies to accept next-gen payments, offer
all payout options and benefit from card issuing, banking, risk and fraud
management services. Connecting businesses to their customers in more than
200 markets, with local acquiring in 45+ markets, 150 currencies and more than
600 alternative payment methods, Nuvei provides the technology and insights
for customers and partners to succeed locally and globally with one integration.

For more information, visit https://nuvei.com/

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