Thenew

paymentseraEmbracingchangeatfullspeedandfuture-

proofingpaymentsfortomorrow’sneedsIntroduction:

The

shifting

global

payments

landscape

.................................................................................................................................

3Rebuilding

bankingfromthe

core:

The

strategic

casefor

payment

hubs

................................................................................................

7Thefuture

ofcross-border

payments:

Real-timetransactions

driving

global

growth

...........................................................................10Insights

from

ACI

Worldwide:

The

future

of

real-time

payments:How

A2A

reshapes

the

financial

landscape

.............................

18Rising

paymentsfraud:

NavigatingAPPscams,

real-time

risks,

andtheAIthreat

landscape

...........................................................

20Insightsfrom

ACI

Worldwide:

AI-poweredfraud

prevention:

Tacklingidentitytheft,paymentsfraud,andscamsinrealtime...24Tokenization:

Thefuture

ofsecure

and

intelligent

digital

payments

.......................................................................................................

27Insights

from

ACI

Worldwide:Navigating

the

future

of

payments:

Trends,challenges,and

opportunities

for

banks

.................32Navigating

regulation

and

compliance

inthe

evolving

payments

landscape

.......................................................................................

35ACIWorldwide:

Poweringtheworld’s

payments

ecosystem

.....................................................................................................................39Literature

................................................................................................................................................................................................................

41Tableofcontents2In2030,frictionless,tokenized,intelligent,and

truly

global

paymentsareagiven.

Instant

cross-bordertransfers,

fraud

prevention

powered

byartificialintelligence(AI),

andmodular,

interoperable

paymentsystemsare

no

longer

goals.They’rethe

baseline.Rewind

to

the2020s:The

payments

ecosystem

was

at

acrossroads.

Legacysystemswere

holding

back

progress,

evenasconsumerexpectations

soared

and

fintechinnovationaccelerated.

Banks,

businesses,solutionproviders,and

regulatorsfaced

mounting

pressuretomodernise

infrastructure,embraceopenecosystems,

and

tackleincreasinglysophisticatedfraud.This

reportexploresthechallengesand

strategic

shifts—

fromthe

riseofAIandorchestration

platformstoevolving

regulationsand

modernised

payment

hubstrategies—thatareshapingthefutureof

payment

systems.

It

offersactionable

insightsforall

playersacrossthe

paymentsecosystemon

howtostart

positioningthemselvestodayto

lead,

not

lag,asthedecade

progresses.Welcome

to

the

origin

story

ofthe

next

era

of

payments.Adaptorfall

behind:The

urgent

case

for

payments

modernisationThe

PAY3602025survey

by

The

Payments

Associationrevealsasectorfocusedon

balancing

innovationwithoperationaland

regulatorydemands.AIstands

out

asthetop

opportunity,

particularlyforfraud

preventionandcompliance.

Cross-border

payments

remaina

keygrowtharea,

drivenbythe

pushforseamless,

regulatedglobaltransactions.Regulatorycomplianceisthe

leadingchallenge,

while

the

adoptionofnew

payment

methodsaddsfurthercomplexity.Theseshiftsare

happeningagainst

a

backdrop

ofrapidtransformation.Global

paymentsarechangingfast,

driven

by

tech,

real-timetransactions,digital-firstconsumers,andfierce

fintechcompetition.

Expectationsare

rising,complianceistightening,and

regulations

keepevolving,

reshapingtheentire

landscape.

For

banks,

merchants,andserviceproviders,

it’sa

hugeopportunity—butonly

ifthey

movefast,

innovatestrategically,and

rethink

how

paymentsfueltheir

future.Traditional

systems—rigid

and

fragmented—can’t

keep

upwiththeshifttoinstant,cross-border

payments

or

the

need

forseamless,secureexperiences.

Navigatingcomplex

global

and

local

rulesdemandsflexiblesystems,and

as

digitalgrowthspeeds

up,sodoesthe

needforAI-powered

risk

management.

Legacytech

justcan’tscaletosupport

new

payment

methodsand

partners.Today,

paymentsaren’t

justtransactions—they’reastrategic

engineforgrowth,

loyalty,andcompetitiveness.

Businesses

needscalable,cost-effective,andflexibletoolsto

streamline

paymentsandease

operational

burdens.Challengesand

legacyinfrastructureBanksandfinancial

institutions(FI)face

growing

pressureto

provideseamless,secure,and

real-time

paymentexperiencesasglobaldemand

rises.

However,

many

stillrelyon

legacysystemsthatarefragmented,

costly,

inflexible,

and

hardtoscale.These

issues

block

innovationand

makeintegrationwith

modernsolutions

moredifficult.

Maintaining

outdatedsystemsiscostly,

limitinginvestment

in

newservices.Introduction:Theshiftingglobalpaymentslandscape3Movingtocentralised,cloud-based

payment

hubs

alsorequiressignificant

investmentand

bringschallenges

with

security,compliance,andsystemcompatibility.

Many

existing

setupsfallshort,offering

limitedcoverage,failingto

support

all

payment

railsorclientsegments,

and

lacking

stronganalyticaltools.Legacysystemsand

relianceon

multiplevendors

alsohinderoperationalefficiency.

Banksoften

dealwith

manualexception

handlingand

multiplevendor

relationships,slowing

downoperationsandincreasing

complexity.

The

lack

ofvisibilityacrosssystems

makes

itdifficultfor

banksto

make

informed,data-drivendecisions

in

realtime.Meanwhile,the

payments

landscape

is

morecompetitivethan

ever.

Non-bankentrantsare

lowering

pricesand

speedinguptime-to-market.Customerexpectationsare

shifting—they

wantfast,transparent,and

unified

paymentexperiencesacrossallchannelsand

geographies.

Unfortunately,

manybanks

havecustomerexperiencegaps

dueto

inconsistentexperiences,slow

payment

processing,anddelayedstatus

updates.Complexauthentication

processescreatefrictioninwhatshould

beseamlesstransactions.To

stay

relevant,banks

mustsupporttheconvergenceofcardand

account-to-account(A2A)

payments

and

offer

a

consolidated

view

of

allpaymentactivity.Real-timeandcross-border

payment

pressuresThe

riseofreal-timeandcross-border

payments

is

reshaping

globalexpectations.

Paymentvolumesare

projectedtogrowfrom

USD190trillion

in2023to

USD

290

trillion

by

2030,

fuelled

byglobaleCommerceand

digitaltransformation.However,slow

processingtimes,

hightransactioncosts,

regulatoryfragmentation,andfraud

riskscontinueto

hold

back

progress.

Meetingdemand

requires

notonlyspeed

butalsooperational

resilienceandsmarter

infrastructure.For

merchants,this

meansenablingcross-border

payments

(including

payouts)andadopting

unified

reconciliationreportingacross

multipleacquirers.

Foracquirers

andpaymentservice

providers(PSP),offeringsmart

transaction

routingandintelligentacceptance

is

becoming

essential.“Aso-calledtrilemmain

payments

regulation

revolves

aroundcombatingfraud,enabling

instant

payments,

and

protecting

privacy—threegoalsthatcan

beinherentlycontradictory.Fightingfraudoften

requiresaddingfrictionto

payments,suchassuspending

or

blockingtransactionsorintroducingcontemplation

periods,

whichconflictswiththe

needforinstant

payments.

Alternatively,enhancingfraud

prevention

mayinvolve

more

intrusive

monitoring,which

raises

concernsabout

privacy.For

both

legislatorsand

FIs,the

keychallenge

isstrikingthe

right

balance

betweenthesecompeting

priorities.”Emanuelvan

PraagCounselat

KennedyVander

Laan

|

Financial

Regulatory

Lawand

Professor

Fintechand

LawFraud,

risk,andcompliance:Getting

it

right

is

mandatoryModernisation

is

not

justaboutfaster

payments—it’salsoaboutsecure

payments.

Real-timesystems

haveopenedthedoortosophisticatedfraudtactics

likeAuthorised

PushPayment(APP)scams

and

synthetic

identity

fraud.

Lossesfrom

APP

scams

alone

are

expected

to

reach

USD

7.6

billionby2028.Traditional

fraud

defences

are

no

longer

sufficient—

banks

mustadoptAI-poweredfrauddetection,

pre-paymentscreening,and

stronger

Know

Your

Customer

(KYC)

and

Anti-

Money

Laundering(AML)controls.Compliance

expectationsare

also

increasing,with

Payment

Service

Directive3

(PSD3),ISO

20022,and

Payment

Card

Industry(PCI)

Data

SecurityStandard(DSS)4.0demanding

real-time

monitoring

andadaptive

riskcontrols.Acquirersand

PSPsare

also

focusing

on

holistic

risk

management,with

pre-builtconnectorstomajorvendorsolutionsthatsupportseamlesscompliance

andfraud

preventionacross

portfolios.4Pathforward:Agile,scalable,andinteroperablesystemsTofuture-prooftheir

payments

infrastructure,

banksareshiftingfrom

monolithic,single-providersystemsto

modular,

vendor-agnosticsolutions.Centralised

payment

hubs,cloud-native

platforms,and

industry

standards

like

ISO

20022areenabling

moreagile,interoperable

operations

acrossmultiple

paymenttypes.Automationandintelligenttools

are

becomingessential—not

justforfraud

mitigation,

butalsoforimprovingonboarding,exception

handling,

and

customer

experience.Why

merchants

needto

modernise

paymentsToday’s

merchantsface

rising

pressuretodeliverseamless,

secure,andscalable

paymentexperiencesacross

channels

andgeographies.Consumers

nowexpectfrictionlessinteractions,whethershoppingonline,in-store,

or

acrossborders.

But

meetingtheseexpectationsis

becomingincreasinglydifficultas

many

merchants

remainconstrained

by

legacysystemsthatarefragmented,inflexible,

and

slow

to

adapt.Merchantsstrugglewith

managing

multiple

providerrelationshipsandintegrating

payment

methodsacrosschannels.Thiscomplexity—combinedwithtechnicalchallenges,

limited

paymentsupport,andstrictsecurityrequirements—leadstoinefficientandfragmented

payment

processesthat

hindergrowthandcustomer

satisfaction.Additionally,complex

reconciliation

processesandtheneedtoconsolidatedatafromvarioussystems

add

tothe

operational

burden.Thiscomplexity

iscompounded

bya

surge

infraud

risks.As

real-timeandcross-border

payments

become

morewidespread,fraudthreats

havegrown

moresophisticated,

oftenfuelled

byAIandgenerativeAI

(GenAI)technologies.According

to

the

latest

Global

Payments

and

Fraud

Report

by

Merchant

RiskCouncil(MRC),

asignificant

share

ofmerchantsaregrapplingwithtopthreatssuch

as

real-time

paymentfraud,

refundand

policyabuse,

phishing,

cardtesting,andfirst-party

misuse.Thesethreatsare

no

longerjustsecurityconcerns—they

havedirect

implicationson

customerexperienceand

operating

costs.Reducingfraudandchargebacks

remainsthetop

priorityfor

fraud

professionals,

butthere’sa

noticeableshiftin

focus:operationalefficiency

has

become

justasimportant.

Manymerchants

now

recognisethatthecostoffraud

management

itselfmust

beaddressed.

Manual

processesaredeclining,andthere’s

beenasteady

movetowardautomation

anddigitalscreening.

Infact,

merchantsarescreeningfewer

orders

manuallythan

in

previousyears,andwhentheydo,about20%are

declined—a

rate

that

holds

steady

acrossregionsand

merchantsegments.The

rise

of

AI—especially

GenAI—is

reshaping

fraudmanagement.

Morethan

halfofmerchantsalready

usethesetools,with

more

planningadoptionsoon.Yet,challenges

remain:

more

than80%report

issues

with

dataandtechnology,from

usingdataeffectivelyto

improvingAI/machine

learning(ML)accuracyand

coverage.As

fraud

evolves,

merchantsarestrugglingto

keep

up,

underscoring

the

needforadaptable,forward-lookingstrategies.Looking

ahead,63%of

merchants

plan

to

increase

fraudtechinvestments,whileonly

halfwillgrow

staffing.

Thefocusisshiftingtoscalable,AI-driven

solutionsto

reduce

fraud

losses,streamlineoperations,and

protectcustomer

experience.There’s

urgent

needfor

infrastructurethat

is

bothsecureand

agile.

Forenterprise-level

merchantswithglobaloperations,

optimisingacceptanceacrosscurrencies,

regions,

andlocal

payment

methods

is

nowfoundationaltosuccess.Manyareturningto

paymentorchestration

platformsthatintelligently

routetransactions,

reducecosts,and

maximise

approval

rates.

Meanwhile,technologies

liketokenizationare

becomingcentraltoenabling

recurring

payments,enhancing

security,andstreamliningomnichannel

checkout.Intheend,

modernising

payments

isabout

morethan

keeping

pacewithcustomerdemandsorfighting

fraud.It’sabout

buildingafoundationthatdrives

efficiency,

trust,

and

long-termgrowthinan

increasingly

complex

globalenvironment.5Adaptingtothefuture:What

billers

must

prepareforBillersfacegrowingchallengesas

digital

and

real-timepayments

becomethe

norm.

Manystill

relyonoutdatedsystems,with

high

papercheckvolumesand

limitedpaymentoptions.Operational

inefficiencies—suchas

manual

reconciliation,complexintegrationswith

legacy

platforms,and

poordigitaladoption—strain

resources.Additionally,

compliance

requirements,includingsanctionsscreening,

add

pressure.Ashifttoward

modernised

paymentsystemsis

helpingbillersconsolidateinfrastructure,improve

paymentvisibility,

andgain

better

insights

intocustomer

payment

histories.Advancedexception

handling,suchas

real-time

paymentpostingandautomated

return

management,is

streamlining

processes,

reducingfriction,and

lowering

return

handlingcosts.Thistransition

helps

billersimprove

paymentcollection

andcustomer

managementwhileaddressingoperationalchallengesandenhancingdigital

capabilities.Lookingahead:

Framingthefutureof

paymentsThe

nextfiveyearswill

bringawaveoftransformationtothe

paymentsecosystem,driven

by

rapidadvances

intechnology,evolving

regulations,andshiftingconsumerexpectations.This

paperexploresthetrendsthatare

poised

to

redefine

how

money

moves,

howtrust

is

built,and

howvalue

isexchanged

inanincreasingly

digital

economy.This

reportasksa

central

question:What

will

the

payments

ecosystem

look

like

in2030—andhowcanorganisations

positionthemselvestodayto

lead,not

lag,in

that

future?Toexplorethis,we

breakthequestion

intotwo

core

areas:?Imagining

payments2030:What

will

the

future

ofpayments

look

like?What

newtechnologies,

regulations,

andconsumer

behaviourswillshapethe

landscape?And

how

mightthearchitectureoffinancialservicesevolve?By

blendingexpert

insightsfrom

key

leaders

inthe

payments

spacewithforward-lookinganalysis,this

paperoffers

apractical

roadmapfor

navigatingwhat’s

next.

Itempowersall

players

inthe

paymentsecosystemto

rethinkstrategy,embrace

innovation,andstayahead

ina

fast-moving

industry.?Strategic

readiness:What

steps

can

banks,

merchants,billers,andsolution

providerstake

nowto

build

resilience

andagility?

Howcantheyturn

uncertainty

intoopportunity,

leveragingemergingtoolswhilestayingcompliant

andcompetitive?6Why

paymentsarethe

battlegroundPaymentsare

no

longer

justa

back-officefunction.They

have

becomea

primarytouchpointinthecustomer

experience

and

asignificantdriverofstrategicdifferentiationfor

banks.

In

a

worldofreal-timeexpectations,embeddedfinancial

services,

andintelligentautomation,theabilityto

process

paymentsswiftly,securely,and

intelligently

is

nowacore

requirement.Yet

most

banks

remainencumbered

by

legacyinfrastructure:siloedsystemsfordifferent

paymenttypes,

rigid

processing

logictiedto

proprietaryclearingschemes,andoverlapping

layersofcomplianceand

risk

managementtooling.Theseoperationalsilos

have

becomeadragon

innovation,efficiency,andscalability.

Meanwhile,digital-nativecompetitorsare

usingflexible,cloud-native

platformsto

launch

new

products,integrateseamlesslyintothird-party

ecosystems,and

respondtoshifting

marketdynamicsat

speed.Accordingto

McKinsey,

banksthat

modernisetheir

paymentsinfrastructure

can

achieve

a

15–20%

increase

in

revenue

and

a25–30%

reduction

in

operationalcosts.

This

dualvalueproposition—revenuegrowthandcostcontainment—makes

payments

modernisationa

board-levelstrategic

priority.FromfragmentationtoflexibilityMost

banksstilloperatefragmentedsystemstied

toindividual

payment

rails(card

networks,Swift,ACH,SEPA,RTGS,and

more),each

with

unique

formats,

compliancerules,andfraud

protocols.The

result

is

a

redundantinfrastructure,slowinnovationcycles,

and

inconsistentexperiences.Thesesilosare

increasingly

unfitfor

real-time,

integratedservicedelivery.Thestrategic

roleof

payment

hubsA

payments

hub

is

morethan

justa

pieceofmiddleware

or

a

toolfor

routingtransactions.

Itisafoundational

architecture

thatenables

bankstodecouple

payments

processingfrom

individualschemesandchannels,allowing

for

consistentbusiness

logic,centralised

monitoring,and

unifiedcustomer

experiences.“Payment

hubsarecriticalfor

banksto

moderniseandstaycompetitivein

a

rapidly

evolving

financiallandscape.Streamlining

cards,A2A,cross-border,digitalassets,etc.,

improvesefficiency,

scalability,andcustomerexperience,whilecontinuingto

meet

rising

regulatorychallengesina

highly

competitive,

tech-driven

landscape.

Payment

hubsalsoofferanewinroadintotheworld

ofOpen

Finance,

servicing

paymentfunctionalitiesinthegrowing

numberofpaymentsituationsin

our

digitisingworld.

Thezero

option—not

using

payment

hubs—risks

cedinggroundtoagilefintech

playersand

innovative

SaaS

providersthatintegrate

paymentfunctionalityand,

indoingso,

becomethe

primary

payment

interface.

Inactioninvites

disruption.”Douwe

LycklamaSeniorVice

PresidentINNOPAY—a

businessofOliverWymanDatos

Insightsdefinesa

payments

hubas

a

centralisedplatformthat

processesand

managesall

paymenttypesacrossthe

institution.

Itactsasa

single

point

ofintegration

for

upstreamsystemsanda

unified

interfaceto

downstream

clearing

networks.

But

beyondarchitecture,the

payments

hub

representsastrategicshifttoward

platformthinking

in

banking,onethatsupportsagility,

modularity,

and

scale.Accordingto

Datos

Insights’2023

report,

97%

ofpayment

executivesexpecttheir

payment

businesstogrow

inthenext

two

years,with44%anticipating

significant

revenueincreases.Capturingthatgrowth

requiresa

fundamentaltransformation

in

how

banks

processanddeliver

payments.

Payment

hubsare

increasinglyseenasthe

enabler

ofthat

transformation.Rebuildingbankingfromthecore:Thestrategiccaseforpaymenthubs7The

breakingdownof

historical

dividesTraditionally,card

paymentsandaccount-based

payments

have

beentreatedasseparatedomains,with

distinctplatforms,governance

models,and

productteams.

Butthis

separationis

increasinglyoutdated.The

riseofopen

banking,digitalwallets,and

embeddedfinance

iscreatingconvergenceacrossthese

paymenttypes.

Consumersand

businessesexpectconsistent

experiencesregardlessofrailor

channel.

Payment

hubsthat

supportmulti-rail

orchestration;

handling

cards,A2A,crypto,

andother

instrumentsonasingle

platform,are

becoming

critical

todeliveringthoseexperiences.Datos

Insightsfindsthatagrowing

number

of

banksimplementing

payment

hubsareexplicitlyincluding

card

payments

intheirscope.Thisconvergence

is

not

onlytechnicallyfeasible

butincreasinglyseenas

commerciallynecessary.AIandcloud:Accelerators

of

changeThe

powerofa

payments

hub

is

multipliedwhencombined

withcloud-nativeinfrastructureandAI.

Cloud

enablesdynamicscaling,

rapiddeployment,andseamless

integration

withthird-partyservices.AIenhancesfrauddetection,supportsintelligent

routingdecisions,and

enables

proactive

riskand

liquidity

management.Experts

highlightthatbusinesses

usingAI

intheir

payment

operationsareseeing

upto40%

improvement

in

frauddetection

rates

and25%

reductions

in

false

positives.Whenappliedacrossacentralised

hub,these

capabilities

can

be

embeddedconsistentlyacrossalltransactiontypes

andcustomersegments.Moreover,cloud-native

hubsenable

banksto

respond

in

real

timetochanges

in

paymentvolumes,clearing

partnerstatus,

or

regulatory

rules,

providingthe

kindofoperationalagility

that

legacysystemscannot

match.What

payment

hubsenable:Strategic

capabilitiesCentralised

payment

hubs

unlocka

rangeofcapabilitiesthat

aligndirectlywiththegoalsof

modern

banking

leadership.

Fromagrowth

perspective,

unified

platformsenablebanksto

launch

new

productsfasteracrossall

paymenttypes,whilealsoimprovingthecustomervalue

proposition

with

integratedAPIsandconsolidatedcash

managementofferings.Theabilitytoquicklyonboard

fintechs,

corporates,

and

newclearing

partnersopens

up

new

marketsegments

and

revenuestreams.Payment

hubsalsoeliminate

redundantsystems

andstandardise

processing,which

lowerscostsand

reducesoperationalfriction.Theyenable

higher

levelsofautomation,

limiting

manual

interventionandimprovingaccuracy.Centralisedvisibilityacross

paymenttypes

helps

banks

identifyand

resolve

bottlenecksin

realtime,

improving

performanceand

service.Cost

benefitsarefurtherenhancedwhen

payment

hubs

aredeployedon

modern,cloud-native

infrastructure.Cloud

platforms

minimisethe

needfor

largeon-premisesinvestmentsandallow

bankstoscale

capacity

up

or

down

as

needed.Centralisingcompliance,

monitoring,and

reporting

functions

reducesduplicationand

lowersthetotalcost

ofownershipacrossthe

enterprise.Fromacompliancestandpoint,

payment

hubssimplify

the

applicationofcontrols

likefrauddetectionandAML

checks.

Policiescan

beconfiguredonce

and

applied

enterprise-wide.

Native

ISO20022support

ensures

global

standardsalignment,whileend-to-endtraceabilitysimplifiesaudits.Customerexperience

is

perhapsthe

mostvisibleareaofimprovement.Acentral

hubenablesa

unifiedview

of

customer

paymentactivity,speedingissue

resolution

and

enabling

more

personalisedservices.

Forcorporates,managingall

paymentsthroughasingle

interface

improve

controlandtransparency.8Architectingforthefutureof

paymentsThe

long-termstrategicvalueofa

payments

hub

lies

in

itsabilitytoevolve.As

newschemesemerge,

digital

currencies

mature,andopenfinance

accelerates,

a

hub-basedarchitecturethatallows

banksto

plugin

new

capabilities

withoutoverhaulingtheirentire

paymentsstack.Future-ready

hubssupport

multi-railorchestration,includingreal-time,

high-value,cross-border,and

card

networks.Smartroutingcapabilitiesallow

paymentsto

bedirected

based

on

cost,speed,

riskexposure,orcustomer

preference.AI-driven

decisioningenhancesfrauddetection,

liquidity

management,

andexception

handling.

Integrationwith

broaderecosystems,via

secure

APIs,enables

banks

to

deliver

Banking-as-a-Service

modelsand

partner-drivengrowth.And

becausepayment

hubsare

builtf