These four trends are shaping the payments landscape. Collaboration is key to keeping it connected, Jonathan Ehrenfeld, Head of Strategy at Swift explains.
The global payments landscape is like a puzzle. Lots of different pieces that, when connected in the right way, add up to something much greater than the sum of its parts.
Looking at four major trends influencing global payments today, it’s clear that this puzzle is only getting bigger. Putting the pieces together will be crucial for financial institutions, businesses, and consumers alike to thrive.
1. Accelerating innovation
We’re living in a golden era of innovation driven by emerging technologies that present both remarkable opportunities and complex new challenges. Cloud computing and APIs are rapidly maturing, allowing financial institutions to streamline operations and offer more dynamic and personalised services. Distributed Ledger Technology (DLT) is introducing new ways of interacting with and managing data, fundamentally altering how we think about trust and transactions.
Asset tokenisation, atomic settlement, and programmability promise to enhance efficiency and reduce friction in transactions. Over 134 central banks are now actively exploring the potential of Central Bank Digital Currencies (CBDCs). And Artificial Intelligence (AI) stands ready to revolutionise productivity and offer transformative possibilities beyond our current imagination.
While all this innovation is opening the door to many new opportunities, it also comes with new challenges for security, compliance, inclusion and integration that cannot be ignored.
2. Rising customer and regulatory expectations
Secondly, as technology evolves – not just in financial services, but in every aspect of our lives – so too do the expectations of regulators and customers for fast, convenient, affordable and safe services.
Regulatory bodies are setting higher standards, demanding more efficient cross-border transactions while maintaining the highest levels of security and resilience. The G20 targets for enhancing the speed, transparency, cost and accessibility of cross-border payments underscore this global push. And it’s not slowing down.
In Europe, the Instant Payments Regulation is driving the demand for cheaper, instant, and pre-validated payments. The Payment Services Directive is reshaping the retail payments landscape, while various markets are implementing regulations around crypto and tokenised assets. At the same time, regulators are focusing on ESG (Environmental, Social, and Governance) more than ever.
Financial service providers that can adapt quickly to evolving expectations will have an advantage in a future where change is the only constant.
3. A proliferation of new players and networks
Technological advancements and changing customer expectations have fuelled an unprecedented level of competition in payments. Fintechs, neobanks, card schemes, and big tech companies are all moving into the cross-border account-to-account space. And DLT networks hosting tokenised assets and deposits are further contributing to this evolution. At the same time, central banks, market infrastructures and industry consortia are actively exploring interoperability initiatives at regional and global levels.
All this means that businesses and consumers have more choice than ever in how they transact across borders. But unless these systems can seamlessly interact, frictions and complexity in international transactions won’t go away, and could even increase.
4. Changing trade and economic relationships
Finally, the geopolitical landscape is becoming more complex than ever, influencing global trade and economic relationships. Financial institutions are navigating an era marked by increased regionalisation, near-shoring, macroeconomic uncertainty, and slowing economic growth in many parts of the world. And with elections over the last year in more than 70 countries – home to nearly half the world’s population – this could add further volatility to an already uncertain outlook.
Geopolitical tensions are also driving a debate around regional and bilateral alternative payment systems, contributing to the fragmentation of the global payments ecosystem.
Navigating a multi-model future
The future of payments is one where multiple networks, currencies, institutions, and technologies must not only coexist but compete and collaborate. In fact, this is already the case. And while the complexity of keeping the global payments ecosystem connected is not getting any easier, it’s becoming more important than ever to do so.
To continue to raise the standard of international transactions, the financial community must prioritise collaboration across three key areas:
- Standardisation and interoperability: Developing solutions that bridge different networks and systems will be vital for maintaining a seamless global payment experience. Collaboration among financial institutions, technology providers, and regulators will continue to be key.
- Security and resilience: As the financial services ecosystem embraces new technologies, we must also continue to bolster our defences against emerging threats. Strengthening cybersecurity and ensuring operational resilience is paramount in protecting the integrity of the financial ecosystem.
- Inclusivity and accessibility: Ensuring a financial system that serves diverse populations and meets varying needs is crucial. Developing innovations that benefit all stakeholders, from large corporations to small businesses and individuals, will help create a more equitable financial landscape.
Connecting the pieces
Instant and frictionless global payments are a team effort. No institution, organisation or country can do it alone. True to our nature as a globally inclusive infrastructure, connecting an ever-expanding financial ecosystem is a key focus for Swift. And the power of collaboration in keeping it connected in today’s changing landscape has become even more apparent.
It’s this collaboration across the Swift community and beyond that’s driving progress towards the G20’s goals, enhancing experiences for end customers, and enabling international interoperability between new and existing systems, technologies, and forms of value.
But there’s more to do. Only by embracing these changes and working together with a spirit of cooperation and commitment to interoperability, security and inclusivity, we can navigate this new era and ensure a future-proof financial ecosystem that serves the needs of all.
This article first appeared in Finextra’s, The Future of Payments 2025 – Digital, Instant, Profitable?
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