How Industry 4.0 is defining the future of business payments
EXTERNAL NEWS COVERAGE - Executive summary of Mastercard Business Payments 2022-2018 report
What was once an evolution of capabilities is now a revolution of technology and expectations as we move into the new era called Industry 4.0.
The financial services sector has come to a critical crossroads. How do we, as an industry, determine our own future when delivering business payment solutions to customers, regardless of size or complexity?
Emerging, rapidly evolving technologies have forever altered the payments landscape. Banks, in particular – given the complexity of services, global delivery and intense regulatory scrutiny – must navigate it carefully. It’s a journey that can no longer be successfully travelled alone, instead requiring the inputs of trusted partners and the precise execution of modern technology.
An age accelerated by real-time expectations is driving worldwide reform
While traditional payment rails remain reliable solutions, continuing to be at the center of cash cycle management, the shift from paper-based to digital processes is inevitable. The universal desire to improve efficiency, respond to innovation and reduce operational risk is necessitating worldwide reform of payments.
- Today, more than 20 countries possess real-time payment (RTP) systems.
- Some first-moving markets including the UK, Mexico and Switzerland, adopted RTP due to regulatory pressure.
- Markets such as South Africa and India, banks proactively (and wisely) responded to the growth of digital and non-financial players entering the market.
The US has launched its first new payment system in 40 years
With data and messaging functionality seen as the most advanced in the world, the US RTP system’s robustness accelerates innovation, impacting multiple use cases and flows including P2P, C2B, B2C and B2B. For example, technology pioneered by Vocalink, a Mastercard® company, powers the real-time payments (RTP) infrastructure and rails operated by The Clearing House (TCH). This becomes the foundation for a safer, smarter, faster digital payments system.
Innovation is creating new avenues for connectivity and intelligence
Thanks to digital innovation, companies can now connect all processing points in the cash cycle digitally, improving costs and mitigating risk. But more than that, companies can see the competitive advantage of more broadly available enterprise intelligence through easier data access and analytics.
Banks remain key delivery partners for businesses navigating the new economy created by Industry 4.0. Success will come by pairing with powerful financial technology providers possessing the vision and global expertise to navigate toward 2022 and beyond.