Mastercard Payments Trends Navigator

Mastercard Payments Trend Navigator is a bi-annual report that draws on Mastercard’s extensive expertise in the payments industry to highlight the top trends and developments in global payments and banking.

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Trend 1: Embedded finance supercharges B2B banking

Embedded finance has traditionally been focused on business-to-consumer (B2C) solutions, such as ‘buy now, pay later’ (BNPL).

However, there is a significant market opportunity for financial institutions to enter the largely untapped business-to-business (B2B) segment.

Organizations must address three main challenges to realize the full potential of this opportunity:

• Reluctance to change established processes
• Lack of trust
• Difficulties integrating systems

Trend 2: Growing pressure on card profitability for issuers

Financial institutions face intensifying pressure on revenues and costs.

This is due to:

• Macroeconomic factors
• Evolving regulatory standards
• Increasing competition

As the market and competitive landscape continue to evolve, issuers need to monitor all factors affecting their P&L closely.

This includes:

• Understanding the costs associated with specific card features and benefits
• Evaluating which features are most utilized and valued by customers
• Adjusting offerings based on competition and customer needs

Trend 3: Traditional Acquirers need to redefine their SME strategy

Acquiring has boomed globally over the last decade.

However, a large part of this growth has been driven by new players employing innovative business models and practices to unlock the potential of the SME segment:

To ensure they remain competitive in the SME space, established acquirers need to reorient their focus on three main levers:

• Streamlined process and product experience (‘acquiring in a box’)
• Asset-light acceptance solutions (e.g. SoftPOS)
• Personalized and segment-specific value-added services for SMEs

Trend 4: Fraud risk rises, requiring more protection for customers

Social engineering and online scams are now a global threat to secure payments.

Issuers can protect their customers from fraud and scams by following three key steps:

• Fostering a strong culture of awareness internally
• Improving detection methods to combat scams by using predictive models with AI
• Developing targeted education marketing campaigns for customers

However, issuers need to balance strict fraud management and flawless customer service. Managing false positive declines will be key to their success.

A 3-step approach can ensure effective implementation:

Step 1: Develop GenAI-powered internal chatbot to support human customer support operators

Step 2: Roll out GenAI conversational chatbot externally to respond to key customer enquiries and replace legacy rule-based chatbots

Step 3: Augment GenAI conversational chatbot with task-fulfilment and personalized advisory capabilities

Mastercard’s continuous aim is to help people better understand and navigate the complex world of payments. Access the full insights from our Mastercard Payments Trends Navigator today.

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