By Nadish Lad, Global Head of Product and Strategic Business at Volante Technologies
The payments industry is undergoing a transformative shift, driven by regulatory changes, technological innovation, and evolving consumer expectations. By 2027, the global payments revenue pool is projected to reach $2.2 trillion, underscoring the immense opportunities in this rapidly evolving space. At the heart of this transformation are trends such as ISO 20022 adoption, the rise of real-time account-to-account payments, and the growing reliance on Payments as a Service (PaaS).
This isn’t just about incremental improvements; it’s about creating a payment ecosystem that is globally interoperable, highly secure, and ready to meet the needs of the digital economy by 2030. Institutions that adapt to this change by collaborating with fintechs and leveraging emerging technologies will position themselves as leaders in the new era of payments.
ISO 20022: Standardising for a global payments future
ISO 20022 adoption is one of the most significant milestones in modern payment systems. By 2025, it is projected that 80% of high-value payments worldwide will be processed through ISO 20022 messaging standards. This data-rich standard enables improved interoperability, seamless cross-border payments, and enhanced fraud detection capabilities.
But the benefits go beyond compliance. Financial institutions adopting ISO 20022 can leverage richer transaction data to offer personalised services and streamline operations. The move also complements trends like API expansion, which allow banks to integrate advanced technologies like AI for real-time fraud detection and predictive analytics. The implementation of ISO 20022 is not just a regulatory requirement – it’s a stepping stone toward global payment interoperability.
The rise of real-time A2A payments
Real-time account-to-account (A2A) payments are becoming the backbone of the modern payments ecosystem. In 2023, over 266 billion real-time payment transactions were processed globally, representing a 42% year-over-year increase. Emerging markets like India, with its Unified Payments Interface (UPI), and Brazil, with PIX, are leading the charge, showcasing the potential for instant, cost-effective payment solutions.
Real-time payments are also revolutionising use cases beyond retail. Payroll, supplier payments, and government disbursements are increasingly leveraging these systems to reduce reliance on slower, more expensive payment methods. Consumer expectations are also shaping this trend, demanding instant and frictionless payment experiences, whether they’re splitting bills via mobile apps or paying international invoices. They want the same level of expediency and integration in their business transactions as they experience in their personal lives. The lines between B2B and B2C are blurring, and businesses are now demanding the same smooth experiences. Real-time A2A payments, coupled with services like Request to Pay (R2P), promise to deliver these capabilities at scale, further reducing the dominance of card networks in global payments.
Scaling with agility with PaaS
PaaS is emerging as the backbone of modern payment infrastructure, enabling financial institutions to transform their systems without the burdens of legacy maintenance. By adopting changes through an Opex model versus the traditional Capex model, institutions can embrace and justify change speedily leveraging the cloud.
By 2030, PaaS platforms are projected to process $8 trillion in global payment flows annually. This shift reflects the growing demand for scalable, cloud-based solutions that simplify operations, enhance security, and support seamless multi-currency transactions.
PaaS enables financial institutions to respond to changing market demands with speed and flexibility. By integrating tools like AI-driven fraud detection, real-time compliance checks, and automated payment routing, PaaS empowers even smaller institutions to compete effectively with larger players. It also streamlines cross-border transactions, supports real-time payments, and integrates solutions like The Clearing House RTP, FedNow, and SEPA Instant, qualifying financial institutions to deliver innovative, customer-centric payment solutions at scale.
The 2030 payments vision
By the end of the decade, the payments industry will look drastically different. Enhanced security measures, driven by AI and biometrics, will make fraud detection faster and more accurate, with zero-trust architectures becoming the standard for payment systems. Digital currencies will also play a pivotal role in reshaping the ecosystem. Central Bank Digital Currencies (CBDCs) are already being piloted in multiple countries, promising to streamline cross-border payments and boost financial inclusion.
While most transactions will be based on ISO 20022 by 2030, it is likely that another standard will be waiting in the wings to take over as the “next big thing”. Financial institutions will have another opportunity to practice their standard-shifting skills, but only if they have been proactive with ISO 20022 the first time around.
Interoperability will be critical to tying these advancements together. Initiatives like the European Payments Initiative (EPI) aim to create unified payment schemes that reduce fragmentation across borders. Such efforts will not only enhance efficiency but also bolster resilience in the face of geopolitical and economic uncertainties.
Looking ahead, the payments revolution is more than an update to systems and standards – it’s a fundamental transformation that will shape how people and businesses interact with money. By 2030, almost every payment will have AI in the processing workflow. In some cases, payments will be initiated entirely by AI, for example with AI-automated liquidity management, or AI bots that “auto shop” for consumers based on preferences related to products or trigger prices. Again, investing in AI early, in the right way, will yield rich dividends for financial institutions.
By leveraging partnerships, adopting flexible architectures, and focusing on customer-centric innovation, banks can not only meet the challenges of today but also position themselves for the opportunities of tomorrow.
