Payment rails are the lines that link businesses and individuals for hundreds of years. Much has changed, though, since the days of walking into a bank and sitting opposite a pinstriped clerk to make a payment – and more change is yet to come.
In fact, at least 32% of global transactions will be conducted via instant payments, e-money, and direct debit by 2028, according to the World Payments Report 2025 by the Capgemini Research Institute for Financial Services. This reimagining of financial services is both fueling and responding to an ecosystem where costs, speed, and availability matter, with fewer pauses and borders – resulting in significant opportunity for businesses and consumers alike.
Why embrace digital payments
Real-time payments enable the instant transfer of funds between parties, bypassing traditional banking hours or delays caused by intermediary institutions. Payments are settled within seconds or minutes, as opposed to the hours or days associated with conventional bank transfers. Digital payments not only offer enhanced security through encryption and authentication protocols, but also integrate smoothly into websites, mobile apps, and point-of-sale systems, which helps facilitate an easy and seamless experience for customers.
No business wants to be left behind in the world of e-commerce growth, the ability to tap into new global customer bases, and access to data insights into spending behavior that digital payments can potentially bring. It’s clear that enterprises and financial institutions should embrace digital payments to stay competitive, improve customer experience, reduce costs and adapt to a rapidly changing financial ecosystem. By integrating secure, fast, and convenient digital payment solutions, businesses can not only meet customer expectations but also position themselves for growth in a more global, digital-first economy.
The role of artificial intelligence technology
AI-driven fraud models will expand to better consider consumers’ digital identity and personalized spend insights to combat the growing complexity of fraud.
Caution remains, however, over how AI-driven scams will affect the payments landscape. The rise in generative AI (GenAI) technology has enabled fraudsters to engage in more sophisticated and scalable scams to vulnerable businesses. Deloitte’s Center for Financial Services predicts that GenAI could enable fraud losses to reach $40 billion in the United States by 2027.
Strategic impact
The strategic impact on liquidity management, global commerce, and business efficiency has been a wake-up call for traditional banks. At the same time, FinTech and technology providers have released constant innovation that allow straight-through processing and integration of instant payments in business applications such as ERP systems.
Banks may need to look at a multi-rail approach, one that maintains a solid hold on existing global payments revenue infrastructure but delves into the possibilities that instant payment services can provide. “Access to liquidity and working capital remains crucial for companies of all sizes, especially smaller ones,” said Sébastien Delasnerie, Executive Vice President, Commercial Cards at Mastercard, in Taulia’s Virtual Cards report. “Faster payments will bring greater certainty, enabling businesses to both optimize their working capital and reduce their reliance on other forms of credit to finance their operations,” he added.
Regulators have been pushing for instant payments, such as in the European Union, which mandates EU banks to comply with the SEPA Instant Credit Scheme. This ensures euro-denominated instant payments can be sent and received within 10 seconds, enabling more and more companies to look into the option of modernizing their payment landscape to benefit from the opportunities.
Digital currencies are certainly expected to play a bigger role in the future, as well, given their potential to run 24/7 and be effectively borderless at significantly lower costs.
Decentralized ledgers: An outlook
Traditional finance (TradFi) refers to the infrastructure that shores up most financial transactions today – banking, loans, investments and payments – and is defined by centralized control and regulation. Decentralized finance (DeFi), by contrast, removes the third-party ‘middleman’, with a peer-to-peer system using blockchain to enable users to transact directly with each other – no banks necessary.
Blockchain technology is the backbone of much of this shift as it offers a decentralized ledger that records transactions securely and transparently. It is arguably fundamentally changing financial transactions, not least by eliminating intermediaries but also by streamlining payment processes, lowering transaction costs, and reducing settlement delays.
Indeed, the blockchain in the banking and financial services market is growing rapidly, from $6.98 billion in 2024 to $10.85 billion in 2025, a Compound Annual Growth Rate (CAGR) of 55.3%. This has been driven by demand for real-time transfers, digital banking, and government initiatives. It is projected to reach $40.9 billion by 2029, a CAGR of 39.4%.
Many businesses welcome the possibility of integrating blockchain technology to enhance visibility into their global cash flows and improve transparency in transaction status and routing. However, it is crucial that these flows and their respective processes are seamlessly integrated into existing systems to avoid creating silos that could lead to process inefficiencies. Such inefficiencies would undermine the efforts of Treasurers to maintain a unified perspective on liquidity and associated foreign exchange risks.
Much of the movement towards these newer forms of payments is focused on international transactions, which can be time-consuming and costly under TradFi systems. For this reason, stablecoins – built on blockchain networks and pegged to the value of a stable asset to maintain a fixed value and reduce volatility – can be a practical option for cross-border payments. Meanwhile, by being backed by a centrally regulated banking system, Central Bank Digital Currencies (CBDCs) – a digital form of a country’s fiat currency - offer an alternative to private digital currencies or cryptocurrencies.
Without a doubt, the payment landscape is evolving for the better. Are you ready?
Discover how to optimize working capital, enhance cash flow visibility, and leverage cutting-edge payment solutions in our Next-Gen Payments eBook, recently released by SAP Taulia.
