The future of payments

Economic sectors worldwide have been undergoing a rapid transformation in recent years. Looking ahead, by the end of the decade, we anticipate witnessing innovative changes that will give rise to a ‘new economy’. These include redefining the concept of money, introducing new asset exchange methods, offering intelligent solutions that span physical as well as digital environments, expanding inclusivity and sustainability principles, and transforming how companies build products.

Tokenization is already redefining the payments landscape, serving as the foundation for global digital services such as Apple Pay and Google Pay that continue to gain popularity. Despite the unprecedented challenges of a full-scale war, Ukraine not only successfully passed the crash test of the stability of its financial ecosystem but also maintains its position as one of the world leaders in the adoption of digital payments. Over 60% of all payments with Mastercard cards in physical retail in the country are made with NFC-enabled devices. In terms of the volume of such transactions, Ukraine ranks in the global top five countries at Mastercard.

Tokenization is set to gain even more momentum in the future. The wallets of tomorrow will not just serve as a means of payment; they will turn into a single point of entry to the user's personal data, consolidating payment cards, IDs, driver's licenses, various passwords and digital access keys. Payment acceptance methods will also change, allowing any digital gadget to become a payment device.

As the world becomes increasingly interconnected, payments are also evolving in this direction. A single app will enable users not just to pay for their purchase but also to get financial advice, insurance or a loan. This seamless access to financial services across all environments will be facilitated by connected finance, enabled through open banking particularly.

The importance of ESG principles will continue to grow, driven by consumers who want to have a positive impact on society and the planet. And digital financial instruments can assist them in this endeavor. For example, at Mastercard, we have collaborated with fintech Doconomy to develop the Carbon Calculator that can be embedded in bank apps, allowing customers to view the estimated carbon footprint of their purchases.

Societal and environmental challenges will have a significant impact on how companies are perceived by their stakeholders and will bring a new dimension to the implementation of ESG strategies, shaping products from concept to implementation.