How customer experience is driving the new era of payments, in four charts
- Increased demand for experience-led solutions rather than products is defining a new era in the payments industry
- Customer behaviour is changing, driving financial institutions towards offering new lifestyle-embedded payment methods

The post-pandemic payments industry is evolving to provide personalized financial solutions with a strong focus on customer experience (CX), according to Capgemini’s 2021 World Payments Report. Demand is rising for smooth integration of lifestyle-embedded payments, paving the way for Payments 4.X, a new era in the payments market.
“Growing consumer desire for convenient, lifestyle-embedded payments, together with retailer requirements for instant confirmation, smooth reconciliations, and seamless cross-border transactions, sparked Payments 4.X”, said the report.
Capgemini identified four pillars of the Payments 4.X era: data, shared infrastructure, robust platform capabilities, and embedded finance.
Financial providers can gain a competitive advantage by collaborating with payment companies and other partners in order to yield CX solutions that differentiate offerings for the new digital consumer.
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Changing customer behaviors
Superior personalized experiences are the expectation due to changing customer preferences and behaviors, according to Capgemini.
The consultant’s 2021 Voice of Customer survey revealed that Gen Z is moving away from credit cards in favor of more user-friendly, engaging, and budget-focused alternatives. This is driving the adoption of buy now, pay later methods, for example, which have seen strong growth in recent years.
The B2B sector is witnessing significant digital adoption. Cross-border business payments are set to reach $35 trillion in 2022, up 30% from $27 trillion in 2020, according to estimates.
Commercial clients also require increased digitalization and say they want solutions, not products. Before the pandemic, banks and payment firms engaged with their large corporate clients through corporate connectivity and treasury management solutions. As Covid 19 hit, these relationships transitioned to digital channels, and this increased demand facilitated wider adoption by making them more affordable and attractive for small businesses, as well.
Emerging payment methods
Next-generation payments will drive retail transactions growth, despite currently being only a small segment of the payments ecosystem. Capgemini noticed enthusiastic adoption of a number of next-gen payments options: BNPL, invisible, biometric, and cryptocurrency.
For example, Apple paired with Goldman Sachs to develop a BNPL service so its customers can use Apple Pay to make payments in installments. Goldman also bought BNPL firm GreenSky in a $2.24 billion deal announced last month.
“Nearly 20% of our Voice of Customer survey participants said they currently use BNPL solutions, and we expect the number to jump to 60% within the next two years,” said the report.
Payments 4.X
More and more businesses embed online and in-store payments within the shopping process, growing demand for “super apps” that provide one-stop destinations for seamless and personalized experiences.
The payments industry has been slowly preparing for this moment, evolving digitally over the past two decades as technology permitted better collaboration between financial entities.
The report takes a look back at the evolution of the payments industry that led to Payments 4.X:
- Payments as a commodity: payments are a non-core service, packaged into a core banking component
- Payments as a differentiator: About 15 years ago, technology investments pioneered seamless experiences, with firms outsourcing certain functions such as processing
- Payments as information: Data became king at this stage, as banks began to invest in AI/machine learning, big data analytics, and data lakes
- Payments as an ecosystem play: Firms collaborate with technology firms, third parties and others to offer Invisible Pay services, especially to retail customers
- Payments 4.X: Payments are embedded: Payments become embedded, invisible, and an enabling function in a collaborative environment as companies share infrastructure and data

Key regulatory and industry initiatives
For the first time since it has been tracking key regulatory and industry initiatives, Capgemini noticed that in 2020-21 regulators consistently added KRIIs across all primary objectives - risk reduction, standardization, competition and transparency, and innovation.
Regulators are promoting collaboration, accelerating innovation, securing privacy and mitigating systemic risk, the report noted.
KRII initiatives drop into four categories: Efficiency, Customer Focus, Innovation, and Effectiveness. The consultancy placed these in a matrix format, with the Y-axis representing the value-chain perspective, while the X-axis indicates impacted sectors.