Skip to main content Skip to footer
Cognizant Blog

With competition among new and established players, abetted by new technologies and payment models, the next year for cards and payments promises to be a dynamic one.

In 2023, the cards and payments market will become more open, fast and standardized. Due to greater competition and accelerating innovation, the sector is developing at a record rate and is no longer an exclusive club dominated by a handful of players.

This speed of evolution has been made possible by regulators lowering barriers to entry, as well as new players accelerating innovation. Globally, there is a shift toward more responsive and faster transaction and settlement cycles, with over 60 countries already deploying “instant payment” solutions.

These market changes will continue to create new opportunities for both traditional players and disruptors to gain new customers, develop new products and gain market share, reshaping the industry.

Cognizant’s 2023 cards and payments outlook offers six key trends that are likely to impact the market over the next 12 months:

1. Markets will fragment before consolidating 

As new entrants continue entering the market, the disruption to traditional players is rapid and significant. These new entrants, which include fintechs with specialized products alongside new bilateral and multilateral payment networks, are shaking the payments ecosystem by leveraging their technological capabilities and customer-centric focus.

Regulation has opened competition and lowered the barrier to entry. This, together with technological advances, has allowed for a more instant, frictionless and embedded customer journey. A few years ago, innovation was happening on the edges—such as with digital wallets or alternative payment methods. But now, changes are happening right at the core. While we will continue to see innovations on the edges, we are increasingly seeing financial institutions undertake initiatives to modernize their core.

With many players leveraging technology, it makes this market an exciting space, with consumers and businesses being the largest beneficiaries. Maintaining trust will be vital for all players going forward; therefore, continuous investment is paramount to keep up with regulations and stay ahead of the competition.

As the ecosystem evolves, we will likely see further fragmentation before consolidation occurs.

2. Cross-border payments will improve

Cross-border payments, particularly in the B2B space, are set for a shakeup in 2023, with extensive development—and improvement—expected in the coming 12 months. 

Today, cross-border payments tend to be slow, generate high transaction charges and are less transparent than domestic payments. However, improvements are being made, for example by SWIFT, P27 (in the Nordic region) and Nexus, as regulators lay the groundwork for cross-border payments to be modernized.

The improvements are having a positive impact on speed and security with new frameworks, but obstacles remain, including challenges related to technology, regulation and liquidity. The ISO 20022’s common technical standard enables interoperability, improved risk management and efficiencies. 2023 will likely see greater adoption of enhanced and rich data that will significantly improve cross-border payments.

3. Asia Pacific will continue to leapfrog other regions

Rising transaction volumes in Asia Pacific are outpacing the rest of the world and are likely to continue doing so. According to Cognizant’s 2022 State of Global Payments industry analysis, the region shows healthy annual growth of more than 8%, putting the region ahead of the Middle East and Africa (6.9%) and North America and Europe (both at 5%-plus).

Western countries are lagging China and India, mainly because of the large costs involved with replacing existing payments infrastructures. Many Asian countries seem able to leapfrog others without the burden of legacy infrastructure, which enables rapid innovation. Growing platforms, such as RuPay in India and UnionPay in China, are looking to expand capabilities and enter new markets. Many Asian governments are rolling out financial inclusion and faster payment programs.

4. Big Techs’ appetite for investment will grow

Big Tech companies like Google, Apple and Amazon are increasingly investing in the payments market. Despite a tough 2022, their interest in this sector continues to grow, leading to increased competition and disruption.

Big Tech firms have already begun to change the way payments are processed and have the potential to displace traditional players. With a strong customer base and advanced technology, they are well-positioned to compete with established players. Innovations, such as digital wallets and other pioneering products, are transforming the payments landscape by providing a more easily accessible front door for customers. 

Traditional players will need to decide which role they want to play with Big Tech entering the payments industry, whether it’s competing directly or partnering with Big Tech as an enabler to grow revenue channels.

5. Super apps will continue to rise in popularity

The latest figures from BankMyCell show there are almost seven billion active smartphones on the planet—equivalent to over 86% of the global population. Therefore, unsurprisingly, there is an ever-increasing demand for mobile-first experiences, especially in the payments space.

In Asia, data-driven super apps are growing in usage and influence. Apps such as WeChat, owned by TenCent, allow customers to purchase goods wherever it is most convenient— customers can buy and book almost anything via smartphone.

As Gartner explains, “Super apps can consolidate and replace multiple apps for customer or employee use and support a composable business ecosystem for enterprises.” We will see companies globally try to emulate the success of super apps like WeChat via an aggressive strategy. However, such a move may be hindered by local banking regulations and will require cooperation between regulators and technology companies.

6. Transactions will be balanced between the physical and the virtual

Effective payments solutions traditionally need to balance speed, cost, security and experience. With customers demanding “anywhere service,” payments providers must follow suit and ensure services are available where customers spend their time. As technology advances at speed, the scope of “where” will continue to expand from the physical to the virtual.

Unlike most other trends, the real success of payments will not come from payments occupying center stage of our daily lives and ensuing payment transactions, but from disappearing into the background and providing invisible, embedded payment experiences. All transactions will gradually become more integrated with customers’ experiences and eventually slip beneath their consciousness. Successful payment providers will strive to develop payment solutions that aren’t just frictionless but also invisible.

Cryptocurrencies are here to stay in relation to the evolving payments infrastructure. They have proven use cases as alternatives to fiat currencies in certain economies. For most developed and developing economies, crypto is a grey area and considered a risky investment due to its volatility. However, many governments will continue to invest in their central bank digital currency projects in 2023.

The last, but not the least important, aspect—and probably the most challenging one—is whether this all takes place in an environmentally friendly way. By offering sustainable alternatives to traditional physical money and cards, payment providers can empower citizens to take control of their carbon emissions while collecting data that drives insights into how people spend.

These payment services have the potential to stimulate investment, shape the future and ensure customers are more conscious of their decisions and impact on the environment.

For more insights, read our outlook series on Capital Markets and Banking, visit the Banking section of our website or contact us.

This article was written by Ashish Bhatnagar, Head of Cards & Payments, Global Growth Markets, and Shreegopal Ramakrishnan, Director, Cards & Payments Consulting, in Cognizant’s Banking Practice.


Cognizant UK & Ireland
Author Image

Our experts are contributing exciting insights about what's going on within technology and innovation.



In focus

Latest blog posts


More blog posts