The digital payment revolution: what businesses need to know

Speed and convenience are critical when it comes to payments in today’s fast-paced world.

Financial institutions, central banks, fintechs and other industry players have been racing to offer real-time, 24/7 payments. Asia-Pacific is leading the charge in non-cash transactions, with a 20% annual growth in 2023, outpacing Europe (16%) and North America (6%), according to Capgemini’s World Payments Report 2025. Markets like India and Hong Kong have seen central banks pioneer the development of real-time payments infrastructure, while Australia developed the New Payments Platform (NPP) with industry collaboration.

“Three key factors have been driving the growth of digital payments in Asia Pacific. First, consumers’ access to a great amount of processing power on their personal devices. Second, the experience that customers have with non-financial services, such as e-commerce. And finally, regulations to reduce systemic risks,” says Balaji Natarajan, Regional Sales Director for transactions banking products at ANZ in Singapore.

From mobile payment apps like Alipay or Weixin Pay in China to QR code payments in Singapore and Hong Kong, and real-time payment transactions via the Unified Payments Interface (UPI) in India, these digital options are reshaping the payment landscape in the Asia Pacific region and challenging the traditional dominance of cards.

In Australia, cash use plummeted to just 13% of total payments in 2022 from around 50% a decade earlier, according to the Reserve Bank of Australia, while a more gradual decline is seen in New Zealand. And with the 2023 launch of PayTo, a real-time “pull” and third party payments solution for consumers and businesses – Australia has extended its real time capability since the launch of instant 24/7 “push” payments back in 2018.

One of the key drivers for this massive shift to fast payments has been e-commerce. With customers accustomed to the immediacy and seamless experiences offered by e-commerce platforms, they expect similar experiences across all transactions.

In response, businesses are adapting by growing their focus on offering frictionless payment experiences to enhance customer satisfaction and loyalty, and ultimately, improve sales. Meanwhile, corporate treasurers are seeking faster accounts receivables settlements and better cash flow visibility.

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What businesses need to consider

Businesses are turning to banks and payment providers for solutions, such as QR codes, embedded payment options, and mobile POS terminals, and advice on how to use real-time payment systems like PayTo.

“Reducing friction really is the key theme here, whether it be time, whether it be where and how we execute against a given payment,” says Michael Jurkovic, Director, Payments Development, Transaction Banking Institutional, ANZ.

But there’s no one-size-fits-all solution; instead, companies should evaluate fit for purpose payment options based on simplicity and security, says Carolyn Young, Head of Payments & Cash Management Solutions for Australia and Papua New Guinea at ANZ.

And this starts with conversations that focus on the issues companies are trying to solve, instead of starting with a solution and looking for a problem to solve.

“One of the things that we do when we're thinking about innovation or a new product or a new service is to not assume what the problem is or what the opportunity is. We go right back to the beginning. What are the friction points? What's not working? What could be working better? Why is that the case?” says Jurkovic. “We're doing this with a really broad set of customers from different industries…so that when we design, we design to solve the right problems and provide the best experience.”

Businesses are increasingly thinking about automation in post-payment business processes such as reconciliation. “The amount of time that's spent on operational reconciliation and chasing down payments could be redeployed to other parts of the business, and this is another key driver for businesses to look into alternatives,” says Laura Abba, Head of Product and Innovation, ANZ in New Zealand.

One of those alternatives is payment requests. In December 2023, ANZ was the first major bank in Australia to launch a PayTo service for billers using a proprietary API (application programming interface). This allows businesses to send a payment agreement (a request to debit) to their customers via digital banking platforms, which customers can then review and accept, allowing the biller to collect the payment from customers’ bank accounts.

“We’re calling it zero-effort reconciliation. The payments are instant, real time, 24/7 so you are now receiving money at the time of provisioning of service, or at the time someone makes a payment,” explains Anuj Mehra, Director, Strategic Sales & Platforms, ANZ.

ANZ’s approach to delivering an internally built PayTo billing service through an API also addresses issues around simplicity, as businesses want to minimise the need for elaborate systems that their own teams may not have the skills to run, adding to costs. The compatibility of any new payment solution to a business’ existing systems and how it fits the company’s business model are also key considerations.

“There might also be an integration layer or internal policies and governance around APIs that may require a real mindset shift for businesses that have to be considered,” says Abba.

Moreover, APIs have become highly extensible tools that significantly enhance the customer experience. By integrating these APIs, companies can seamlessly embed payment solutions directly into their customer interactions, allowing for a more streamlined and efficient transaction process. This integration not only simplifies the purchasing journey for customers but also fosters greater engagement and satisfaction, ultimately driving loyalty and increasing revenue for businesses.

In New Zealand, which has yet to adopt real-time payments like PayTo, ANZ offers PayRequest, a fast and secure way to pay using a customer’s bank account without having to share banking details with others. Routing payments through ANZ’s fraud monitoring systems, PayRequest represents an alternative to direct debit, offering businesses immediate payment confirmation and helping broaden their customer base.

Awareness and security are key to adoption

With several options available to businesses and consumers, an understanding of their differences and benefits will be key to broadening adoption and, ultimately, driving use cases. How well a payment option is integrated into people’s daily life, its functionality and ubiquity will also influence its uptake.

Today, Australians are still familiarising themselves with the use cases of PayTo. But 2025 could be a key inflection point in scaling up real-time payments as larger organisations and will be ready to offer PayTo to their millions of customers.

“The payment mix of today may no longer be the payment mix of tomorrow. Looking ahead into the future, our view is that PayTo will play a very significant part. And what that means is the total cost of ownership of payment comes down,” says Mehra.

Security is also a concern for both consumers and businesses when it comes to instant payments. Armed with artificial intelligence tools, fraudsters have become more sophisticated in their schemes. Malicious cyber applications of genAI include malware development, bypassing threat detection, building quickly on existing capabilities, target profiling, sophisticated phishing, automated penetration testing and impostor scams. For example, a Hong Kong firm reported a US$25 million loss when fraudsters using deepfake technology impersonated the company's chief financial officer. Meanwhile, Australia was one of the most targeted countries by cybercriminals in 2023.

“Customers and businesses want to do things with less friction, but the expectation around safety and security has not changed,” says Jurkovic. “There are live conversations around whether to introduce more friction in terms of slowing things down to balance the ‘I want things done yesterday’, with the security element of it.”

Financial institutions have adopted a variety of solutions to prevent fraud, including the use of biometric identification and dynamic security codes.

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Source: Cap Gemini World Payments Report 2025

Role of banks in the evolving payments landscape

Banks like ANZ, with their established secure infrastructure and extensive networks, have a larger role in scaling up real-time payments, beyond simply developing products, says Young.

“The need to make sure that the whole of the network is there to really build critical mass is crucial. The product development process is not just about the services capabilities that we want to create, but to make sure customers across the network can enjoy that. Our role is not just to service our direct customers…but also enable others like fintechs to do that,” explains Young.

As the largest clearing institution in Australia and New Zealand, and a global payments leader, ANZ offers a strong backbone for businesses looking to provide the right payment experience for their customers. At the same time, partnerships across the payment ecosystem are also key to ensuring customers get the optimal experience.

ANZ’s strategic partnership with Worldline, a European payments provider, to deliver solutions that help merchants to enhance the shopping experience and boost customer loyalty, is a good example of this.

ANZ was also the first Australian bank to allow its customers to make card payments from iPhones in 2016. In 2024, the bank has partnered again with Apple to allow iPhone users to access buy-now, pay-later style loans via Apple Pay.

The future is open and data rich

Global non-cash transaction volumes are expected to reach US$2.84 trillion by 2028 from US$1.41 trillion in 2023, according to Capgemini. And as technology evolves, so will the payments landscape.

Open finance, which involves data sharing between key players in the payments ecosystem, is expected to continue to reshape payments, fueling more innovation, and allowing banks to tailor products with greater granularity for clients.

“These open data ecosystems are really critical to what the future of payments is going to be like. If you're a consumer, you're looking for marketplaces where you get integrated offers that recognise you as an individual. They give you targeted pricing, targeted offers, and to enable all of that, there has to be a common thread to tie the companies together and transfer money between them,” says Abba. “I think this is where that next phase of digital payments is going to come in.”

Some Asia-Pacific economies are ahead of the curve on open finance, while others are carefully weighing the benefits against concerns over data sovereignty, storage, and privacy, and learning from the experience of others.

Meanwhile, AI-driven applications are expected to further drive innovation as more customer data is gathered and used to enhance their experience. For instance, Abba says, “conversational payments” could use AI bots to interact with the customer at the point of sale, and guide them on the best way to pay and manage their cash flow. “For example, say to them off the back of a purchase, hey, you know, we notice you've got three credit cards. Would you like to split this across the three credit cards to maximise your rewards points on each one? I think that is going to be the next stage of what consumers expect,” she says.

Another emerging area is cross-border real-time payments, which is currently only available bilaterally between some markets such as Singapore and Thailand; Singapore and India, and Hong Kong and Thailand. The Bank for International Settlements is working on pilots with several central banks worldwide to enable cross-border real-time payments through Project Nexus, which involves central banks from India, Malaysia, Singapore, the Philippines and Thailand.

Central banks in Asia Pacific are also collaborating at various levels to pilot digital currencies which would allow large-value payments and delivery-versus-payment settlements. Markets like Hong Kong and Singapore are engaged in more advanced digital currency pilot program, while Australia and New Zealand are in the early stages of exploring a digital currency.

Today, companies can already leverage real-time payments to grow their businesses with the help of their partners across the ecosystem and build on this as they prepare to transition into an all-digital-payments environment. As Young sums it up:

“It’s one thing to make the payment fast, but if you can't receive it fast, if you can't leverage it to really gain the benefit of the speed and convenience, then it's really difficult for businesses to see the value in it. Businesses can turn to institutions like ANZ to support them through that change and bridge that transformation.”