3 Key Moves to Elevate Your Digital Payments Strategy

The world of digital payments is anything but static. Consumers demand ever-greater efficiency and convenience, pushing businesses to adopt digital platforms rapidly. New regulations present organisations with operational challenges that drive the development of new service models. Technological advancements, ranging from artificial intelligence to open banking and beyond, repeatedly change the rules of the game. Within this environment, organisations must be adaptable to remain competitive. Here are three key moves to elevate your digital payments strategy and boost corporate growth.  

1. Prioritise robust security measures 

The availability of various instant payment services and new digital channels requires businesses to connect to multiple banks or networks. This multi-connectivity creates vulnerabilities if not managed properly. After all, a digitised payment system presents diverse entry points for cybercriminals. And people – both consumers and employees – continue to be fraud prevention’s weakest link with their penchant for falling prey to social engineering gambits. To top it off, real-time payments mean that once a transaction is complete, the money is gone, and there is no chance of stopping or reversing payment.  

In response to these threats, corporations must prioritise robust security measures to safeguard transactions whilst maintaining a fast and frictionless experience. For example, a current significant issue is Authorised Push Payment (APP) fraud, where businesses and consumers get deceived into sending payments to fraudulent accounts. Industry-wide responses, such as the UK’s Confirmation of Payee service, have been implemented to combat this type of fraud. This service allows payers to verify the recipient's account details before completing the transaction, enhancing security and reducing the fraud risk. 

Employing holistic fraud prevention technologies is critical. For instance, security systems that monitor users’ logins, sessions, and payment activities can develop a detailed profile of what “normal” looks like for that user. Going forward, finance and security teams can use that profile to identify suspicious activity and implement real-time interdiction, placing monetary transactions on hold pending investigation.  

Organisations should also bear in mind that integrating legacy systems with new digital payment technologies may introduce unintended gaps that can be exploited by external hackers or internal bad actors. Manual processes that create a break in the digitised flow exacerbate this issue. To address this, businesses must ensure seamless connectivity between their systems and payment networks. Leveraging automation and centralised payment operations can greatly minimise risks and enhance efficiency. 

2. Combat fragmentation 

The fragmentation of payment technologies poses a significant challenge for organisations. This fragmentation can be the result of adopting point solutions over time or be due to barriers between legacy and modern platforms. Fragmentation has been accelerated by the rise of diverse payment methods, such as digital wallets and cryptocurrencies, where each method requires its own infrastructure. Moreover, differing regulatory environments across countries and regions have led to the development of localised payment solutions tailored to specific compliance requirements, hindering universal compatibility.  

The outcome is a patchwork of technologies that may lack interoperability, increase operational complexity, contribute to higher costs, and elevate security risks. To combat fragmentation, corporations can:  

• Prioritise interoperable solutions that adhere to global standards  

• Participate in industry-wide standardisation efforts to help create a more cohesive payment ecosystem 

• Modernise legacy systems by adopting cloud-based solutions and using APIs for better integration 

• Collaborate with regulatory bodies to drive the adoption of common standards 

• Implement middleware solutions to act as translators between disparate systems and to streamline operations 

• Build a componentised architecture that allows for the gradual migration of processes to newer platforms 

• Monitor the payment technology landscape for timely upgrades and new solutions 

By eliminating fragmentation within digital payment processes, the entire business becomes stronger and more competitive.  

3. Optimise cash flow management 

Digital payments offer significant opportunities for optimising cash flow. By connecting the payments ecosystem – from merchant services to treasury management and supply chain operations – businesses can achieve superior treasury and liquidity management.   

Consider, for example, the impact of real-time payments. Instantaneous payments provide a clear and current view of cash positions, reducing the reliance on short-term borrowing and improving working capital cycles. By enabling quicker fund transfers, real-time payments ensure timely payments to suppliers and faster receipt of funds from customers, directly enhancing cash flow. 

Incorporating artificial intelligence and machine learning (AI and ML) in payment systems also tremendously impacts cash flow management. These technologies can predict cash flow trends, identify anomalies, and automate routine financial tasks. AI-driven insights facilitate more accurate forecasting and better decision-making. Additionally, machine learning streamlines accounts receivable and payable processes, minimising delays and bolstering overall financial health. 

Then, there is the area of cross-border payments. Traditional cross-border transactions are often slow and costly, impacting cash flow. However, advancements in digital payment technologies are mitigating these challenges. Real-time cross-border payments are becoming more feasible, reducing transaction times from days to seconds. This improvement in speed enhances liquidity management for businesses engaged in international trade. AI and ML can also optimise foreign exchange management, providing real-time insights into currency fluctuations and enabling more strategic decision-making. 

Unlock new opportunities for growth 

Ultimately, adaptability is the cornerstone of a successful digital payments strategy. Prioritising robust security measures, combatting fragmentation, and optimising cash flow management help create a seamless, secure, and efficient payment ecosystem that enhances customer experiences and strengthens financial resilience. By continuously monitoring the technological landscape and proactively addressing emerging challenges, organisations can unlock new growth opportunities and ensure long-term success in the dynamic world of digital payments.