2025 Capgemini World Payments Report: Velocity meets value to enable the future of payments

From less cash to cashless: A fundamental shift

The journey toward a cashless society is gaining momentum. The Capgemini report reveals that on one hand, by 2028, instant payments are expected to experience significant growth, fuelled by consumer demand for instantaneity and a seamless experience. On the other hand, corporations face significant costs due to broken and non-digital payment flows and would be willing to pay for instant payment capabilities, recognising the value in streamlining complex value chains. However, the transition isn’t without hurdles. Banks, which are at the centre of the instant payment evolution, are currently underprepared for the accelerating demand for this highly sought solution, with only 5% of them ready to leverage instant payments at scale. This underscores a pressing need for financial institutions to invest in the infrastructure necessary to meet these expectations as the regulatory clock is ticking.

Velocity and privacy: Regulatory mandates

Regulatory compliance, privacy concerns, and robust Know Your Customer (KYC) standards are all essential elements of digital transformation. Building the infrastructure to support instant payments requires significant investment, but here lies the paradox: the return on investment is not obvious. Financial institutions are mandated to invest in these systems without the prospect of immediate profit, forcing them to find ways to monetise these services while adhering to regulatory standards.

By leveraging two key upcoming regulations — Open Finance and Instant Payments — financial institutions can create value from velocity. Open Finance brings data, providing insights into customer and corporate behaviour, while Instant Payments offer the instantaneity needed to meet growing consumer and corporate expectations. Together, these elements can pave the way for better service delivery and new monetisation opportunities.

Two decades of ongoing transformation towards a digital economy

Over the last 20 years, the payments landscape has been fundamentally transformed by innovation and regulation. Ghanem attributes the moment of the paradigm shift to the launch of the iPhone back in 2007. This wasn’t just a mobile revolution — it fundamentally shifted how people interact with each other… and how they pay. Personalisation, security, and mobility became synonymous with convenience, as person-to-person platforms like Venmo and the Dutch favourite Tikkie were developed, allowing for seamless Person-to-Person (P2P) digital transactions. With the advent of NFC (Near Field Communication) in phones in 2011, payment wallets and tap-to-pay solutions became the norm, further reducing the need for physical cards. At the same time, the rise of digital currencies like Bitcoin introduced entirely new payment mechanisms. All these developments have contributed to the steady decline in cash usage worldwide.

Regulatory frameworks, such as PSD2 (Payment Services Directive 2), fostered greater transparency and opened the door to new data-sharing capabilities. The development of the ISO 20022 standard, a universal messaging format for payments, further facilitated the harmonisation of data in cross-border payments, allowing its simplification and optimisation.

The role of fintech in driving innovation

One of the most notable outcomes of the last two decades has been the rise of fintech. Mobile technology, combined with customer-centric regulations, has levelled the playing field, allowing fintech, or financial new-age players, to thrive and offer innovative solutions that challenge traditional financial institutions. With the forthcoming launch of PSD3 and DORA in Europe, we are on the launch pad of yet another major transformation. These powerful regulations are expected to extend the principles of open banking into the realm of open finance (insurance, retirement, investments, mobility, …), enabling a broader range of financial products and services. Supported by the global digital ID wave, this shift will create a secure and efficient environment for both consumers and businesses.

Instant payments and the rise of embedded finance

On one hand, one of the most significant trends emerging from the report as highlighted by Ghanem is the rise of embedded or invisible finance. This concept allows payments to happen seamlessly in the background of everyday activities, without the need for traditional cash or card payments. By the way, when was the last time you had to show your card or cash in a cab?

On the other hand, the growth of instant payments is undeniable. The demand for speed and efficiency in payments is reshaping the financial landscape, but it differs in its applicability and the target audience. Ghanem ascribes the widespread use of instant payments in Asia to innovation being primarily driven by society, where younger, mobile and tech-savvy populations are at the forefront of adopting digital solutions. This is evident in the rapid uptake of instant payments, which now account for 26% of all transactions in the region.

In contrast, Europe experiences regulator-driven innovation, where policies shape financial systems before society fully adopts them. Probably the best example is Wero, an evolution of the iDEAL payment system, which represents this shift toward Account-to-Account (A2A) instant payments. Riding on SEPA (Single Euro Payments Area) and EPI (European Payments Initiative), Wero is poised to align with the growing demand for instant payments, offering a frictionless experience for consumers and potentially threatening the dominance of cards. Meanwhile, in the United States, innovation is largely led by the private sector, which is often reluctant to forgo its substantial profit margins. Thus, widespread change can be slower due to the need for all financial institutions to adopt new technologies at the same pace. These slower to evolve ecosystems, are reflected in the significantly lower adoption rate of instant payments, with both regions showing only a 4% uptake in 2023. Europe might be gaining traction with Wero across France, Germany, Belgium, and the Netherlands and Bizum in Spain and soon Portugal and Italy, and it appears things could evolve fast in Europe.

Digital currencies: The future of money

The introduction of digital currencies like the Digital Euro is one of the most exciting developments on the horizon. Unlike physical currencies or even cryptocurrencies like Bitcoin, these digital assets represent programmable money, capable of being directed by central authorities. While this brings unprecedented efficiency and operational cost reductions, it also might raise significant privacy concerns. Digital transactions are inherently more traceable, which has led to debates over the balance between security and privacy in this new era of currency.

As digital currencies evolve, they are likely to become deeply integrated with open finance platforms, offering greater transparency and a complete view of individual financial habits. This shift will empower financial institutions to better serve their customers by providing tailored services that align with their broader financial goals.

The Capgemini World Payments Report 2025 offers a compelling vision of the future, where regulatory mandates (velocity) meet consumer and corporate demand for better services (value). As we move toward an increasingly cashless society, the challenge for financial institutions is clear, as emphasised by Ghanem: Invest in the infrastructure needed to meet regulatory standards, while finding ways to monetise these services in a value-driven, customer-centric manner. By embracing open finance and instant payments, the financial ecosystem can deliver on both fronts, ensuring a future where velocity truly meets value.

Read the full report: Capgemini World Payments Report 2025