world payments report 2022

Enabling banks to better serve their SMB clients

during Headwind times

WORLD

PAYMENTS

REPORT 2022

AMERICAS

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

“Winning with SMBs”

Optimizing technology and data to drive deep

engagement

LEADING INSIGHTS ON GLOBAL FINANCIAL SERVICES INDUSTRY

SMBs view

SMBs

in Americas

150

Global SMBs

banking executives

in Americas

Executives view

125

banking executives

across globe

Edition

Alliance partners

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

WORLD PAYMENTS REPORT 2022

THE EXECUTIVE STEERING COMMITTEE STRUCTURE

BANKS

Bruno Mellado

Head of Payments & Collection

Milind Khatavkar

Head of Consumer Finance, Payments & Cards

Sarthak Pattanaik

CIO, Digital Assets, Treasury Services, Clearance & Collateral

INDUSTRY BODY*

Nick Kerigan

Managing Director, Head of Innovation

FINTECH & TECH PARTNERS

Dorothy Copeland

Global Head of Partner Ecosystem & Alliances

Nilesh Dusane

Head of Institutional Payments

*Industry body –that has significant role influencing and

improving the FS industry

Catherine Gu

Head of CBDC and Protocol

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

WORLD PAYMENTS REPORT 2022

THE VOICE OF THE SMBS AND BANKING EXECUTIVES TO DERIVE MARKET AND INDUSTRY INSIGHTS

Corporate survey:

150 SMBs

Executive surveys:

125 banking executives

Responses, by region

Responses, by geographical coverage

Europe

40%

Americas

38%

Europe

36%

APAC & MEA

26%

18%

Responses, by industry of operations

APAC & MEA

30%

32%

UK Continental

Europe

21%

US Canada

Americas

30%

Responses, by payment

types served

68%

24%

Both B2C and B2B

Corporate payments (B2B)

Retail payments (B2C)

59%

35%

Global National Regional

11%

12%

13%

Consumer product

Automobile

Energy & Utilities

Chemicals

Telecommunication

Public/Govt

Pharma

Others

Manufacturing

Retail

5% 5% 5%

Australia

Hong Kong

India

Japan

Singapore

Malaysia

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

WORLD PAYMENTS REPORT 2022

OFFERINGS LINKED TO THE REPORT

Offerings

Open

banking for

payments

Trusted

data

exchange

Connected

payments

ISO 20022

Frameworks and API-based value creation

models provide an end-to-end solution that

combines all the necessary elements to

leverage an open ecosystem through

standardized APIs.

A DLT framework to streamline

data-sharing processes, manage them effectively,

and boost monitoring and auditability.

Integrated Connected Payments offers a

path to payments leadership through

implementing the efficiencies and

flexibility necessary to thrive in the new

ultra-competitive landscape.

The payments world is moving to the ISO

20022 standard based on its proven ability

to improve operational efficiency,

harmonize data, and develop value-added

services. ISO 20022 transformation affects

both business and IT layers.

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

WORLD PAYMENTS REPORT 2022 IN NUTSHELL

WINNING WITH SMBS: OPTIMIZING TECHNOLOGY AND DATA TO DRIVE DEEP ENGAGEMENTS

RE-ALIGN

Your priorities with changing

SMB market dynamics to

build relevance

and growth

ASSEMBLE

a composable payments

platform powered by

harmonized data to elevate

SMB customer journeys

EXPLORE

Opportunities to augment

existing capabilities with

emerging

Distributed Ledger

Technology

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

PAYMENT PLAYERS

NEED INNOVATION

TO WIN SMB

ENGAGEMENT

2020

US SMB market snapshot

31.7 million businesses

99.9% of all the US businesses

47.1% of total US employment

60.6 million employed

2020

Europe SMB market snapshot

25 million businesses

99.8% of all the European businesses

66.6% of total European employment

45.5 million employed

Global economic growth engine

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

MATURE DIGITAL PAYMENTS INFRASTRUCTURE TO CONTINUE

FUELING NON-CASH TRANSACTION GROWTH DURING 2021-2026

New and innovative payment methods are driving the growth trajectory

Despite global slowdown concerns, non-cash transactions will continue to grow … but at slower rate than expected

OPTIONAL

* Optimistic scenario reflects the non-cash transaction growth forecast without factoring in the impact of recession and inflation.

Worldwide non-cash transactions (B2C and B2B)

(volume in billions, 2016-2026F)

’21–’26F

CAGR

’21–’22F

Growth

’21–’26F

CAGR

(optimistic

scenario)*

127.6

346.7

440.6

552.9

690.4

1232.3

149.8

226.1

254.6

286.5

315.1

466.8

149.2

192.4

204.4

218.8

233.9

280.8

40.7

59.8

65.9

72.2

99.3

12.6

20.6

23.9

26.9

30.3

42.4

2016 2020 2021E 2022F 2023F 2026F

480.1

845.7

989.4

1,157.3

1,347.7

2,121.6

22.84%25.5% 28.1%

APAC will contribute more than 50% to global

non-cash transaction volumes by 2026, sparked by

the popularity of mobile wallets

APAC

Increase in mobile wallet transactions during the

forecast period is expected to help Europe’s non-

cash transaction growth amidst high inflation

rates and strong probability of recession.

12.9%12.5% 15.2%

Europe

Non-cash transactions in North America are

expected to grow on back of TCH and instant

payments (RTP) pick up.

6.56%7.0% 7.1%North

America

In Latin America (Brazil, Peru, and Colombia), the

successful adoption of instant payment systems,

such as PIX in Brazil, is the major growth driver.

8.55%9.7% 10.1%Latin

America

In the MEA region, expanding use of cards and

cards-based wallets is one of the key growth

drivers. Tech and telecom firms along with banks

are powering the wallet adoption among

consumers.

12.13%12.7%

16.5%

16.9%

Global

12.3%

20.1%

MEA

Americas

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

NEW PAYMENT METHODS CONTINUE TO GAIN PROMINENCE IN

NON-CASH TRANSACTION PAYMENTS MIX

1.30% 0.18%

76.25%

77.69%

16.27%

18.98%

6.23%

3.14%

2021 2026F

Total non-cash

transactions volume

Payments’

instrument mix

989.4 billion 2,121.6 billion

Traditional

payments mix

New

payments mix

Checks

Traditional Payments (Checks, cards,

credit transfers, direct debit)

Cards (debit

and credit cards)

Instant Payments +

eMoney Payments

Credit Transfers

(Customer-driven

push transactions)

Direct Debit

(Beneficiary-driven

pull transactions)

83.20%

72.26%

16.80%

27.74%

OPTIONAL

The rapid adoption of mobile payments has driven the acceptance

of innovative payment instruments, such as quick response (QR)

code payments, tap-and-go (NFC), digital wallets, and account-to-

account (A2A) payments.

Global QR code payment users may reach 2.2 billion

transactions (volume) in 2025, up from 1.5 billion in 2020,

which suggests that almost 29% of all mobile phone users

worldwide will use QR code payments by 2025.

Instant payments volume are on track to a CAGR

(2021-2025) of ~29%, reaching 428 billion.

eMoney transactions to witness growth of ~27% during

2021- 2026, to reach ~161 billion transactions (volume).

By 2025, unique digital wallet users globally are

expected to increase by ~1.5 times to reach 4.4 billion of

the population (more than half of the global population).

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

B2C e-commerce is projected to grow 10.5 times faster

than in-store sales during 2019-2025

Accelerated

shift towards

digital channels

Pandemic

instigated

DEMAND FOR CUSTOMER PROXIMITY TO FURTHER BOOST

INNOVATIVE PAYMENT FORMATS

Firms across industries are

re-inventing their business model.

Enabling new commerce requires rejuvenating the B2B value chain

Demand and

adoption of

new payment

formats

Rising e-commerce activities created need for:

▪ Streamlined customer journeys

▪ Optimal payment mix (traditional + digital)

▪ Value-added services (personalization)

Drive growth

of D2C

business

models

Major global brands to pivot between

traditional and online channels to harness

growth potential (E.g.: Adidas aims for “Direct

to Consumers” (D2C*) to be 50% of sales by

2025)

Customer

proximity

D2C is the business model and sales strategy where firms build, market, sell and ship product directly to customers and clients.

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

▪ Large revenue segment highly attractive for large banks

▪ High competition among banks with high entry barriers

▪ Majorly dominated by few large banks: Bank of America, BNP Paribas, JP Morgan,

Wells Fargo, DBS and Citi, concentrate of 70-90% of large corporate business

Large

corporates

SMBS ARE, WITH NO DOUBT, THE MOST ATTRACTIVE SEGMENT FOR

PAYMENT FIRMS

However, SMBs are stranded between institutional and retail clients!

▪ Relatively low entry barriers, compared to large corporate segment

▪ Fragmented market with commoditized offering – resulting in low ROE

for banks and high cost to serve

▪ Inconsistent poor quality credit profile impacts servicing

▪ SMBs contribute US$850 billion

annually to global banking revenues

▪ The market is expected to grow

7% year-on-year during 2020-2027

Small and Medium

Businesses

▪ Low value high volume transactions

▪ Low switching costs and entry barriers negatively impact

profitability – making market crowded and competitive

▪ High volatility and tepid customer spending impacts growth

Retail customers

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Geopolitical

and financial

volatility

Technology disruption

Regulatory

pressure

Increasing IT

vulnerabilities

ONGOING MARKET DISRUPTION IS FURTHER STRANGLING GLOBAL

ECONOMIC GROWTH ENGINE

55%

61% 61%

59%

57%

55%

51%

58%

62%

53%

56%

44%

53%

58%

Seamless interaction

across various payment

methods and message

formats

Regulatory and

compliance hand-holding

Centralization of account

management

Easy and cost-effective

cross-border payments

Process optimization

and automation

Real-time

processing/settlement

Protection and

prevention

of cyber frauds

Evolving SMB Expectations

Factors driving

market disruption

Are banks able to meet expectations?

AmericasGlobal

SMBs Viewpoint

77% 58% 70% 51% 73% 56% 76% 56%

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

BANKS AND PAYMENT FIRMS ARE STRUGGLING TO DELIVER!

56% of SMBs in Americas have a relationship with 2 – 5 banks

Yet, businesses are facing challenges across payments value chain

Unresolved issues faced by SMBs…

(Banking executives’ views)

…fueling discontent with their banking partner.

(SMBs’ view)

Someone could take advantage of this inherent friction …Competition is catching up!

11% | 11%

SMBs are satisfied with

their banking relationship

45% | 42%

are indifferent

44% | 47%

are dissatisfied

65%

74%

76%

79%

63%

72%

77%

89%

51%

60%

72%

66%

79%

70%

79%

64%

81%

83%

85%

Technology

issues

Process

issues

Elevated cyber threats/fraud

Poor integration with

new payment schemes

Lack of data analytics capabilities

Lack of automation

Inefficient invoice reconciliation

Bank/KYC documentation

and other compliance issues

Processing/settlement delays

Cross-border payments limitations

Ineffective credit and collection practices

Legacy or siloed payment processes

Incompatible messaging formats and

channels used by involved parties

SMBs are underserved:

89% of them are

reconsidering their

relationship with banks

across various product

categories

AmericasGlobal

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Target the SMBs

with a unified value

proposition

NEW-AGE PLAYERS ARE BUILDING B2B ECOSYSTEMS TO BECOME

ONE-STOP-SHOP FOR SMBS

How new-age players leverage the ecosystem play?

Increase the switching

cost for SMBs

Act as retention tool by

nurturing SMB relationship

Unlock new revenue sources

through value-added services

CORE BANKING &

PAYMENT SERVICES

Global

Transfers

Cross Border

Payments

Demand Pay

BNPL

Bulk

Payments

Treasury

Management

Virtual

Accounts

Global

Wallets

Trade

Finance

Instant

payments

Account

aggregation

Business

Loans

Services

OTHER

FINANCIAL

SERVICES

Real Time

Expense

Reporting

AR/AP

automation

Smart

Pension

POS

platform

and

services

Automated

Book-keeping

Payment

Reconciliation

Automated

Tax

Services

Crypto

Currency

Exchange

Reporting

and Analytics

(Insights

Dashboard)

Real Time

Audit

Risk

Management

Shared

KYC

E-Invoicing

SME

Insurance

Spend

Management

Bills

Management

BEYOND

FINANCIAL

SERVICES

Legal

Services

Utilities

E-Commerce

Setup

Marketing

Automation

Order

Management

Customer

Support

Inventory

Management

Communications

& collaboration

tools

Loyalty &

Receipts

Payroll

Management

Cyber

Security

New-age players are

bundling financial and

non-FS services

Recipe for success

How can incumbent banks and payment service providers step-up their game?

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

AMPLIFY PLATFORM

VALUE

BOOST PLATFORM VERSATILITY TO

UNLOCK PAYMENT POTENTIAL

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

INNOVATION IS UNDER STRESS…

Payment business for traditional banks is at risk!

Innovation takes a back-seat as ~73% banking executives in Americas do not prioritize IT budgets towards creating new value proposition

Building new

innovative services

27%

CHANGING

PAYMENTS

47%

17%

Cost of meeting

regulatory compliance

(AML, Data Privacy,

PSD2, etc.)

Refurbishing payments infrastructure

(Cloud, API, etc.)

Revamping mid and

back-office processes

RUNNING

PAYMENTS

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

PAYMENT FIRMS AND BANKS ARE STRUGGLING TO MAINTAIN THEIR

COMPETITIVENESS AND DRIVE GROWTH

What’s happening today What’s the result

How can payment firms and banks step-up?

BUSINESS STRATEGY

& PERFORMANCE

▪ Limited standalone business case for payments

▪ Pursuit of new revenue stream hardly addressed

▪ Constant pressure of lowering costs of payments

▪ Uncertainty of payoff

▪ Challenge in doing more with less

▪ Reactive and uninformed “leap of faith” decisioning

OPERATING MODEL

▪ Distributed organizations and capabilities

▪ Numerous and complex processes linked to products and

market specificities

▪ Mix and match of many service providers

▪ Inability to orchestrate a wider ecosystem including third

parties

▪ High cost of operations and compliance

▪ Residual risk

TECHNOLOGY & DATA

▪ Years of technological debt

▪ Siloed systems and databases

▪ Most of innovation budget consumed by compliance and

standardization activities

▪ No “rationalization” initiatives leading to growing

technological footprint and complex architecture

▪ Higher associated costs and time to market

▪ Suboptimal insights

OPTIONAL

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

RE-IMAGINE YOUR TRANSFORMATION JOURNEY TO UNLOCK QUICK

VALUE REALIZATION

Costs Revenues from enhanced servicesCost savings New revenues streams

REPLACE TO NEW PLATFORM

CONTINUOUS RENEWAL

Requires high initial setup

transformation budget

commitments including

license fees, migration and

implementation costs

Risk of missing deadlines,

budget overruns, change in

technology and market

dynamics resulting in less than

expected value realization

Low-cost of enabling solutions

through API-zation

Payment firms to pursue HYBRID APPROACH

Replace critical infrastructure with continuous development of new value proposition

Cost of change

Benefits of change

REFRESH EXISTING SYSTEMS

Shortfall

Focus only on cost savings that is realized in initial

phases of modernization and are short-lived.

of the payment executives said they are

struggling with monolithic, inflexible, and

siloed payments infrastructure

payment executives said they are trying to

sustain with the existing systems by making

tactical changes

Focus shifts to cost savings and revenue uplift

payment executives said their firm is

pursuing large multi-year transformation

projects to decommission legacy systems

Focus shifts to creating new revenue streams by active

curation of new value propositions

of payment executives said their firm

has (or is exploring) fluid architecture

through APIs that enables the rapid

configuration of payment products

and services.

27%

32%

35%

32%

34%

32%

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Interaction layer

ASSEMBLE A COMPOSABLE CANVAS…

“Build to evolve”

payments platform to fast embrace change

Compliance

Identity

Fraud

management

Confirmation of

payee (COP)

AML

Pricing

& billing

Automation

Reporting

Assurance services

Utility services

Interaction layer

Messaging mosaic

Fee products

PAYMENT

HUB

Direct

debit

Fund products

BNPL

VAM

Netting

Cash & liquidity

management

Loyalty

& rewards

Offer

mgmt.

Credit

scoring

VAM: Virtual account management

RTGS: Real time gross settlement

ACH: Automated Clearing House

RTP: Real time payments

BNPL: Buy Now Pay Later

AML: Anti money laundering

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

… TO UNLOCK PLATFORM CAPABILITIES AND ON-THE-GO VALUE

REALIZATION

Efficacy of platform business models depends upon data quality

Right data

is the lifeline of payments platform!

Open capabilityHyper scalability

High speed

to market

Low total cost

of ownership

Hyper-personalization

Future-proof

technology

No threat of

accumulating legacy

systems. Systems and

technology upgrades

occur over the cloud

without creating any

technical debt

Shift focus from

managing mid and

back-office to

orchestrating

experiential

customer journeys

With banking

capabilities delivered

in the cloud,

in-house IT costs

reduced significantly

Launch new

products or an entire

bank within weeks

Infinite computing

power and resources

delivered over the

cloud with provisions

to scale up or down

to meet business

conditions

Plug-n-Play

pre-composed and

pre-configured

end-to-end banking

functionalities from

partner ecosystem

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

DATA CHALLENGES

banking executives believe that data

available to them is unreliable and

difficult to process for insights

banking executives said they lack right

tools and ability to manage

unstructured data

‘HARMONIZED DATA’ IS THE NEW OIL…

Drive towards success by converting Data → Information → Insights

ISO 20022 is the common language for the world to transact!

Accelerate your transformation journey. ACT NOW!

Adopt

ISO20022

for data

harmonization

▪ Provision to add supplementary data around

the transaction

▪ This means banks have more data to mine

and derive insights

RICH DATA

Rich data end-to-end mean all actors in the

value chain are acting with the same data

resulting in high transparency and

interoperability.

END-TO-END

DATA

Ability to examine data at granular level in

detail enable banks to accurately and more

easily comply with regulatory as well as

risk-related requirements.

RIGHT DATA,

FIRST TIME

Detailed and better structured reference

information.

MEANINGFUL

DATA

73% 77%

68% 70%

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Simplify existing operating model,

and rationalization of payments

application portfolio through

composable architecture and

partnerships

Build 360-degree single-view data

capabilities to derive

improved business insights

Integrate new, faster, and real-time

payment types to manage

day-to-day liquidity

Remove collaboration barriers with

seamless integration of third-party

services through APIs

▪

Real-time cash flow forecasting

▪

Counterparty risk management

▪

Real-time dispute resolution

EMPOWER SMBS TO UNLOCK THEIR GROWTH POTENTIAL WITH

END-TO-END VALUE PROPOSITION

of SMBs could re-consider their

relationship if banks fails to

deliver automated end-to-end,

real-time operational

capabilities

of SMBs are reconsidering

reporting tools/services

provided by banks

of SMBs are expecting their banks

to provide flexible and improved

working capital management

capabilities

of SMBs wants to leverage

embedded

financial services

46%

70%

61%

Voice of SMBs

▪

Streamlined invoice and payment processing

▪

AI enabled repair automation

▪

Automated regulatory reporting

▪

Enablement of payment initiatives (e.g., Real-

time

gross settlement, instant payments, etc.)

▪

Consolidated payments dashboard

▪

Automated reconciliation reporting

▪

Combine ISO 20022 with Open-

banking data sets

▪

Peer-to-Peer payment solutions

▪

Cross-boarder and multi-currency payments

▪

QR-based payment solutions

Examples

Synchronized ecosystem on harmonized platform builds future readiness!

Intelligent composable

payments platform

CONNECTED ECOSYSTEM

73%

63%

70%

60%

Americas

Global

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

PREPARING FOR

EMERGING

AGE OF SEAMLESS

VALUE EXCHANGE

STRATEGIZING YOUR TECHNOLOGICAL

EVOLUTION FOR FUTURE READINESS

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

FAST-PACED EMERGING DISRUPTIVE TECHNOLOGIES ARE CREATING

INNOVATION CONUNDRUM

Technologies will not displace each other but will augment one another.

How should incumbent banks and payment firms approach?

Banks foresee DLT’s potential,

recognizing that adoption will be steady

Expect a future of co-existence with

on-chain

and

off-chain

integration

Originator

business

Originator

bank

Beneficiary

bank

Beneficiary

business

Transaction process automated through DLT-based smart contracts

Clearing and

settlement

Clearing and settlement of payments completed on existing traditional payment rails

The PoC was conducted by IBERPAY (Spain) in 2020 along with five largest Spanish banks under Spanish Central Bank’s observation.

▪ Recorded 20,000+ end-to-end instant credit transfers in less than 2.5 seconds

▪ Delivered significant efficiency improvements, traceability, and integrity of transactions

On-chain

Off-chain

An end-to-end automation of SEPA Instant Credit Transfer (SCT Inst) – the IBERPAY example (Spain)

banking

executives agree

that DLT will help

to unlock new

value sources and

revenue streams

62% 64%

banking

executives agree

that not exploring

DLT now could

erode their

competitive

advantage in the

future

31% 28%

banking

executives said

that their

business partners,

service providers,

and competitors

are exploring

DLT-based

opportunities

56% 51%

banking

executives ranked

innovation

around DLT as

their top priority

for 2023 payment

transformation

agenda

26% 26%

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

PREPARE – PARTICIPATE – PURSUE TO UNLOCK DLT POTENTIAL

PLAY 1

PLAY 2

PLAY 3

PREPARE: Focus on assembling the infrastructure for building the

foundation

▪ Focus on building DLT-based payment network

▪ Visa has launched B2B connect platform for DLT-based cross

border payments

PARTICIPATE: Group of banks building industry use cases on

regulated stable coins (CBDCs)

▪ All major banks in collaboration with a central bank, industry

association, tech firms to build a consortia

▪ More than 100 central banks have collaborated with private

banks for various industry use cases

PURSUE: Banks with high stake in DLT, owns infrastructure and

issue their own tokens/coins to build their niche (specialization)

▪ Very few tier I banks exploring full scale DLT potential

▪ HSBC and JP Morgan are creating DLT based specific solutions

Readiness for regulatory exposure

Innovation potential Resource allocation

High

Moderate

Moderate High

Banks must pivot between innovation potential and risk-averseness to strategize their play

DLT opportunity areas for banks and payment firms

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

STAY IN THE GAME WITH MULTI-RAIL FOUNDATION

Crypto-currencies and stable coins are gaining traction…

21.7

41.8

69.1

110.4

178.3

290.5

33.3

81.3

152.1

233.6

337.5

466.5

45.8

109.3

240.3

371.3

536.3

744.7

21.4

46.8

80.7

127.8

190.2

265.6

2020 2021 2022E 2023F 2024F 2025F

Americas Europe APAC Others

122.2

279.2

542.2

843.1

1,242.3

1,767.3

B2B cross-border transactions on blockchain

(Volume of transactions in millions)

PLAY 1

83% | 80%

SMBs are interested

in using DLT and

Blockchain in payments

53% | 42%

SMBs believe DLT will be

instrumental in cross-border

payments by 2025

64% | 64%

SMBs foresee DLT-based

payments network to emerge

as strong alternative to

traditional networks

…prompting central banks to start considering DLT-based payment

rails for contingencies

Multi-rail payment strategy

Regional payment rails (CPSS, NEFT, PIX, etc.)

Emerging DLT rails

(RippleNet)

Global payment rails (SWIFT, ACH, cards, etc.)

Private payment rails (PayPal, Venmo, Zelle, etc.)

Payment rails Interlinking

Buyer Seller

74% | 56%

banking executives agree

that DLT could be important

as contingency network

Central Bank of Brazil initiated project SALT in

2017 to pilot DLT based system for a contingent

solution that would be able to immediately

replace core functionalities of the main Brazilian

RTGS in case of extremities.

As of May 2022:

55%+ of the top 100 banks (by AuM) have invested in DLT related startups

either directly or through subsidiaries

DLT infrastructure is the top investment area for banks

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

EXTEND YOUR INFRASTRUCTURE TO ENABLE INDUSTRY

READINESS…

PLAY 2

Central Banks are launching digital currencies to overcome limitations of

traditional monetary systems

…resulting in CBDCs emerging as innovation sandbox for exploring

DLT-based industry use cases (Banking executives’ view of importance of use cases)

Parameters Fiat-based system

Crypto

based system

CBDC

based system

Safety and stability

Accountability

Efficiency

Inclusion

User control over data

Integrity

Adaptability

Openness

System strength

System limitation System vulnerabilities

Banking executives agree on the benefits of CBDCs…

82% 90% 79% 79% 81%83% 89%

68%

83% 79%

Provide oversight

on unregulated

crypto assets

Support new

payment

innovations

Enable access to

central money

during emergency

Serve as payment

channel for public

funding programs

Reduce

cross-border

transaction cost

Source: Bank of International Settlements, 2022

Note Fiat currency: Fiat money is a type of currency that is not backed by any commodity and is typically proclaimed legal tender by a government decree; CBDC: A central bank digital currency is the digital form of a country's fiat currency.

The French central bank, Banque de France, wants a working wholesale CBDC ready to go as a

settlement asset as early as 2023

Central Banks and private banks collaborating to

explore industry-wide use cases

Transactional use

-case

Risk and security use

-case

87%

79%

93%

79%

Identity

provisioning

Shared KYC

74%

77%

80%

74%

72%

Interbank clearing

and settlement

Monitoring cash

money supply chain

Trade finance

India Singapore Hong Kong

China

Organization of Eastern

Caribbean states

UK USCanadaSwitzerland

Sweden

France

Uruguay

Americas

Global

Americas

Global

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

…AND EXPLORE COMMERCIAL USE CASES

PLAY 2

Explore beyond Central Bank consortiums!

Identify opportunities in partnership with other banks, tech firms, and FinTechs

Or test DLT-potential beyond banking services!

▪ ANZ’s stablecoin is used in a pilot to digitize longstanding tax systems

for the alcohol and spirits industry.

▪ The stablecoin digitized the entire distillery industry along with

supply-chain automation.

▪ Provided ANZ with insights into the supply chain and created future

financing opportunities.

▪ Assisted the federal government in gaining tax revenues.

▪ Future potential to open new commodities markets and transform tax

and compliance systems

Traditional

systems

DLT space

(Hyperledger

Besu)

Physical

space

▪ Backed by 9 banks. Assists in digitizing paper-based letters of credit to reduce fraud and speed up document

turnaround.

▪ Reduce manual process from 5-10 days to 24 hours.

▪ Supported by 30+ financial services providers. Provides 360° visibility for complex supply chain transactions.

▪ Early payment options for every supplier for SMBs.

Partners*:

Trade Finance

Supply Chain

Note: Stablecoins are cryptocurrencies the value of which is pegged, or tied, to that of another currency, commodity, or financial instrument.

*Partner list is not exhaustive and firm logos are for representation purpose only

Excise event trigger

Analytics

(Inventory &

Financing)

Govt’s bank

Payer bank (ANZ)

Excise payment initiation trigger

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

▪ INNOVATION: Instantaneous settlement of cross-border payments, reduced risk, provides real-time transparency, and low operational costs

▪ INTERACTIVITY: Support advance payment types machine-to-machine payments using programmable money (smart contracts)

▪ INTEROPERABILITY: Support transactions across other Blockchain and DLT platforms, traditional non-DLT platforms, and legacy infrastructures

LEAD THE DLT-INNOVATION CURVE WITH NICHE

MARKET OFFERINGS…

PLAY 3

Embrace the “3 I’s” of DLT-based payments system

INNOVATION + INTEROPERABILITY + INTERACTIVITY

How is JP Morgan (JPM) creating value on its

Quorum platform?

How HSBC orchestrates payments through DLT-specific solutions and

partnerships?

HSBC FX Everywhere platform was launched in 2018

▪ Uses a shared permissioned ledger

▪ Has settled trades worth over $2.5tn using DLT

In 2021, partnered with Wells Fargo for settlement of matched foreign

exchange (FX) transactions

▪ Both the banks will use the shared settlement ledger to process

multiple currencies

In 2019, tied up with SWIFT and other banks to implement

Blockchain-based e-voting

Using Ethereum-based fully managed as-a-Service offering – Quorum

Blockchain for infrastructure

JP Morgan launched JPM Coin (token) in February 2019. The coin is used as:

Stable coins representing US$ pegged at 1:1 with the fiat currency

Utility token to provide benefits and access of JPM’s offerings to users

Privacy token to keep transactions anonymous on the network

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

BUILD A PARTNER NETWORK TO INNOVATIVELY MERGE DLT WITH

CURRENT SYSTEMS

Call to action: Active collaboration is required between Industry associations, regulators, banks, and tech sector to build the cohesive

roadmap to cross the chasm and drive mainstream DLT adoption

Decentralized future has its own challenges Collaborative approach for DLT scalability

OPTIONAL

Foundational partners

Blockchain platform with built-in

smart contracts

Industry partners

Pre-designed network to run

custom applications

Niche

partners

Unique

offerings for

specific use

cases

Banking executive POV SMB POV

Security Regulatory Technology

raised concerns around

AML and cyber frauds

are concerned about

cybersecurity issues

90% | 87%

76% | 58%

said unclear regulations

and lack of reporting

and auditing tools

said ambiguous

regulatory policies

87% | 81%

65% | 51%

said lack of

interoperable

infrastructure

highlighted fragmented

infrastructure

incompatible with

existing legacy systems

95% | 96%

67% | 51%

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

WORLD PAYMENTS REPORT 2022 IN NUTSHELL

“ENABLING BANKS TO SERVE BETTER THEIR SMB CLIENTS IN HEADWINDS TIMES”

RE-ALIGN

Your priorities with changing

SMB market dynamics to

build relevance

and growth

ASSEMBLE

a composable payments

platform powered by

harmonized data to elevate

SMB customer journeys

EXPLORE

Opportunities to augment

existing capabilities with

emerging

Distributed Ledger

Technology

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

OVERVIEW OF

CARDS AND

PAYMENTS

SOLUTIONS

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Value Added

Services

Process

Efficiency

Compliance

Core IT

upgrade

Payments

Innovation

End to End Services

▪ Strategy definition

▪ Operating Model

▪ Business Case design

▪ Platform selection

▪ Business Analysis

▪ Solution Architecture services

▪ Program and Project

Management

▪ Application Development &

Maintenance

Deliver

Customer Centric

Innovation

Protect

Revenues

Prepare for Future

Adapt to new

environment

Rationalize

Non - core environment

PaymentsCards

Common

SOLUTION OVERVIEW CARDS & PAYMENTS

Process-

reengineering

Payments

Analytics

Payment Hub

Implementation /

Connected

Payments)

Cash & Liquidity

management

Open banking (API-

fication)

Real time Payments

Virtual Account

Management

Platform Migration

ISO 20022

Adoption

EPI

(EU)

FinTech

Partnerships

DLT/ NFT

Adoption

Cloud Adoption

Modernization

Roadmap

Fraud

management

Assurance Services

Loyalty

management

CBDC

Payment

Orchestration

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

DEPENDING ON THE CARDS TRANSFORMATION APPROACH, CAPGEMINI

HAS EXPERTISE AND ASSETS TO ACCELERATE THE PROCESS

Cards Transformation Strategic Levers

Leverage

FinTechs

▪ Partner with FinTechs - Improved

turn around, better Customer

Experience, Quick Scale-up, Cost

optimization

▪ Migration to new age Cards

Platform

▪ Strategize and build a digital Cards

ecosystem - API, Microservices,

Cloud

Move to

New

Enhance

Existing

▪ Core modernization

▪ Digital - APIfication, Cloud, Analytics

▪ Platform/Portfolio consolidation

▪ Product launch

▪ Regulatory & Compliance

▪ Modernization Approach and Roadmap

▪ System/Domain APIfication & Open Banking

▪ Product portfolio optimization, design and strategy

▪ New-age features and technology integration

▪ Business process setup and optimization

▪ Personalized offerings, fraud analytics, enhanced

business intelligence

▪ Strategy, Consulting, Governance, Execution

▪ Target Operating Model definition

▪ Build and Integrate Applications with Cards Core

▪ APIs and micro-services architecture design

▪ Cloud enablement and integration

▪ Development and Testing

▪ DevOps / Agile Practices

▪ Fintech assessment, Applications evaluation

▪ Consulting and Strategy

▪ Primary focus areas – Customer Acquisition, Data

Analytics, Risk and Fraud Management, Loyalty,

Merchant Onboarding, PSP and Payment Gateway

Capgemini Suite of Offerings*

*Non-exhaustive list

Capgemini offers end to end services across the Cards Value Chain – Strategy Definition, Business Consulting & Analysis, Application

Development, Integration & Maintenance , Governance and Solution Architecture Services

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Address more

Customer ‘Contexts’

Improve

Capability

‘Readiness’

Fastrack

Payments on

‘Cloud’

Key payments transformation themes

▪ Expand Revenue orientation - API strategy & enablement

▪ Capture Digital contexts in commercial space

▪ Broad-base with Payments data / analytics

▪ Embed new / overlay services - own / source (e.g. Fintech)

▪ Standardize payments integration framework

▪ Address legacy limitations with Flexible architecture

▪ Overhaul Payments Controls mechanism and improve

resilience

▪ ‘Cloud’- ability of payments gateway services

▪ Mainstreaming Payments Data on cloud

▪ Enabling evolving Business models through cloud –

ecosystems / marketplace / Consortiums

▪ Fintech assessment, Applications evaluation

▪ Consulting and Strategy

▪ Primary focus areas – Customer Acquisition, Data

Analytics, Risk and Fraud Management, Loyalty,

Merchant Onboarding, PSP and Payment Gateway

Capgemini Suite of Offerings*

▪ Business / Partner / FinTech assessment

▪ API enablement Advisory services

▪ Payments Business Advisory services

▪ Payments Data Strategy definition

▪ DLT / NFT Advisory and PoC services

▪ Business and Target Operating Model definition

▪ Payments Hub Realization - Build-Buy approach

▪ Open Banking Solution

▪ Microservices adoption framework

▪ End-to-End ISO20022 migration

▪ Alliances with tech players, platform providers

▪ Payments services Cloud enablement for banks

▪ Migration of Workflow optimized for cloud

processing

▪ SWIFT Services Bureau for ISO20022

enablement

CONNECTED PAYMENTS OFFERING ADDRESSING KEY ELEMENTS OF

PAYMENTS TRANSFORMATION

*Non-exhaustive list

CAPGEMINI SUPPORTS BANKS IN RE-GANING THE LEADERSHIP in payments, generating the efficiencies and flexibility needed to compete in the new landscape. We

do this by MODERNIZing the TECHNOLOGIES, DATA & insights CAPABILITIES and STREAMLINing the related OPERATIONS.

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

CAPGEMINI OFFERS OPEN BANKING CENTRE OF EXCELLENCE TO

ACCELERATE ADOPTION AND REALISE TRUE POTENTIAL

Thought Leadership

Recognized by clients and analysts

Marquee Clients

Key solutions

Alliances &

Product CoE’s

Tool kits & Benefits

TALENT POOL

200+ Open Banking professionals

50%

Accelerated

implementation

Prioritization of

Business use cases

based on revenue and

adoption potential

De-risk regulatory

compliance

Ready platform for API

monetization

opportunities

80%

Reduced testing efforts

in UAT

Strong thought leadership in Open Banking

Leader in

2018 & 2020

Open

Banking

Everest

Peak Matrix

Testimonial

by BOI Group

CTO

IP registered platform with 2M API calls in production currently deployed at two banks

Strategic

roadmap

Developer

Portal

Data

strategy

Security

Profile

Use case

definition

Consent

Mgmt.

Data In

Design

Automated

testing suite

Sandbox

IDAM

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

OUR OFFERINGS ARE MATURE AND ARE DELIVERING

VALUE ON-THE-GROUND

Cards

Payments

Open Banking

Wins in the

last 12-18

months

Foundational

Wins / Anchor

clients

Migration : In-house Cards platform to Fiserv Optis

Platform

Private label and co-brand card migration engagement

for 45m+ cards and end-to-end ownership of Migration -

Leading NA Card Service Provider

Migration : Migration from Mainframe to New age

Cards platform - Large store card portfolio migration

program - Capgemini was involved in Migration

roadmap, strategy definition, business functions

development & support (SI Partner) and Cards Domain

Testing - Large NA Investment Bank

Migration : Cards Portfolio migration to TSYS

Platform - Consumer and Commercial cards migration -

customized approach to re-design operational

processes, interfaces with new platform – NA Unit of a

Global Bank

▪ Bank of Ireland - platform upgrade and

extension

▪ ANZ - PoD based delivery OB security and

surrounding developments

▪ First Abu Dhabi Bank, UAE

▪ Equifax, AU

▪ Akoya, US

▪ Saudi Payments DIP

▪ Large APAC bank – 4

consecutive multi-million

Dollar contract renewal for ADM services.

▪ Global Bank – Deals signed for co-creation of a new

age Cards platform and new scheme product launch

in addition to existing ADM services.

▪ Large prepaid issuer in NA region – New deal for

ADM services for prepaid cards business

▪ Payments Hub solution enablement – Global

Japanese Bank, Global EU Bank , UAE based Bank,

UK Bank with APAC / MENA focus

▪ Payments Hub Integration and platform

development - Global UK Bank and Leading

Australian Bank

▪ Transformation Consulting - Boutique Saudi

Commercial Bank, Leading Pilipino bank, Leading

ME bank, Global UK Bank, Leading French Bank

▪ CBDC interoperability – Leading Payments

Network Provider

▪ Non-Fungible Token (NFT) for artifacts : Large

Central Bank in Middle East NFT POC (ongoing)

▪ Microservices based payments platform

enablement : Global UK Bank, Leading Australian

Bank

▪ Payments Hub implementation : Leading Middle

East Bank, Leading Pilipino bank

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

MARKETING PLAN

AND DELIVERABLES

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

WORLD PAYMENTS REPORT 2022

KEY DATES, ASSETS AND CONTACTS

Launch Campaign

October 6

and like & share the WPR messages

Sibos 2022 (Oct 10-13)

Meet the Expert session - Oct 11

Finextra campaign

Oct - Nov

Schedule your own local or account-

based event!

Report PDF & charts

Press release

Report abstract and Thought map

Infographic

WPR microsite

Launch social media package

Global client presentation deck

Headers, Email signature, Digital Ads

Launch email

Targeted paid LinkedIn campaign

Marketing Assets

Place a print order

via the Online Tool

Contact our World Reports

marketing team to schedule your

local event or for any WRs

marketing or PR-related question

Designate your local

spokesperson on our Online

Tracking Tool

Contact the Marketing

Operations team if you need

assistance to leverage email

campaigns on Pardot

All assets will be available on KM3.0

https://km3.capgemini.com/asset/1124950

Launch Date

October 6, 6 am CET

Print reports available

by October 21

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Engagement

September October November December

External

Campaign

Awareness

Asset Creation

Content

Email campaign ( WPR, short-form articles, client video)

Oct 6

WPR

Oct ( Finextra)

Article - SMBs

Oct 10-16

OOH advertising

Organic social media ( event participation, WPR and for each article/ blogs)

Earned media (report press release)

Internal mobilization

Sales

enablement

Sales comm on release of each short-form article along with

sample social msgs.

Oct 10-13

Sibos 2022

PACE and growth account presentations, account-based advertising

Creating awareness and engagement with clients & prospects

CAMPAIGN TIMELINES

Nov

Short-form article

- DLTs

Oct - Nov

Finextra campaign

Sep

CBDC PR

Paid social

Sep 22

WPR briefing and sales enablement

session

SIBOS sales mobilization

Sep

PoV with MS

Capgemini World Payments Report 2022 | Sales Enablement Session Deck | Sep 2022

Q&A SESSION

This presentation contains information that may be privileged or confidential and

is the property of the Capgemini Group.

About Capgemini

Capgemini is a global leader in partnering with companies to transform and manage their

business by harnessing the power of technology. The Group is guided every day by its

purpose of unleashing human energy through technology for an inclusive and sustainable

future. It is a responsible and diverse organization of over 350,000 team members in

more than 50 countries. With its strong 55-year heritage and deep industry expertise,

Capgemini is trusted by its clients to address the entire breadth of their business needs,

from strategy and design to operations, fueled by the fast-evolving and innovative world

of cloud, data, AI, connectivity, software, digital engineering, and platforms. The Group

reported 2021 global revenues of €18 billion.

Get The Future You Want | www.capgemini.com