Both experts discussed the biggest shifts expected in merchant payments over the next five years. Buračienė anticipates improvements in transaction processes, focusing on seamless user experiences and enhanced checkout flows for e-commerce, rather than a radical overhaul. Kraal agreed, adding that a significant shift will involve newer payment companies gradually replacing older, legacy backend payment infrastructures that struggle to keep pace with innovation. Both payabl. and Silverflow aim to be at the forefront of this modernisation, providing more flexible, data-rich systems that offer better user experiences and more comprehensive data analysis tools.
The discussion then turned to the future of physical cards in the age of digital wallets. Buračienė stated that cards will remain necessary in the foreseeable future, as most digital wallets outside Asia are still funded by cards. She highlighted that cards offer unparalleled security for consumers through robust chargeback processes, a feature largely absent in increasingly popular account-to-account payments. Kraal concurred, suggesting that while plastic cards might be used less, the underlying card networks (Visa, Mastercard, etc.) will persist as global, efficient payment access points due to their immense reach and established infrastructure. He humorously indulged the host’s preference for carrying a physical card as a backup, noting that consumer preference and adoption remain crucial for any payment method’s success.
Moving to account-to-account payments, Kraal explained that their success in competing with cards at scale depends on regional context and consumer adoption. He argued that in markets with established, convenient payment methods like the Netherlands’ iDEAL, account-to-account payments face an uphill battle. While they offer benefits to retailers (e.g., lower costs), the challenge lies in convincing consumers to change their ingrained payment behaviours, especially given the current lack of robust dispute processes. Buračienė reiterated the critical importance of a well-defined dispute process for account-to-account payments to truly rival card networks. Both acknowledged that introducing chargeback mechanisms would inevitably increase the cost of these payments, a key advantage they currently hold.
On the topic of regional fragmentation versus global standardisation in payments, Buračienė predicted that fragmentation would continue due to the vastness of the global market and diverse payment options. She stressed that global merchants must still work with providers that can cater to various local market intricacies. Kraal reinforced this view, emphasising the difficulty of altering ingrained consumer payment behaviours, especially in mature markets like Europe or the US, where existing payment methods are generally satisfactory. He cited Pix in Brazil as an example of rapid adoption in a market with previously poor payment user experiences, contrasting it with the slower adoption of new methods in saturated markets.
Finally, the conversation addressed the impact of AI and regulation on payments. Buračienė, while not an AI expert, views AI as a significant disruptor with many potential applications in payments, particularly in fraud prevention and operational efficiency. She noted that machine learning is already widely used in fraud monitoring and expects substantial improvements as fraudsters become more sophisticated. However, she expressed reservations about an immediate, widespread AI-driven payment ecosystem within the next five years due to regulatory, security, and safety challenges, especially for regulated financial institutions handling third-party funds. Kraal largely agreed, stating that AI’s impact on core payment processing, bound by strict rules, would be more in optimising adjacent processes like fraud management, conversion optimisation, and scheme fee calculations. He highlighted Silverflow’s focus on providing high-quality, transparent data to enable customers to train AI effectively, contrasting it with the “black box” nature of many legacy platforms. Regarding regulations like PSD3 and the AI Act, Buračienė stated that PSD3 primarily focuses on improving transaction security and safety. Kraal added that while Silverflow helps its regulated clients comply, their own business model is not directly regulated in the same manner. Both agreed that PSD3 is an iteration aimed at creating a smoother and safer payment environment for consumers.
