There are significant regional differences in payment channel usage across Europe and North America and contrary to popular belief, “adoption rates among these newer channels are more nuanced.” Historically all commercial banks have leveraged a combination of payment methods to transact with their partners and suppliers but the integration of a new form of payment cannot be done as efficiently as the method itself. “As a result, while newer ‘better’ forms of payment may be available to businesses, older legacy payment tools typically offer a well-established level of functionality, hold wide acceptance rates, and are already integrated into payment workflows and payables processes,” the report reads. Key market drivers have impacted global payments transformation and trends; Slabicki provided his view on why no single payment mechanism will sweep the market. Regulatory pressure is rising - “There is a tremendous amount of new risk and fraud mitigation tools that banks are implementing to help keep their customers safe, this is true with legacy payment methods such as cheque or even ACH in a lot of cases, while it’s embedded in the design of some of the newer payment systems, whether it’s instant schemes or digital wallets. Complementary risk and fraud services are front and centre to a bank’s offering because regulatory pressure is rising.” Payments competition is rife - “Competition always sparks innovation and forces us and other market participants to do more, to do better, to do it faster. Competition is really hitting the accelerator button across the industry and all these regions. It’s more players entering the competitive landscape. It’s not just traditional banks, it’s payments service providers. You even see retailers and merchants looking to offer financial services in certain markets, because they have a well recognised brand or a good infrastructure that can reach a lot of the individuals or businesses that they serve. That also means there’s more opportunities for collaboration. There’s so much going on that the challenge within this market is really prioritisation.” Innovation is running high - “There’s a ton going on within instant schemes, within digital wallets and the card rails continue to reinvent themselves and find different ways to leverage their legacy rails or reinvent some of their current capabilities to serve the new landscape. The trick here is to have subject matter experts that know the business inside and out, have their pulse on what’s happening across the industry and having a ruthless prioritisation about what you want to do. If you’re going to do something, you need to be all in and do it really well.” Legacy payment methods remain - “I don’t see this changing at least within the North American market for quite some time because I don’t see a hard mandate that cheques are going to get eliminated. This is more of a market driven culture which means that we are going to have to support cheques and cash in some of these legacy payment mechanisms into the future, until the value proposition is big enough for the businesses or the consumers, and that behaviour ultimately changes.” Established payment tools are the most used in North America, with 76% of survey respondents having used cheques in the last 12 months; 73% using ACH/EFT; 68%, corporate cards and 67%, purchasing cards. According to Slabicki, “data will be a core piece of the challenge of addressing the migration away from cheques, especially within the US market. When I look at business cheques - businesses paying each other for invoices, suppliers, etc. - the main driver for why cheques are so prevalent in the B2B pace is because there’s a lack of a common definition of the data that needs to go back and forth between the business partners so that they can understand what is being paid.” The lack of standardisation around the data that is required for invoice detail must be reconciled before emerging payment methods can sweep the market. The report expands on this point: “Many of the established electronic payment methods can suffer from relatively slow clearing and settlement times of several days, or can have a high cost per transaction, such as per cross-border payment, or interchange rates for commercial cards.” The report continues: “Emerging payment methods, by contrast, are all characterized by significantly higher levels of speed, efficiency and data richness. Data richness is critical as payments become more embedded into a host of new services and platforms, and it can drive significant efficiencies for corporate and business users.” Analysis also reveals that there are disparities between countries within the same region. Digital wallets are used by 65% of US corporates in comparison to only 39% of Canadian organisations. In a similar vein, while 79% of German respondents have made a cash payment in the last 12 months, only 32% of French companies have. In a concluding statement, Slabicki pointed out that while we as an industry can anticipate growth in overall use of all payment methods by commercial banks in Europe and North America, one solution will not meet all needs and a holistic approach is required. “Depending on the business, who their business partners are, who their customers are and in which market they operate, one organisation’s optimal model is going to be different to anyone else’s. It’s going to take active management as a lot of these networks are very new, but a lot of them are maturing rapidly. A lot of them are inventing themselves as they go. The question for businesses within the European and North American region is: do they need to, or do they want to hire [people with] the skill set to actively manage this evolution as new and emerging models continue change?” Key findings of the survey include: • In North America, and Europe and the UK, digital wallets are expected to see the most growth in the next 12 months. • Among non-users of cryptocurrencies, only 7% of European businesses and 10% of North American businesses intend to utilise them in the near-term. • 67% of European corporations surveyed are using instant payments, compared to 46% of corporates in North America. • 86% of European and UK non-users of instant payments note that they have some level of interest in using the transaction method in the next 12-24 months, with 68% of non-users in North American in the same camp. • 76% of North American businesses have used checks in the last 12 months, compared to 61% in Europe.