Keeping pace with the rapidly changing payments landscape

Over the last couple of months we have invited you to explore some of the key trends shaping the future of payments in Australia – including real-time payments, super apps and the evolution of payments acceptance. In this last episode of our four-part blog series, we take a closer look at how the phenomena of Payments Orchestration and Platform-as-a-Service are trending in response to the demands of our rapidly changing payments landscape.

But before we get started, let’s shed a light on what the two terms, Payments Orchestration and Platform-as-a-Service mean.  

• Payments Orchestration is the art of bringing multiple payment related services together to deliver a seamless payments experience. This process typically covers several payment service providers and spans from payment authorisation through transaction routing and settlement.
• Platform-as-a-Service is a computing model where a third-party vendor provides technology that allows a business to focus on their core value-add rather than investing time and effort establishing underlying infrastructure and services. Platform-as-a-Service exists in several forms, but it’s increasingly often available as a cloud-based service. In some cases, adopting Platform-as-a-Service can result in cost efficiencies and/or improved time to market.

Historically, large banks used to be cautious with cloud-based services – primarily due to the large amounts of sensitive data they hold and the trust their customers instilled in them to keep it safe. But the wind of change is blowing. Over the past 5 years, the Platform-as-a-Service model has not only grown exponentially, but also has proved itself as a reliable toolkit, which is enabling the rapid delivery of innovative solutions.

Fintechs were amongst the first organisations to embrace these tools – with fewer customers and limited reputational risk, these businesses have been able to demonstrate an agility that the large market players could only dream of. But this advantage is fading away, as larger banks are now also turning to cloud-based solutions to keep up with their fledgling competition.

• In 2019 we saw Westpac partner with 10X to leverage their cloud-based banking platform for their Banking-as-a-Service model. More recently, Westpac announced they would also leverage 10X to facilitate institutional banking more broadly.
• In 2020 CommBank CEO Matt Comyn announced the bank was going to increase its public cloud use from 25% to 95% – calling out high availability and resilience as key drivers for the change.
• In 2021 NAB announced the successful migration of their business bank platform to Amazon Web Services – sighting reduced maintenance time, operational efficiencies and improved agility.
• ANZ recently provided an update on its ANZx transformation program which is based on two core principles – cloud first and application programming interfaces (APIs).

It’s clear that there is a shift underway in how we think about, design and deliver our payments technology – and it is being driven by competitive forces. I spoke to Endava’s Chief Catalyst, Matt Cloke to hear his thoughts on what is shaping modern architecture.

“Cloud based solutions not only revolutionised the use of compute but put ways of working squarely in the focus of organisations. Agile teams, that are leveraging the cloud are able to rapidly build, deploy and iterate products, thanks to gaining feedback from the marketplace quicker than most traditional organisations that did quarterly releases. At Endava, we’ve helped many organisations take advantage of this new paradigm, placing the experience of end users at the heart of everything that is delivered.”

Conclusion

Business leaders used to develop their industry experience, skills and careers when technology upgrades occurred once every 5 to 10 years. However, a new competitive front has opened in the payments industry – with the necessity of constantly adapting to the newest trends, the way we approach technology has changed. Leaders in the field are leveraging cloud-based services and persistent teams to deliver iterative changes rather than costly monolithic upgrades. This shift is compounded by changing consumer expectations in relation to digital services.

In the past technology used to support the payments business – but today technology is the payments business. Consequently, we experience a challenging transition on several levels. This is why so many leaders in the payments industry have chosen to partner with experienced technology providers who can help them deliver working software at scale.

In this series of blogs, we’ve looked at the imminent trends set to shape payments in Australia over the next five years. Is your business ready for this change?