Banking
Was 2021 the year of the new normal for payments?
Published by Jessica Weisman-Pitts
Posted on February 8, 2022
5 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on February 8, 2022
5 min readLast updated: January 28, 2026
2021 saw a major shift towards digital payments, with contactless and virtual cards gaining popularity, particularly in APAC and MENA regions.
By Abdeslam Alaoui Smaili, CEO of HPS
Looking back at 2020, the world has been shaken by global events that made the pre-covid era seem unattainable ever again. However, since 2021, a transition to a new type of normal has been emerging and allowed individuals and companies to reinvent themselves.
Indeed, digital developments are increasing consistently, and the pace of change in the APAC and MENA regions brings many angles under focus. Regions have individual cashless initiatives in train, and the increasing number of collaborations between financial institutions, telcos, FinTech’s, digital finance start-ups and policymakers has been unprecedented.
We’ve taken a look back over the past 12 months, and we’ve identified the three main changes to the payment industry:
Heading into 2022, several ongoing trends in the payments landscape have emerged. Notably, there has been a considerable rise in contactless payments and the use of virtual cards. Non-cash payment has become a primary focus of innovation in digital banking transformation. The last two years have seen everyone, from Apple to Facebook, attempting to enter the market.
Concerning the APAC region, according to “The next wave in payment technology” whitepaper, its payments industry has outpaced all the other regions over the past decade. This region is also one of the largest contributors to global payments revenue, generating approximately $630 billion in 2020.
On the other hand, the MENA region is also taking advantage of this new market opportunity as major banks have launched digital banks that operate in sync with their conventional retail divisions.
In line with their efforts to offer digital-first consumer journeys, HPS customers have leveraged our platform to launch innovative products such as virtual cards where a consumer can apply and receive a digital card instantly. The card is ready for immediate use and can be added to support digital wallets such as Apple Pay, Samsung Pay, for in-store payments and ATM and NFC withdrawals.
Also, with many banks wanting to offer a more contact-free and secure experience to their consumers, many have launched a QR withdrawal service where a consumer can withdraw cash simply by scanning a QR, and in turn avoid any physical contact with the ATM.
The Aite-Novarica Group and HPS paper highlighted also how multiple other digital innovations of the payment industry are also taking over – Mobile money and how it has changed the face of Africa. This innovation, along with a Mobile Money Interoperability model, are creating new pathways to an improved standard of living across the Africa. A good example is the Mobile Money Interoperability (MMI) initiative in Ghana.
As a result, banks and financial institutions are facing multiple challenges in terms of digital innovation in order to satisfy demand. However, one main solution remains: partnerships and collaborative approaches with FinTech’s and technology solution providers, to leverage the latest technologies for modernising their payment platforms.
Market dynamics and infrastructure vary greatly per country and region, but the direction of innovation and change is converging on the same outcome: digitalisation and cashlessness.
According to HPS study with Finextra, reasons for the transition away from cash and towards digital include:
The adoption of modernised technology and the ongoing COVID-19 pandemic that has further accelerated the adoption of digital modes of payments.
As a result, while cash payments have traditionally dominated the Middle East region, there has been a steady shift towards digital payments as end customers expect this mode to be more flexible, simple, efficient, customer centric and instant. As seen on the “Building a future ready payment platform” whitepaper, the Middle East digital payments market is expected to register an estimated CAGR of 5-6% for the period 2021 – 2025.
That being said, HPS collaborative study with OMDIA showed that digital payments will continue to take share from plastic cards with digital wallets increasingly being adopted. New payment methods such as buy now, pay later, account-to-account and QR payments are becoming mainstream as well as the emergence of cryptocurrencies and Central Bank Digital Currencies.
Additionally, the transition from traditional payment methods to new digital solutions, and the need for technological innovation in the payment industry, can be explained by the unprecedented growth in e-commerce.
As highlighted by OMDIA, COVID-19 has accelerated consumer demand for online shopping as many new, mainly small, businesses traded online for the first time. E-commerce increased in importance for more than two-thirds of retailers, particularly for those forced to shut stores during lockdown.
Consequently, digital expectations will continue to change at a rapid rate and a modern issuing platform is essential to provide the capability to easily build new products/services and rapidly deploy at scale, to ensure issuers can keep pace with consumers’ demands.
The article discusses the shift towards digital payments in 2021, focusing on contactless and virtual card adoption.
APAC led in payment revenue growth, while MENA embraced digital banking innovations.
Key trends include the rise of contactless payments, virtual cards, and mobile money solutions.
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