The way individuals and businesses exchange value is undergoing a fundamental shift, driven by technology, regulation and changing customer expectations. From our work in this sector, we have developed a deep understanding of citizens’ relationship to money, their expectations when it comes to payments and the challenges when it comes to changing behaviours.
Chapter 1: Secure technology, insecure citizens.
Digital payment ecosystems are coming whether we like it or not. But success in digital payment ecosystems will be dictated by those who can design them in a way that can convince citizens and customers that this world is more, not less, secure, and just as simple. For now, any benefits of the digital payments’ world are outweighed by concerns about safety and security.
At the core of citizens’ payments needs is the competing tension between simplicity and security. Like a set of scales, different initiatives tip the balance one way or the other.
Fundamentally, you can trace payment ease and simplicity across time, right back to money’s origins. Physical money replaced the exchange of goods because it was more convenient, and incremental improvements have occurred since – from coins and notes through to cheques, cards and more recently contactless payments. The next big shift is the provision of a digital currency, to match citizens’ move towards online shopping. Nigeria have already established the eNaira, their digital currency, and 49 other digital currencies are being piloted. The private sector is driving changes to payments too: neobanks are sidestepping regulatory burdens and focussing on customer-centric experiences such as Monzo’s “Nearby Friends” feature; and third-party vendors like Klarna are embedding financial services seamlessly into everyday transactions. These are the first steps in what will ultimately become a bigger shift in the way we make payments. But what do customers actually want?
First, it needs to be simple. Customers adopt new payment methods not because they are revolutionary, but because they’re easier. Take contactless payments as an example. From our work in understanding payment behaviours, we know the three most important benefits to customers were all factors driven by convenience: the speed of transaction; no PIN-entry requirement; and accessibility.
But as part of Yonder’s testing of the EU digital identity wallets – an identity ecosystem for the EU’s 450 million citizens – we identified one of the most desired benefits for citizens was counter-party verification. In other words, making sure the business, retailer or person you are buying from is a real entity. Here there are clear security benefits: citizens can be confident they are avoiding scams and fraud by purchasing from a trusted supplier.
One of the fundamental tenets of EU Digital Identity Wallets is that they will provide greater security for citizens, yet our testing revealed they do not reassure citizens about online safety. Many remain uneasy about moving payments and ID documents into the digital realm, citing Big Tech’s data practices, rising cyber threats, and the risks of consolidating everything on a single device. Similar concerns appeared in our work looking at payment patterns, where trust falls sharply for larger transactions.
The balance currently points to security fears outweighing convenience in the online sphere. And this points to an opportunity for businesses: to profit where security concerns may exist by helping citizens more easily navigate the digital world of payments. Through time, security has always been a concern when it comes to money, often mitigated by symbols and techniques. For instance, watermarks are used on bank notes and trustmarks on payment cards. But what could be the verification symbol of the future? And what forms of user experience would truly reassure citizens?
The gap is widening between the reality of what the technology will provide (greater online security), and citizens’ perception of the technology (lack of online security). In time, we will see how governments, and companies, respond in trying to fix the disconnect and convince citizens of the necessity of new tools like digital identity wallets or digital currencies and the security they offer in the face of AI and disinformation. This change will not happen overnight, but the rapid pace of technological change is putting increasing pressure on governments and businesses to act now.
Chapter 2: Rethinking value in money’s new ecosystem
If, as we’ve put forward earlier, a customer’s relationship towards payments is a constant trade-off between simplicity and security, changing channel dynamics will add greater weight to the convenience side of the scales. The emergence of Agentic AI is the biggest channel shift we have seen since the advent of Google. OpenAI’s integration of product purchasing through ChatGPT is a bellwether. Payments are no longer the final step: they’re embedded in the journey. AI agents can compare options, trigger purchases, chase refunds, and even potentially in the future act as personal financial advisors, all without the citizen ever opening a website.
This channel shift will signal the arrival of new commercial opportunities. Already the value chain is changing:
- Product visibility will no longer depend on SEO, but on how well data is structured to serve AI agent decision-making.
- Customer experience won’t just be designed for humans but also for the AI agents representing them.
This emerging value paradigm is already giving rise to new business models. A clear signal of this shift is Amazon’s “Buy for Me” prototype: an AI agent designed to search the wider internet for products not available on Amazon. This marks a significant departure from Amazon’s long-standing strategy of keeping users within its tightly controlled ecosystem. The fact that Amazon is willing to breach its own walled garden underscores the strategic importance of agentic-AI and the data they generate.
When it comes to customers and businesses capturing the new value on offer, we know that a one-size-fits-all approach doesn’t work. Attitudes toward technology and payments vary significantly across countries and among individuals. To succeed, businesses must recognise and respond to these differences, identifying the pockets of value that stem from the diverse perspectives and behaviours. A simple articulation of the different opportunities may look something like this:
- Digitally insecure citizens: providing additional layers of security that mitigate concerns and help those that are wary to still benefit from the burgeoning opportunities. As an example, 30% of 65+ citizens in the UK live alone, so a device could be designed to be both a companion and a digital guardian.
- Cautious but curious citizens: hybrid solutions will evolve that offer efficiency alongside assurance. Features that offer low-risk, incremental steps and gradual adoption allows them to integrate digital payments.
- Early adopters: opportunities here will be about spotting and filling the gaps in the emerging ecosystem. For instance, responding quickly to how Agentic AI scrapes the internet when performing shopping missions. Already through analysing shopper journeys, we’re seeing this changing behaviour in action.
Will any security concerns be sidelined when the convenience benefits are more revolution, not evolution? Or does the idea of handing over purchasing decisions to AI agents provoke more unease than excitement?
As this shift takes place, businesses must design with diverse customer mindsets in mind. Truly understanding your customers allows you to create targeted, scalable solutions that capitalise on specific aspects of citizens’ nuanced attitudes and behaviours.
In the final chapter, we’ll turn the lens on ourselves. What do these changes mean for citizens? How do they affect our trust in the systems meant to protect us? And what can governments do to safeguard privacy and restore public confidence?