By Robert Marchiori, CEO of Cognizant Australia
Alternative payment methods (APMs) have not just changed how we pay; they have rewritten and continue to rewrite the very definition of money itself. Physical cash is set to be one for the history books and the use of physical credit and debit cards are declining, paving the way for APMs which are evolving at an unprecedented rate in the wake of the global AI revolution.
Here in Australia, the swift transition towards a primarily cashless society, barring some members of the more remote population, positions the country as a global leader in digital payments, with cash payments dropping from 68% in 2007 to just 13% in 2022 – according to the Reserve Bank of Australia’s (RBA) latest report on Australia’s access to cash. This shift has not happened by chance, with the government supporting this change investing in digital payment infrastructure, including New Payments Platform (NPP) and ISO 20022, a global messaging standard set to be adopted by over 70 countries, including UK, US and India by November this year.
So, what’s driving this rapid shift, what are the barriers for businesses trying to stay ahead of AI advancements and how can we combat these challenges?
Faster, better, stronger. Digital natives are demanding more
The real drivers of this shift? Gen Z.
With 79% of Gen Z consumers avid APM users, according to Pymnts Intelligence study, most of this generation don’t know a world in which digital wallets, Buy Now Pay Later (BNPL) services, and cryptocurrency, do not exist. For Gen Z, these aren’t emerging innovations, they’re expected payment tools embedded into their everyday lives.
This means, Gen Z are accustomed to increasing speed, simplicity and reliability from their payment methods, and the expectation in continued rapid transformation only increases. Gen Z are constantly demanding more from businesses and why shouldn’t they? It’s all they’ve ever known.
If your consumers are evolving, your systems must evolve with them, not just to meet current expectations, but to anticipate what’s next.
That’s where AI comes in.
The rise of AI has been coined as the ‘New Enlightenment’ and is transforming consumer expectations across the board, and agentic AI is the latest evolution of this. Unlike traditional AI systems that simply respond, agentic AI goes beyond, suggesting, acting, and even solving problems independently. We’re moving into a world where AI will turn conversations into conversions, delivering faster, frictionless payments and more personalised customer experiences. Exactly what our consumers are looking for.
For all my time in the banking industry, AI agents represent the most rapid technological shift we’ve seen in years and will be foundational to the future of finance in Australia. Their ability to handle micropayments, manage tokenised services, and automate transaction flows will be critical to staying competitive. And unlike conventional chatbots, these systems use machine learning and natural language understanding to adapt in real time, delivering both speed and reliability.
Agentic AI will redefine payment processes, enhancing what was once a simply functional transaction to a seamless conversation, in which the agents will learn and adapt to the customer’s preferences, to anticipate the customer’s needs before they even realise it themselves.
Failure to adopt AI at scale will risk businesses being left behind and unable to keep up with rapidly increasing consumer expectations. So how can the payments industry leverage this effectively?
Finding the humanity in automation
It would be easy to assume that the more we automate, the less need there is for human involvement, but in reality, automation makes human oversight all the more important. As AI takes a more active role in the financial industry, instilling trust and transparency is critical in its implementation.
I’ve seen how agentic AI can unlock significant potential. It enables systems to act on behalf of users, not just make suggestions. But with this capability comes risk. When AI makes decisions, like transferring funds or approving claims, the room for error shrinks, but accountability becomes critical.
Ultimately, success isn’t just about technological capabilities, it’s about establishing a solid groundwork and nurturing the people around it for it to be leveraged in the right way. This means investing in the right infrastructure to support with use of AI, upskilling people to understand it, trust it and use it effectively and providing the right governance for ethical and responsible implementation.
Human oversight plays a vital role in ensuring AI decisions align with legal requirements, organisational values, and customer expectations. This isn’t just about managing systems, it’s about building a culture of responsible AI, where technology and human judgment work hand in hand.
It’s time to build for what’s next
Adoption of APM alone isn’t enough moving forward. To stay competitive, businesses must design for speed, efficiency, and adaptability, building systems that can meet customers where they are, and where they are going. The next chapter of finance won’t be written by those who wait and see, it’ll be led by those who act. Now is the time to invest in AI by laying the right foundations first, rethink payment strategies, and prepare for a future that’s already here.
