Payments in Retail: What Leaders Need to Know

Payment modernization is becoming time-sensitive because regulatory, commercial, and consumer pressures are converging at once. According to KPMG, fully unstructured address data will no longer be allowed in international payments from November 2026, and KPMG describes that deadline as a strategic forcing function for banks and corporates to improve data quality, reduce friction, and strengthen resilience. That makes ISO 20022 readiness less of a back-office formatting project and more of an operational priority tied to cross-border payment reliability. At the same time, the scale of digital payments has made incremental inefficiency harder to ignore. AOL.com reports, citing the 2024 McKinsey Global Payments Report, that the payments industry processed 3.4 trillion transactions and generated $2.4 trillion in revenue in 2023. In a market operating at that volume, better data, automation, and orchestration can have material effects on cost, speed, exception handling, and customer experience. AOL.com also notes, citing the 2025 McKinsey Global Payments Report, that agentic commerce is expected to be a major force reshaping payments over the next five years, adding urgency for payment systems that can support more automated, intelligent transaction flows. Consumer expectations add a third reason to act now. Retail Technology Innovation Hub reports, citing The Payments Association’s 2026 Consumer Behaviour Survey, that 70% of Brits believe both cash and cashless payment options should remain available. Buyers therefore need modernization strategies that advance digital capability without narrowing payment choice. Cash is becoming less of an everyday default, but it is not disappearing from the UK payments landscape. According to Retail Technology Innovation Hub, citing The Payments Association’s 2026 Consumer Behaviour Survey, 70% of Brits say it is important that both cash and cashless payment options remain available. That finding points to a more nuanced shift than a simple move from notes and coins to digital-only commerce: consumers increasingly treat cash as a fallback that protects choice, inclusion and resilience, rather than as their primary way to pay. The usage data reinforces that split. Retail Technology Innovation Hub reports that 28% of surveyed consumers use cash at least weekly, while 40% use it less than monthly or never. At the same time, only 10% of UK consumers use cash as their primary everyday payment method. In practical terms, cash remains relevant enough that retailers, service providers and public-facing organisations cannot ignore it, even as fewer customers rely on it for routine transactions. The leading everyday methods are now digital and card-based. Mobile wallets are used as the main everyday payment method by 26% of UK consumers, matching contactless debit cards at 26%. That parity shows how quickly wallets have moved into mainstream behaviour, but it also underlines that the market is not converging around a single payment rail. Emma Banymandhub, CEO at The Payments Association, said UK payment habits are evolving quickly and not necessarily following the expected digital takeover trajectory. The trend, then, is hybrid payment expectation: consumers are adopting mobile and contactless tools, while still wanting cash access preserved for moments when digital payments are inconvenient, unavailable or unsuitable. Alongside that hybrid consumer expectation, the infrastructure behind payments is shifting from isolated payment methods to multi-rail payment infrastructure. Real-time settlement networks, digital wallets, QR systems, and local bank transfers did not evolve as one unified stack; they developed separately. The next phase is about making those rails interoperable so money can move across channels with less friction. According to AOL.com, this interoperability is becoming central because the future of payments depends on connecting real-time settlement, digital wallets, QR rails, and local bank transfer systems rather than treating them as separate options. That matters because payment speed is becoming a baseline expectation, not a premium feature. AOL.com reports that McKinsey estimates instant-payment transactions in the EU will rise from around 3 billion today to nearly 30 billion by 2028. That scale points to a market where instant settlement is no longer a niche banking capability; it becomes part of the default operating environment for merchants, platforms, and consumers. The same pattern is visible in QR adoption. QR codes have grown fastest in mobile-first markets such as India, Brazil, and Southeast Asia, where payment adoption outpaced legacy card infrastructure. But the deeper story is not QR alone. As Ran Hammer, Chief Business Officer at Orbs, put it in AOL.com, direct payment is the core adoption story, and emerging markets moved faster because they had no card infrastructure to protect. The result is a payments landscape where buyers should expect more hybrid models: real-time transfers, wallets, QR acceptance, bank-to-bank payments, and AI-enabled commerce working together. Alicia Kao, Managing Director of KuCoin, described the next decade as one defined by multi-rail infrastructure that combines real-time settlement, digital wallets, QR payments, local bank transfers, and AI-driven commerce. In practical terms, the winning payment systems will not be the ones tied to a single rail, but the ones that can route value across many rails reliably. The next major shift in digital payments is not just a faster checkout button or a new consumer wallet. It is the emergence of AI agents and machines as active payers. According to AOL.com, Michael Heinrich, CEO of 0G Labs, described the biggest payments shift over the next decade as a new payer: machines or AI agents rather than people using a new interface. That changes the design requirements for payment infrastructure because the transaction may be initiated, evaluated, and completed by software acting on behalf of a user, business, or workflow. AOL.com reports that the 2025 McKinsey Global Payments Report identifies agentic commerce as a major force reshaping payments over the next five years. In practical terms, this pushes payment systems toward verified machine identities, auditable transaction trails, and rules-based authorization. AOL.com notes that 0G Labs has built settlement infrastructure for AI agents in which each agent carries a verified digital identity and each transaction leaves an auditable record. Programmability is central to this model. AOL.com defines programmable conditions as payments that trigger automatically when a defined rule is met, without manual approval at the point of transaction. That could support machine-led purchasing, autonomous service consumption, or conditional settlement between software systems. It also raises the bar for uptime: AOL.com states that AI agents need around-the-clock payment availability because they cannot wait for next-day settlement windows or business-hours processing cycles. The result is a payments environment built less around human checkout sessions and more around continuous, automated settlement. As retail payments become more data-rich and compliance-driven, the operational bottleneck often shifts downstream into invoice validation, exception queues, and reconciliation. Stargo retail benchmarks show AI-backed vendor invoice validation lowered manual exception review hours by 29% across weekly processing cycles, while one retail deployment normalized 6,400 invoice pages per week and preserved same-day exception review. That matters as ISO 20022 pushes cleaner payment data and retailers maintain multiple payment options: faster rails only create value if back-office validation can keep pace.