04/08/2026 The New Economics of Value-Added Services in Payments
For years, payments were viewed primarily as an infrastructure function. Today, competition is shifting toward services built around the transaction—security, identity, data, loyalty and open banking—where an increasing share of economic value is being created.
Mastercard is a particularly significant example. In the first quarter of 2026, net revenues from its Value-Added Services and Solutions division grew by 22% on a reported basis and by 18% on a constant-currency basis, reaching approximately $3.45 billion. The division also accounted for roughly 40% of the company’s total net revenues.
Services beyond payment processing are no longer ancillary activities. They have become a structural component of the business model of a major payment network and are growing faster than its core payment-network business.
These services include, among others, security and fraud prevention, authentication and digital identity, customer engagement, business intelligence, analytics, and services for merchants and financial institutions.
This model can be represented as a virtuous cycle:
- more payments generate more data;
- data supports risk, identity, analytics and marketing services;
- these services increase the security and usefulness of the platform;
- a more useful platform becomes more attractive to banks, fintechs and merchants;
- greater adoption generates additional transactions and further data.
Naturally, this cycle is not automatic. It requires a clear legal basis for data use, appropriate governance, interoperability, integration capabilities and a sustainable pricing model.
This topic also emerged in discussions with payment service providers regarding the digital euro.
The digital euro will require significant infrastructure investment, while the institutional objective is to provide citizens with a simple and affordable basic payment service. In this context, Value-Added Services may give intermediaries an opportunity to differentiate their offering and develop complementary revenue streams.
The ECB has identified conditional payments and loyalty programmes among the potential services that PSPs could develop around the digital euro. However, the remuneration framework remains linked to the legislative process and will need to balance incentives for intermediaries, accessibility for users and limits on merchant costs.
How should the value of a VAS be assessed?
While working on a new initiative in the VAS sector—already tested through pilots with qualified partners—I have started using five criteria.
1. Economic problem addressed
The service must address a loss, an operating cost, lost revenue, low conversion or a customer-retention problem.
2. Measurable ROI
Its value must be assessed through indicators such as reduced fraud, higher authorization rates, increased purchase frequency, higher average transaction value or lower customer churn.
3. Recurring revenues
The business model may include subscriptions, transaction fees, verification fees, revenue sharing or campaign commissions.
4. Scalability
The platform should be able to serve additional merchants, PSPs or users without a proportional increase in operating costs.
5. Regulatory and operational risk
Privacy, AI, credit, gaming, safeguarding of funds, digital identity and accountability for outcomes must be considered from the outset.
Against these criteria, the most promising areas—offering what appears to be the best balance between demand, revenues and scalability—include:
Fraud prevention and identity, because they increase confidence, reduce costs and losses;
Loyalty and cashback, because they can increase purchase frequency and retention;
Transactional analytics and marketing, because they turn data into measurable decisions and offers;
A2A and open banking, supported by the growth of instant payments and new account-verification and account-information services;
Payment gamification, because it can strongly differentiate a product, although it requires particular attention to regulatory classification.
Gamification is probably the most distinctive area, but also the one requiring the greatest discipline. The contractual structure, the role of the payment and the rules governing prize allocation can significantly change the legal profile of the initiative.
The next stage of the analysis is not only about technology. It is about positioning.
Who is the primary customer?
– the end user;
– the merchant;
– the PSP;
– the payment network;
– the brand financing the campaign?
The answer determines the product, pricing model, distribution channel, regulatory obligations and financial valuation of the initiative.
A VAS has greater potential when it creates value simultaneously for at least two participants in the ecosystem—for example, the customer and the merchant, or the merchant and the PSP—while the payment enables and measures the service.
The next phase will therefore focus on defining the positioning alternatives, monetization model, and implementation and financial plan.
The objective is not simply to add another service to a payment. It is to determine whether that service can become a scalable Payment Engagement Platform, delivering measurable value to customers through a sustainable economic model.
22/07/2026 Changes in DLT approaches
In 2017, at Sibos in Toronto, I attended the Steve Miller Band live at Ripple’s Customer Celebration Party: that was my first direct experience with Ripple.
During that week, the debate around blockchain and DLT was particularly intense. Ripple positioned itself as one of the most active players in rethinking cross-border payments, with a proposal that challenged the traditional models of messaging and international settlement.
At that stage, however, the market seemed to be moving much faster than the technology. Ethereum was already the leading public platform for smart contracts, but scalability was still an open issue: activity flowed almost entirely through the main chain, with congestion, variable costs, and a user experience still far from the standards of market finance. On the enterprise side, R3 was building a permissioned alternative with Corda, focused on security, privacy, performance, and compliance.
Meanwhile, as the crypto world grew along a partly independent path, driven by trading, mining, and strong volatility, a significant part of the financial industry watched the phenomenon cautiously. For several years in Europe, DLT and blockchain remained largely a matter of experimentation, with a clear time lag: much attention, but little industrialization.
In recent years, however, the picture has changed.
Germany has been among the most active countries, with Deutsche Börse and Clearstream on market infrastructure, DZ Bank on the custody and processing of digital assets, and dwpbank with wpNex on the retail distribution of crypto and tokenized assets. France, on the other hand, has focused on digital securities issuance and DLT settlement, with an important role played by Banque de France, Euroclear, and the capital markets ecosystem.
The real step change came when regulation and infrastructure began to move together. The European DLT Pilot Regime created a regulated perimeter for the experimentation of DLT market infrastructure. In 2024, the Eurosystem also carried out concrete tests on wholesale settlement in central bank money, signaling that the issue is no longer theoretical, but infrastructural.
Since 2025, in my view, the acceleration has become visible for five main reasons.
The first is the consolidation of the European regulatory framework, with MiCA and the DLT Pilot Regime making the field of action clearer for operators, users, and investors.
The second is the Eurosystem’s work on Pontes and Appia, which makes a DLT ecosystem with settlement in central bank money more credible.
The third is the maturation of Layer 2 solutions, which are improving the cost, speed, and usability of public networks, making many use cases more realistic and facilitating interoperability between different technologies.
The fourth is the growth of digital and tokenized investment instruments, which require new models of distribution, custody, compliance, and market access.
The fifth is the spread of instant payments in Europe, which has made even more obvious the opportunity to improve cross-border flows.
The market has started to show more concrete signs of acceleration: stablecoins are entering the systems of major global payment players; tokenization initiatives are multiplying; and in Europe, not only a new set of products is taking shape, but a new ecosystem.
The point, in fact, is not merely to issue tokens. It is to build the infrastructure for access, exchange, custody, compliance, and integration with the traditional financial system. Without that layer, tokenization remains an interesting but incomplete exercise.
My reading is that the coming years will see significant growth in DLT-based financial applications, but in different ways depending on the instruments and use cases. Payments and cash settlement will grow more gradually, because they start from already mature infrastructures. Tokenization of financial instruments, by contrast, is the segment with the broadest and most structural potential in the next phase of development.
For banks, infrastructure providers, and technology operators, the real challenge will be to continuously adapt strategies, architectures, and operating models. It will not be enough to “be there”: what will be needed is expertise, interoperability, and the ability to integrate innovation with compliance.
DLT is no longer a fad, but it still does not have a consolidated and unified adoption path. It has moved from being an abstract promise to a set of infrastructures and operating models that, for some use cases, are finally finding more favourable institutional, regulatory, and technological conditions. The question is no longer whether the phenomenon is real, but which segments of the financial value chain will be transformed first, and to what extent.
In this context, system integrators, consultants, and vendors can play an important role not merely as suppliers, but as adoption enablers. Their contribution will be key in designing modular, interoperable, and phased architectures, capable of integrating different initiatives without imposing unmanageable technological or operational jumps on financial institutions.