Payments are speeding from “instant” to “intelligent.” Embedded finance, digital wallets and Agentic AI are reshaping both the merchant checkout and the bank back office. But the path to autonomy isn’t just a tech sprint; it’s a trust marathon.

The latest research from HCLTech, Future of Payments: AI everywhere. Trust nowhere?, underscores the paradox: 99% of organizations already use AI, yet 91% of leaders are concerned about its risks, and 60% say current AI fraud tools underperform. Meanwhile, more than half expect to operate autonomously within two years, but only 17% truly do today.

Against that backdrop, Deepak Arora, Senior Vice President and Head of Banking – Continental Europe at HCLTech sat down with Kilian Thalhammer, Global Head of Merchant Solutions at Deutsche Bank, to discuss what’s next for merchants, banks and the data that binds them.

Loyalty, CX and analytics: Where transactions meet relationships

When asked how merchant solutions will evolve to drive loyalty and insights, Thalhammer drew a straight line from payments to rewards: “Loyalty is a transactional business. Payment is a transactional business. There’s quite a good fit and from a consumer point of view, they don’t differentiate. At the end, they want to be rewarded through loyalty.”

That means checkout is becoming the most valuable “moment of truth” for merchants and banks: the point where authorization, offer, identity and reward converge. HCLTech’s research confirms the commercial pressure behind that convergence: 87% of executives fear losing customers without instant payment capabilities, and only 20% say they have cloud-native, real-time data to truly personalize at scale.

Wallets, BNPL and the battle for the front end

On wallets and BNPL, Thalhammer sees two clear strategies for merchant services providers: “You can deliver the back end and not own the front end; that’s one strategy. The other would be to fight about the front end, which is a hard game to play.” His verdict: “We think there’s a role to play for banks.”

In practice, that role looks like interoperable payments infrastructure, bank-grade risk controls and value-added services, including settlement, financing and loyalty, that plug neatly into wallet-led experiences. It’s a pragmatic read of a market where UX gravity often favors the wallet brand, but trust, liquidity and compliance still favor the bank.

Data and AI: Great power, greater governance

Thalhammer was unequivocal about data’s importance: “Data is the basis of everything. The first question is always; do we have the data? The second; are we allowed to use the data?” He stressed that “work on our data infrastructure is key,” because AI “needs more data, sometimes also different data.”

This ties in with HCLTech’s findings that highlight the challenge for banks looking to embrace an AI future. Nearly half (47%) of organizations operate without formal AI policies and European institutions in particular feel under-prepared for an autonomous future. The message: without governed, permissioned, real-time data, autonomous payments will remain a prototype, not a production advantage.

Overcoming AI resistance: Start small, sell value

Banks are conservative by design. “By nature, a bank is defensive and risk averse,” said Thalhammer. The antidote is disciplined delivery: “Ensuring that compliance, data security, and data privacy are managed correctly, and starting smooth with a small use case rather than a big one.”

And when it comes to stakeholder buy-in, keep it practical and talk “about the added value and avoid the word AI.” In other words, lead with outcomes like higher approval rates, lower chargebacks and smarter routing; then point to the models later.

Partnerships and open ecosystems: Speed as a team sport

In a world shifting to composable platforms, Thalhammer championed collaboration: “We should overcome the thinking that everybody can do everything on his or her own. Partners are much more efficient, much faster. Doing everything on your own is simply too slow, too expensive and, at the end, too risky.”

That ecosystem mindset mirrors an industry reality: 52% of organizations say they aim for autonomous operations in 18–24 months, yet legacy systems and governance gaps slow progress, especially in continental Europe, where only 19% feel fully prepared. Strategic partnerships with banks, FinTech's and providers can compress that readiness gap.

From pilots to production

Trust, speed and intelligence will define who wins the next payment cycle. The roadmap that emerged on stage at Sibos is clear:

• Treat the transaction as a relationship moment, where payment, identity and loyalty converge
• Let wallets lead experiences when it makes sense, but bring bank-grade trust, risk and settlement to the table
• Build governed, real-time data foundations so AI can move from promise to performance
• Earn adoption through small, safe, value-proof pilots, and talk outcomes, not acronyms
• Partner to move faster than legacy constraints

If the industry can execute on that playbook, the destination is an autonomous payments future that doesn’t just move money, but anticipates intent, rewards loyalty and operates with resilience by default.