As the world goes phygital, the right product at the right time is crucial

In the first of a series of articles powered by leading PayTech specialists G + D, we examine why getting the right product to market rapidly matters more than ever in a phygital world.

Retail financial services is as tough today as it’s ever been – maybe more so.

After a ten-year run of declining profits following the Great Financial Crash (GFC) of 2007-2008, banks found themselves facing growing competition from digital-only neobanks and fintechs of all kinds – especially in payments.

Then – just as banks seemed to be rebuilding investor value – a once-in-a-century health crisis hit which accelerated trends towards digital commerce, including more emphasis on mobile and internet banking and a shift away from in-branch services.

Fintechs and neobanks haven’t had an easy ride, either: the huge wave of investor enthusiasm seen ten years ago has ebbed, and those holding funds are no longer willing to countenance long waits for start-ups to begin generating revenue and profit.

In 2023, global investment in fintech companies declined by almost 50% compared to 2022, according to Innovate Finance[1], with analysts predicting slow growth for the next five years.

The phygital product imperative

In many ways, both traditional banks and new entrants face similar challenges, albeit from different angles: investors want to see positive revenue growth and profitability, while consumers are looking for new product types that combine both digital and physical experiences.

While instant issuance may have been “table stakes” for many financial institutions a few years ago, today digital issuance is becoming the norm for consumers.

According to the Global Payments Report 2024 from Worldpay[2], the use of mobile wallets exceeded cash use world-wide for the first time in-store.

It’s not a matter of digital card issuance replacing instant card issuance, or even about institutions needing to offer both solutions.

Instead, it’s about two different demographics that require separate card issuing strategies.

Every institution will have a demographic that won’t embrace the digital age; however, the ecosystem is changing, and new digital payment channels are proving increasingly popular.

“Investors want rapid revenue growth and profits, while consumers need new phygital payment experiences.”

It can be tempting to think the digital revolution implies everything should be online – yet that’s far from always true.

While digital commerce is predicted to hit 20% of global retail spending by 2025, by implication, such facts demonstrate that the physical and digital customer journeys are converging.

Meanwhile the humble card shows no sign of disappearing as a payment form.

Research from Visa and The Strawhecker Group in the United States suggests[5] 70% of consumers prefer using cards to pay both online and in-store, while in Europe, card payment growth outstripped overall electronic payments growth by 20% over the last five years[6].

More powerful cards featuring biometrics and multiple functions, more sustainable raw materials for card production and more environmentally-friendly communications methods have all helped breathe new life into cards.

Simultaneously, innovations like Convego tap, a phygital service, have revolutionized the everyday banking experience.

By leveraging existing bank cards, users can simply tap their phone to activate cards, onboard apps, and authorize high-value transactions with unparalleled security and ease.

The management of cards via app is another example of the rise of phygital: banks around the world are giving consumers more power over their cards via an app that lets them view balances, set spending limits, confirm payments and manage security using their mobile device.

In a different scenario, Token Cockpit empowers banks to enhance mobile banking and payment experiences by providing greater visibility and control.

Through the issuer’s mobile banking application, consumers can manage all card tokens in one centralized location.

This platform seamlessly provisions tokens to digital wallets such as Apple Pay, Google Pay, and Samsung Pay as well as merchants directly from the mobile banking app.

Moreover, users can effortlessly onboard themselves to Click to Pay, facilitating a streamlined one-click checkout experience.

In essence, Token Cockpit offers consumers easy control over their card’s status and provisioning with just a few clicks.

Onboarding kiosks in shopping centres and other public venues also help customers more familiar with physical services to navigate their first digital experiences.

By embracing a phygital future, banks cater for all demographics: those who prefer physical payments by card or cash, as well as digital demographics who prefer paying via phone, digital app or virtual card.

By offering both physical and digital services, and combinations of both into phygital services, banks cover the entire spectrum of electronic payments.

How fintechs and banks can respond

Faced with pressure from both investors and customers, banks and fintechs have a clear need to get new phygital products to market rapidly, generating revenue by delivering the kinds of products and experiences customers expect in the phygital age.

However, moving quickly isn’t enough: these new phygital products should be fully operational and widely available from launch.

They must also be secure, fully compliant with current and upcoming regulations and easy to integrate with existing systems and products.

Achieving rapid time-to-market and launching at scale is no simple task, whether you’re a Tier 1 pan-European banking giant or a start-up with five employees.

To keep up with market demand and investor expectations, banks and fintechs should be looking to work with experienced partners that can provide both off-the-shelf and tailored payment products and solutions – whether that’s issuing premium cards for the high-net-worth segment, or market-specific fraud solutions that target the specific threats your business faces.


Find out more about how G + D is enabling phygital payments with suite of products and services available as a Service: Convego® Service Market – The Future of Card Issuance | G+D


[1] Payments Cards & Mobile, 12 January 2024: “FinTech Investment takes a hammering in 2023

[2] Worldpay, 23 March 2024: The Global Payments Report 2024

[3] Forbes Advisor, 28 March 2024: “35 e-commerce statistics of 2024

[4] Harper’s Bazaar, 28 March 2024: “Luxury Brands Lure Customers Back in-store

[5] Visa USA, 7 January 2022: “Back to Business Study – one year on

[6] See The Digital & Card Payment Yearbooks 2023-2024


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