As digital economies race to streamline the payment process, the checkout experience is at the forefront of change, with innovations around customer experience and security redefining how merchants and consumers engage with payment technologies.
Merchants, payment service providers (PSPs) and issuers must align their strategies to prioritize both security and user experience, and PYMNTS hears from Surin Fernando, senior vice president, customer solutions, Australasia at Mastercard, and Guida Sousa, senior vice president, product management at Mastercard, about why payments innovators should pay particular attention to Brazil and Australia.
“Brazil is a very digital-savvy market, and merchants are acutely aware that frictionless experiences drive sales,” Sousa said, noting that consumers demand immediacy, security and seamless experiences.
One of the core innovations in Brazil’s checkout transformation is network tokenization.
“We are replacing the traditional 16-digit card number with a token that is useless to fraudsters,” Sousa added. “This ensures both security and ease of checkout, which aligns with global trends.”
Moreover, Brazil is adopting biometric authentication.
“Merchants are embracing technologies that offer both security and frictionless experiences,” Sousa said. “We’re seeing initiatives like payment passkeys gaining traction, and merchants are keen to implement them after witnessing their benefits.”
Still, she added that many Brazilian merchants feel as they are unable to request technical features from their PSPs, which indicates a significant gap in communication. Despite this gap, over 50% of merchants proactively requested technical upgrades, signaling that larger retailers with deeper knowledge of the payments ecosystem are pushing for innovations.
Mastercard is stepping in to bridge the gap between merchants and PSPs, ensuring that the demand for seamless checkout experiences is met with responsive solutions.
The Role of PSPs and Industry Collaboration
While it exists in a separate hemisphere, Australia mirrors Brazil in its push for digital payment advancements but faces its own unique challenges, particularly around security.
Fernando said the country has one of the highest rates of contactless payments globally, with 99% of transactions being contactless and 70% happening on mobile devices. However, the online checkout experience remains inconsistent, creating friction for both consumers and merchants.
“Our online experience is still broken in many ways,” Fernando said. “We’re seeing high demand for one-click checkout, but what really surprised me was the growing interest in biometric authentication. With only 1 in 10 transactions authenticated in Australia, we have a billion-dollar card fraud problem that needs urgent attention.”
He emphasized the role of PSPs in solving this issue.
“While more than 52% of merchants didn’t engage with their PSPs on technology requests, it’s clear that those who did saw significant improvements in approval rates and fraud mitigation,” he said. “We need to create a system where merchants feel empowered to ask for these capabilities.”
One of the major advancements in Australia is the integration of Click to Pay, a streamlined checkout experience that eliminates the need for manual entry and increases conversion rates.
“We’ve been working with issuers to auto-enable customers into Click to Pay, which dramatically improves adoption,” Fernando said. “This, combined with network tokenization and biometric authentication, forms the holy trinity of secure, seamless checkout.”
Looking Ahead to the Future of Checkout Innovation
Both Sousa and Fernando agreed that PSPs play a crucial role in the adoption of new payment technologies, but they need better education on their value.
“We need to articulate the ‘why’ — why network tokenization reduces fraud, why Click to Pay increases conversion, and why biometric authentication is the future,” said Fernando. “Our vision is clear: 100% tokenized transactions, 100% authentication and the elimination of manual card entry by 2030.”
“The industry has to come together to make this happen,” Sousa said. “Just as we collectively deployed contactless technology a few years ago, we must now rally around one-click checkout, tokenization and passkeys.”
As consumer expectations continue to evolve, merchants, PSPs and issuers must align their strategies to prioritize both security and user experience. Ultimately, whether in Brazil, Australia or elsewhere, the future of checkout is fast, frictionless and fortified against fraud. And if Mastercard’s latest initiatives are any indication, the payments industry is well on its way to achieving that future.
