In a dimly lit concert arena in Madrid 80,000 fans raise their smartphones to capture Taylor Swift’s finale, and also to pay for a split second merch drop. In Mumbai a street vendor settles a receives payment for a “cutting chai” via a QR code, while a startup founder in Berlin seamlessly splits his Michelin starred dinner bill across three digital wal
lets. While the events are seemingly disconnected, they share a common thread. Each one of these use cases is all fueled by an invisible revolution in payments, one that is quietly underpinning by some estimates $13.7 trillion experiential economy.
The Rise of the Experience Era
The term “experiential economy” first appeared in an Harvad Business Review article in 1998 by B. Joseph Pine II and John Gilmore, who argued that future economic value would be derived not from goods or services, but from curated memorable experiences. A quarter century later, their prophecy seem to have materialized with a staggering force. Research by Euromonitor International 77.3% of respondents said experiencing things in the real world is extremely important and 66% seek curated, personalized experiences, indicating a strong shift towards experiential spending. Millennials and Gen Z, who drive this demand, are not merely buying products; they are investing in identity, community and stories worth sharing.
Yet this shift has exposed a critical flaw in traditional commerce infrastructure. Legacy payment systems are designed for predictable, goods centric transactions through transfer of monetary value. These systems are buckling under the weight of experiential demands such as hyper personalization, real-time flexibility, intelligent suggestions and memorable experiences. To fill this gap a new generation of payment tools such as cards on the go, programmable wallets and AI driven orchestration have emerged. They do not merely facilitate transactions which is defined as the transfer of value, but actively shape how overall sales experiences are curated, shared and remembered.
Orchestration Layers: The Invisible Backbone of Experiential Economy
At the heart of this transformation lies the orchestration layer (OL), a technological maestro conducting the symphony of modern payments. Unlike monolithic legacy systems, OL acts as an agile intermediary, seamlessly connecting banks, payment gateways, fraud engines and regional methods into a unified stack. Its value lies not in moving money, but in making money movement intelligent.
Consider a family booking a multicity European vacation. An advanced OL analyzes real-time data: the daughter’s preference for Apple Pay in New York, the father’s corporate card in Frankfurt and the son’s India UPI for last minute Mumbai layover expenses. It dynamically routes each transaction to optimize success rates, applies loyalty points from three airlines and even negotiates FX rates mid booking. For merchants, such systems have increased payment success by 4 to 5% and reduced operational costs by 22%, according to 2024 data from McKinsey.
Given the decisioning ability of OL, there undeniable fear of bias and neutrality. In an experiential economy The argument that the Ol needs to be unbiased and neutral to ensure that it provides the right experience. But unbiasedness and neutrality should be toward selection of payment rout. While for the customer experience bit, the OL should be extremely biased towards the customer to ensure the customer receives the curated, memorable, frictionless, failureproof experience and also should be extremely biased towards the merchant’s need to get highest success rate at lowest cost processing.
Apart from processing of transaction, tokenization has emerged as an essential and important aspect of experiential economy. In India, where the Reserve Bank’s strict tokenization mandates briefly disrupted subscription services, OLs proved transformative. By integrating NPCI’s token standards with global card networks, platforms like Zomato and Disney+ Hotstar now auto renew 89% of subscriptions without exposing card details. This helped slash the churn by 40% and revived India’s $4 billion OTT market.
Wallets: From Payment Tools to Experience Platforms
Digital wallets from being a tool for financial inclusion for those at the bottom of the pyramid is now emerging as a lifestyle tool of rich. They are no longer mere replacements for physical cards or store value accounts but they have evolved into dynamic identity hubs, blending financial utility with lifestyle. By 2025, wallets will account for 60% of global e-commerce, but their true power lies in data driven personalization.
Take India’s Paytm, which processes over 12 billion monthly UPI transactions. Beyond payments, it offers gold investments, insurance, event booking, ticketing etc. all within a single interface. For wallet users, such offerings create a fertile ecosystem to drive loyalty.
Merchants can issue closed loop wallets to unlock hyper targeted engagement. A Delhi based coffee chain, for instance, can use wallet spend data to offer monsoon discounts on chai lattes precisely when humidity peaks, marrying meteorology with commerce.
In the EU, Revolut’s wallet now curates travel experiences, suggesting boutique hotels in Lisbon based on past spend patterns and adjusting dynamic currency conversion rates in real time. This shift from “paying” to “participating” is redefining loyalty. 73% of consumers prefer brands that integrate rewards into experiential journeys, as per a 2024 EY study.
Cards Reimagined: The CaaS Experiential Revolution
The humble payment card, once deemed a relic, is being reborn through “Card as a Service” (CaaS) models. These platforms allow brands to issue white labeled, programmable cards in hours as well as tailored to niche experiential economies.
Singapore’s GrabPay card rewards users not just for rides, but for yoga classes and vegan dining. In the U.S., Uber’s partnership with Visa offers a co-branded card that accrues “experience points” convertible into concert tickets or cooking classes. For businesses, CaaS transforms cards into relationship tools: a luxury resort chain in the Maldives issues prepaid cards at check in, pre-loaded with credits for spa treatments and sunset cruises capturing 92% of guest spend that previously went to third party vendors.
The Incumbent’s Dilemma and the Challenger’s Edge
Legacy payment providers, shackled by outdated architectures and regional silos, are struggling to keep pace. Europe’s fragmented landscape plethora of payment service providers (PSPs), each with distinct protocols has left merchants drowning in complexity. Meanwhile, North America’s slow adoption of real-time payments (RTP) risks alienating a generation raised on Venmo’s instant splits.
This is where challengers thrive. By combining SaaS agility with AI driven orchestration, next gen platforms are solving three core pain points:
- Unbiased Routing: Unlike legacy OLs that have a bias towards in-house PSPs, modern systems foster competition among providers by being unbiased and neutral, slashing processing fees by 18–22%.
- Contextual Intelligence: Machine learning transforms payment data into anticipatory insights e.g., suggesting best route for the merchant and at the same time helps the guest with budget splits for group travel or automating VAT refunds during cross border shopping.
- Global Locality: Embedding regional methods (Brazil’s Pix, Poland’s BLIK) while maintaining global compliance, a balance which 73% of enterprises fail to achieve.
Conclusion: Payments as the New Storytellers
In the experiential economy, payments are no longer a conclusion, but they are the opening act. They shape how we discover, engage, and remember, turning mundane transactions into narrative threads. For businesses, this demands a paradigm shift: from treating payments as infrastructure to embracing them as experience architects.
The challengers leading this charge understand a fundamental truth: in a world where memories are the ultimate currency, the most valuable payment is the one you never notice. This is when a payment breaks the notion of transaction i.e transfer of value and offer payment as an experience.
Sources: HBR, McKinsey Global Payments Report 2024, RBI Annual Bulletin, EY Consumer Loyalty Index.
