According to Payments Cards and Mobile (1 Feb 2022), the digital payments industry will soon be worth a staggering $476,1 trillion. They further predict that 74% of this will be handled by non Financial Service Institutions (FSI).
Despite the fact that traditional FSI’s will double their spending on payments technology to $80,3 billion by 2030, (2020 this was $39,7 billion) it will not be enough to compete with the nimbler more efficient non-FSIs.This decrease in market share of payments will cost the traditional FSI’s a staggering $250 Billion in payments revenue.
Almost 10 years ago, delivering a keynote address at a global banking conference, I challenged the bankers in attendance to whether banks should be in the payments business. The reaction was almost unanimous – “what a stupid question!” Well, looking at the stats above, maybe the question wasn’t all that stupid.
If the Traditional FSIs want to play in the payment space and maintain their dominant position, they are going to have to take a more serious strategic position and be a lot more innovative in the solutions that they provide. The article goes on to say that 95% of all non-cash payments will be contactless.
We would like to think that there is still a role that innovative banks can play in the newly emerging payments space. One thing that they do have in their favour is the trust of the market – at least in many parts of the world.
However, they still carry an “elitist” image and as was put to me by a highly respected businessman – “they do not want the gumboots in their banking halls.” A harsh reality is that a very large percentage of the $476 trillion will form the “gumboots” and this in itself presents a massive opportunity to innovative forward-thinking banks who want a piece of this payments industry.
WIZZIT has a 20-year track record around the world of providing innovative payments technology to innovative banks making the world a better place for everyone.