Experts Predict New Payments Services to Dominate Banks in the Future

January 9, 2024 by

Rapid developments in the payments space are loosening up the stranglehold of financial institutions worldwide.

Influential leaders in the industry such as Pieter van der Does, co-founder and CEO of Adyen, expects new payments offerings to one day surpass the limitations of traditional banks.

In the past, merchants were forced to work around conventional payments processes that were often perceived as inconvenient and lacking. With the rise of e-commerce, businesses now have a wide range of options to cater to the growing number of consumer transactions.

Experts say that the competitive nature of the sector has resulted in better services and offerings from payment providers.

“They [merchants] will look at whether to renew their relationship with their current bank or switch to an internet-connected terminal,” said Mr. van der Does.

Banks have acknowledged the need to improve their services to facilitate new payments services. Ovum research released a report showing how global financial companies are preparing for new infrastructure and more efficient platforms.

Not to be left behind, some banks have also strategically formed partnerships, enabling them to address the immediate need for alternative payment methods.

Paul Thomalla, senior vice president at ACI Worldwide, mentioned, “Banks are beginning to understand that placing bets on any individual payment technology might be to some degree risky, and that investing in infrastructure that will enable whatever type of payment in the future is the way forward.”

New payments companies have seen early success with big names in tech, including Facebook, Twitter, Spotify, and Airbnb. But in order for such businesses to directly compete with large banks, they have to tap into the general market.

Payments in restaurants, stores, and mainstream establishments are still largely controlled by banks and also make up a majority of consumer transactions.

Related Articles