Disruptive change is reshaping the landscape of the payments industry as innovators rapidly acquire increasing market shares by leveraging foundations built on payments into expanding product offerings that are embedded as customer experiences. In response, incumbent institutions need to creatively and quickly reposition themselves to remain competitive. An IDC InfoBrief recently examined how 6 major trends are exerting significant transformational forces on the payments industry:
- Real-time payments are driving innovations in payment experiences, resulting in consumers having redefined expectations as to what their payment experiences should be.
- There is a growing multitude of payment asset classes that are driving digital commerce, including digital currencies, central bank digital currencies (CBDCs) and even brand loyalty points and vouchers.
- Increased competition and margin pressure from new entrants (e.g. cloud-native virtual banks) is pressing incumbents to find new value propositions for their payment products.
- Technology advancements are creating new roles in the payments industry. In turn, these new roles (and the companies that play them) are driving customer experience trends.
- New regulations (e.g. open banking mandates, domestic real-time payment schemes) are shaking up traditional safe revenue streams for incumbents, further reshaping the payments landscape.
- The push for integration and interoperability is forcing payment players to be more adept at working in integrated ecosystems, especially as payment systems become more diverse and go international.
Check out more of IDC’s InfoBrief here.