Will the good times roll on?
The payments industry in North America is on a roll, with revenue growing at 6 percent CAGR between 2015 and 2018.
However, incumbents are finding themselves on increasingly unstable ground. Growth is expected to slow and most retail payments leaders in the top US and Canadian banks believe they will lose 11 to 15 percent of their revenue pool in the next three years to emerging competition such as fintech and Big Tech.
Facilitating a transaction is no longer enough. The customer experience is the new driver of brand value and competitiveness in retail payments.
Five big bets in retail payments
Imagine banks as mere funding sources, not primary, customer-facing retail payments leaders. That’s the reality banks face if they do not evolve.
These five big bets can help drive transformational change in retail payments:
Go big or go home
The time to respond is now. Make the big bets. Fundamental changes are at the doorstep of the retail payments industry. Banks must make transformational changes to deliver the next-level customer experiences that will drive revenue and maintain relevancy. If not, they risk being relegated to a utility position providing back-end transactional services while others provide data-powered business models.