RESEARCH REPORT

In brief

In brief

  • Imagine banks as mere funding sources, not as primary, customer-facing retail payments players.
  • While retail payments leaders are seeing near-term growth, incumbents are projected to lose 11 to 15 percent of their revenue pool to new competitors.
  • We offer five big bets banks can place to drive transformational change in North America retail payments.


Will the good times roll on?

The payments industry in North America is on a roll, with revenue growing at six 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.

Retail payments leaders realize that big changes are at their doorstep. What many do not realize is that they lack the luxury of time to respond.

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:

1. Reinvent revenue

Escape the big squeeze on revenue by delivering new value. Determine which services you will (and can) charge for and whether potential new revenue sources will be direct or indirect.

2. Jettison legacy tech

Rather than ripping and replacing legacy systems, digital decoupling and DevOps can help banks build an agile technology foundation to innovate at market speed.

3. Run with the unicorns

Embrace collaboration with FinTechs to compete in a market that innovates faster than any single firm—or risk falling behind in customer experience, innovation and speed.

4. Spin data into gold

Data today is an insight, but it will soon become a product. Develop new products from the information surrounding transactions while being careful to protect the integrity of customer relationships.

5. Treasure trust

Consumer trust is the essential foundation of customer experience in retail payments. Preserve trust by securing personal information and using data carefully to fuel a new basis of competitiveness.

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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.

By 2025, nearly 15 percent of retail payments revenue will be at risk from card displacement by real-time payments, competition from non-banks and digital disruptors, and pricing compression.

— Accenture Research, Global payments revenue at risk

Kevin Grieve

Managing Director – Payments Lead, North America


Luca Gagliardi

Director – Accenture Research, Payments Lead

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