Payments in the Wild Tech World
Digitisation and changing customer expectations
Payments used to be one of the industries least vulnerable to disruption. In a FinTech flooded world, this is no longer the case.
In the last few years, companies in the payments and transaction space have worked towards building an ecosystem that promotes digital payments and reduction in the usage of cash. This has primarily been possible through the use of technology to enhance customer experience. While the traditional players have worked towards creating this ecosystem, it has also been equally (if not more) driven by the new market entrants or the FinTech players who use are using technology to make financial services more efficient.
The PwC Market Research Centre estimates that the number of non-cash transactions will grow by 69% from 2013 to 2020, which would represent over one million transactions happening every minute. However, new industry entrants, the so-called FinTechs, significantly disrupt traditional payments business and pose serious threats. In addition, EU governments want to stimulate non-cash payments instruments, enhance security requirements and spur competition with the upcoming Payment Service Directive 2. Pressure from the interchange regulation will result in revenue losses for card issuers.
The data from our Global FinTech survey conducted earlier this year, overlaid with insights from our FS, FinTech and insurance subject matter experts across PwC supports the following key findings:
- A vast majority of payments companies fear losing part of their business to FinTech
- Over a fourth of incumbents’ revenue could be lost by 2020 and margin pressure is a serious peril threat
- Investments in cybersecurity and fraud are top of incumbents’ minds
- Incumbents invest heavily in FinTech; many launch their own FinTech subsidiaries
- The payments sector is very aware of the disruption caused by FinTech – only 4% of incumbents do not deal with FinTech
Contact us
Follow us
