Payments gets personal—strategies to stay relevant

In brief

• Next-generation consumer payments are growing rapidly due to changes in consumer behavior, advances in tech and innovative competition.
• Accenture research finds that over half of consumers in major markets have used tools like digital wallets, which are more popular than credit cards.
• Economic turbulence is driving consumers to seek more control over their payments choices, with some eager to escape paying interest.
• Card-issuing banks that take a timid approach to payments innovation could lose out on $89 billion in revenue in the next three years.

The future is digital, even for face-to-face payments

The latest global payments consumer survey from Accenture reveals that next-gen offerings like digital wallets, account-to-account (A2A) and buy now, pay later (BNPL) are rapidly gaining share—and more disruption is coming from biometrics, machine-to-machine and metaverse payments.

Cash is still dominant, but digital wallet adoption is soaring.
Q: Which of the following payment methods do you use at least 5 times per month?

Digital wallets, for example, are more commonly used than credit cards globally. This might seem surprising, but it lines up with the consumer enthusiasm our research found for frictionless payments solutions like digital wallets, which offer flexibility, speed and ease of use—without sacrificing security.

Next-gen payments have taken off online, but a similar trend is apparent with in-person. Our research projects that in-person usage of next-gen payment methods will double over the next three years.

Rising competition and shifting consumer behaviors place revenue at risk

The arrival of these new payments methods is accompanied by new competitors. Our analysis found that those banks slow to invest in next-gen payment options could lose up to $89 billion in revenue between now and 2025.

In turbulent economic times, banks have traditionally had an ace in the hole—consumer trust. That holds true today, but banks can’t count on trust alone for a competitive edge.

Our research found that customers are still willing to try payments solutions from fintechs and other newer players, even if they trust them less. That’s especially true when they are frustrated with their bank’s payments experience or if they have needs their banks are not addressing.

Four strategies to take the pain out of payments

The challenge before incumbent payments players is clear: make it safe for consumers to pay anywhere, anytime, anyhow. To achieve this, they can pursue one or more of the following strategies.

1. Partner to scale
   Collaborate to defend core payment revenues and lock out new entrants.
   
   
2. Simplicity and speed
   Increase customer intimacy through deep insight into their behaviors and needs. Focus on high-usage applications and new technology like AI.
   
   
3. Niche focus
   Differentiate the brand through a deep understanding of particular consumer pain points and needs.
   
   
4. Beyond payments
   Use dynamic data to play a prominent role in online marketplaces or super-apps and sit at the center of customers’ digital lives.

Whatever strategy they choose, now is the time for payments players to put a stake in the ground that will ensure their future growth and relevance.

To learn more about the future of consumer payments, read “Payments Gets Personal”, a report based on surveys of more than 16,000 consumers in Asia, Europe, Latin America and North America.