The global payments industry could cash in on an additional $500bn by 2025, but at the same time old school bankers could lose $280bn of that by not adopting new technology.
That is according to new research by Accenture, the consultancy. Having surveyed 240 payment executives at banks in 22 countries, the researchers estimated that the sector is expected to grow at a compound annual growth rate of 5.5% to be worth $2.09tn in the next six years, up from $1.51tn in 2019.
This could open up the opportunity for banks operating in the payments industry to grab an additional $500bn in incremental revenue. Consumer payments accounted for 58% of the total revenue and was expected to grow by 5.1% by 2025.
However, innovations in the FinTech space has mean that instant, invisible and free payments will wipe out revenue streams for traditional banks. Accenture’s researchers warned that unless they began to prepare for the change, traditional banks could face losses of up to $280bn in revenue opportunity loss.
And the majority of surveyed bankers agreed that payments will be free. Overall, 71% believe that this will happen, jumping to 91%in Europe and 75% in Asia Pacific. In North America, 61% of bank executives believed that.
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