Almost three-quarters (71 percent) of European retailers and financial institutions plan to increase spending on payments technology in the next 18 to 24 months in the face of increasing competitive pressure and a feeling of being ‘under siege.’
The five-part Global Payments Insight study, conducted by ACI Worldwide and market research firm Ovum, asked more than 1,600 executives representing leading banks, retailers and billing organisations across the Americas, Asia-Pacific and EMEA about their experiences, perceptions and expectations of payments and how payments are shaping their behaviours today.
Principal findings of the survey include:
· Competition drives spending: The majority of European executives stated that new competitive pressures and the burgeoning threat of FinTech are driving investments in their own payment systems.
· Security Tops The Agenda: Security is a critical issue for retailers, with the theft of customer payment details a major concern for 70 percent European retailers. The growth in eCommerce has resulted in Card-Not-Present Fraud becoming the most pressing issue for 59 percent of retailers.
· Immediate Payments Offer New Opportunities: 57 percent of European executives believe that consumers will benefit directly from Immediate Payments. Moreover, 59 percent of transaction banking executives also believe that businesses will benefit directly from improved liquidity management, lower risks and faster payments.
· Payment Initiators Want To Work Directly With Payment Operators: A strong continuing trend from last year is that payment initiators (retailers and billers) want to work directly with payment operators (banks) to cut out intermediaries in the payment value chain and simplify the payments ecosystem.
Banks are seen as the primary provider of payment services by European retailers. In fact, 87 percent want to work directly with banks. Other payment provider categories are increasingly gaining traction, most notably online payment providers, with 74 percent of European retailers willing to work with them in future.
“The payments industry is undergoing radical change that will have far-reaching consequences for banks, billers and merchants, as well as for the consumers and business customers to which they provide services,” said David Bannister, principal analyst, Financial Services Technology, Ovum. “How all of the players in the industry adjust to these changes and interact with each other will be a crucial factor in their future success.”
“For all of these organisations, the key takeaway is that competitive pressures are driving up spending in the marketplace. Spending small, incremental amounts will only lead to an erosion of market share, said Paul Thomalla, senior vice president, ACI Worldwide. “The payment initiators of the world want to work directly with payment operators. By doing so, they will be able to lower payment costs, reduce complexity and increase investments to stave off the threat of new competitors.”