Tribe Payments, a team of industry experts dedicated to delivering the future of payments, has published a study on the effect of disposable technology on payments. The paper looks at the common use of modular technology by fintechs, and how legacy players without it are struggling to keep pace.

Modular technology allows payment providers to be more flexible and enables innovation. Many legacy providers have complex, highly integrated back-end infrastructure, which makes adding new services near-impossible, responding to market trends slow, and even small changes disruptive. Modular technology is, as the name suggests, interchangeable and disposable, making it possible to update code without impacting performance, access new functionality, and use multiple technology providers.

“Fintech can help lower barriers to entry and make it easier to bring innovative payment ideas to market,” said Syed Kamall, Member of the European Parliament. “Modular technology is emerging across many industries and could help to reduce costs and barriers to market entry still further. Introducing modular technology as part of a fintech offering should increase the viability of different business models and create new opportunities in important areas such as financial inclusion.”

The paper looks at how legacy players in the financial sector are trying to play catch-up with the aid of modular technology—and the options available. Short term, modular technology can be used as a patch for aging functionality, but longer term, they will need to choose between building a new platform or a cheaper multi-platform model that may be inefficient.

“For all the talk of the mobile experience and a new attitude to financial services, it’s really the underlying technology that marks out fintechs from their competitors,” said Suresh Vaghjiani, CEO, Tribe Payments. “The benefits of modular technology mean that those without it will be left behind—even if they want to innovate, they will find their infrastructure simply won’t support it.”

The report is available for download here: https://www.tribepayments.com/wp-content/uploads/2019/07/tribe_white-paper_june-2019.pdf