LONDON (Reuters) – Banks are set to miss out on as much as $280 billion in proceeds from payments of operations in the year 2025, as a new start-up of muscle, in the business of transmitting money to individuals and businesses, directly and free of charge, according to a new report.
FILE PHOTO: a Bank-card readers for payment via a mobile phone application, as shown on the illustration figure, April 4, 2019 at the latest. REUTERS/Edgard Garrido
The global payment business, which covers a bit of a fee, including a map, to get to the wiring of the money overseas, it will be dominated by the banks, and this year will be worth approximately $1.5 trillion, a professional services provider, Accenture said in a report on Monday.
That is expected to grow to $2 trillion worldwide by 2025, however, the banks are likely to lose out on $280 billion, or 15% of global payments revenue, We estimate.
Banks are facing increasing competition from tech start-ups such as Silicon Valley, payment providers, Stripe and Square, as well as the technology platform to support PayPal, and the likes of the London-based TransferWise, which is the supply of foreign currency to make payments to residential and small business customers at lower cost.
Payments are always instant, and the removal of the requirement of a credit card that will earn the banks ‘ revenues, and they will be more and more likely to be made directly to the merchant’s use of the new technology, the Company said. More competition means pressure on margins, and accelerate, the trend in direction of free of charge of payment.
“Instead of being at the forefront of the new wave of the booming payments market, banks are feeling the heat from new competitors, and are seeing their margins squeezed,” said Gareth Wilson, leader of Accenture’s global payments team.
“We are faced with an inevitable world of the instantaneous, invisible, and free of charge payments, and that spells trouble for the banks, who don’t want to be confined to the bathroom from the bed!!”
We said that the it was analysed to identify trends in how consumers pay, and the expected changes in the future behavior of the payments to the suppliers, technologies, and regulations to arrive at its forecasts of the likely losses of revenue to the banks.
It is estimated that up to free of charge of payments would be 8 percent of the banks ‘ payment revenues are in jeopardy. A further 3.9% of the risk from non-bank competitors, “the invisible payments, while direct payments could still be 2.7% of total revenue.
More than two-thirds of the bank executives surveyed by Accenture agreed that the payments are always free of charge.
The digital boom, it will mean that banks will need to fundamentally change the way they think about their income, the composition of this,” said Alan McIntyre, who leads Accenture’s banking industry.
System that has ever been made by the banks in the billions of dollars that will cease to exist,” McIntyre said, adding that investors need in order to build a new, digital business models, for one-click payments, is the new norm.”
The editing by Toby Chopra