Accenture Banking Blog

Sustained disruption is reshaping the payments industry. Developments like new technologies, shifting consumer expectations, and the launch of central bank digital currencies are creating major changes.  

With changes come opportunities—but not all payments players are seizing them equally.  

In my previous post, we looked at some strategies that digital-native payments disruptors have used to out-grow the market between 2018 and 2020. They were drawn from our new report, Growing payments to new heights. 

The report combines insights from a global survey of payments executives, a series of expert interviews, and analysis of data from 175 payments companies in 25 countries to highlight what the fastest-growing payments players today are doing differently. 

And these leaders, it turns out, are not only digital-native disruptors.  

Different paths to growth for payments incumbents 

Our research reveals that a group of 30 incumbent payments providers have outgrown their peers. In general, they are distinguished by their focus on creating the outcomes customers want, rather than the products they want to sell. They use innovative payments methods to put compelling value propositions at the forefront of their strategies. This lets them close the gap between the customer experience and technical infrastructure. 

We identified three different approaches these leaders use: 

  1. Taking friction out of the process. While payments in general has made great strides toward letting people and organizations move money anywhere at any time, payments growth leaders are pushing the envelope of allowing customers to pay any “how” they want. They are removing what friction remains in the process to unify disjointed systems and create a seamless commerce experience. 
  2. Push the purpose lever. Some growth leaders are finding ways to align themselves closer with their customers’ values and advance their financial wellbeing as well as the good of society and environmental sustainability. Mastercard, for instance, has worked with the Swedish fintech Doconomy to create a proposition that enables banks to provide carbon footprint data and insights customers can use to inform their spending. 
  3. Go beyond the payment. Value-added services like data monetization, SME e-commerce solutions, and identity verification are providing growth opportunities for some payments leaders. US Bank, for example, is tackling the SME market with innovative services, fueled by its acquisition of the business-travel-focused fintech TravelBank. 

Crafting future-focused value propositions 

Today’s payments leaders use the approaches I discussed above separately and in combination to craft compelling value propositions. Our survey and conversations with these leaders suggest that tomorrow’s incumbent winners in payments will use three tools to drive their new value propositions. 

The first is technology transformation, which uses agile tech to enable quicker speed-to-market and better margins driven by a lower cost base. These savings can be reinvested to drive performance and innovation. 

The main driver here is the cloud, which makes new operational efficiencies possible in payments. Using API platforms to create seamless customer connections, and finding new revenue streams from existing assets with data monetization are also important components of tech transformation. 

The second is operating model renewal. Payments growth leaders are changing their operating models to find new efficiencies for themselves and their customers. This is congruent with the customer-first approach mentioned above. We believe that embodying the customer value proposition in the organizational structure makes for a nimbler, more responsive organization. Payments growth leaders are also shifting their organizational cultures and talent practices to foster continuous learning, and using agile methodologies to develop, test, and launch innovations faster. 

The third tool for driving new value propositions is ecosystem participation. It’s now widely recognized that no one payments organization can succeed on its own. Partnerships are essential for meeting the expectations of today’s customer. But choosing the right partners and building the right relationships are still challenging tasks.  

Payments growth leaders tend to use partners to access value-added or bolt-on services while keeping development of core propositions in-house, because they can’t rely on partners to maintain compliance. They are also 60% more likely than the rest of the payments providers we analyzed to say that proactive compliance with partners is a key component for building a payments ecosystem.  

Unlike digital disruptors, payments incumbents must carefully balance protecting their core business and growing their customer base as they innovate. Forward-thinking incumbents are using the tools and strategies described above to create customer propositions that add value and grow the business. They are forging their own paths to growth amid the upheaval in payments right now.

To learn more about growth opportunities in payments, contact me here. You can also read the full report, Growing payments to new heights:

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