Business View Magazine | December 2020

6 BUSINESS VIEW MAGAZINE DECEMBER 2020 payments infrastructure changes and regulation, which include improving bank-to-bank payments systems, new industry standards with ISO20022, and Open Banking. Transition to digital payments varies by market The rapid shift to digital payments differs across countries, depending on the rate of cash decline, adoption of e-commerce and how active Big Tech companies are in providing payment services. Using Accenture’s Payments Disruptability Index , which measures current and future levels of disruption for the payments industry, the report notes that disruption is highest in the U.S., closely followed by the U.K., as consumers opt for new ways to pay and non-banks seize the opportunity to provide payments services. In China, mobile wallets are rapidly displacing cash payments – 76% of transactions in 2019 originated from mobile wallets, up from 12% in 2014 – as consumers in China have already been accustomed to using mobile apps and QR codes to pay at restaurants and stores for several years. “COVID-19 has caused consumers to be more open to digital financial transactions, and this shift will increase competition as alternative payments providers vie for market share,” said Alan McIntyre, who leads Accenture’s Banking practice globally. “The e-payments opportunity for banks varies greatly by market and depends on the maturity of the transition to digital payments. In mature markets – such as Western Europe, where payments have been largely commoditized – we expect to see only incremental change. The greatest opportunity will be in markets like Southeast Asia and Latin America, where cash usage has dominated and, in some regions, even increased during the pandemic.” Modernization programs not generating revenue growth Although many of the bank executives surveyed cited revenue growth as a key objective for their payments modernization programs, only 13% said that their bank’s payments revenue has increased by more than the average market growth rate of 6% in the last three years, and only 16% expect to grow payments revenues more than the anticipated average growth rate of 5% over the next three years. While payments transformation is part of most banks’ broader digital transformation efforts, two-thirds (65%) of bank executives said that COVID-19 has accelerated the shift to digital payments at a pace banks could not have predicted