Contactless payment spells trouble for banks

Every other retail purchase could be digital and contactless by 2020, new findings by Accenture Financial Services say. According to the research, this represents 2.5 times growth in the next four years, knowing that contactless payment currently takes up 18 per cent of sales.

This might be super convenient for users looking for an easier way to shop, but it actually spells trouble for the banks – the uptake of ecommerce and contactless payments could see banks losing 43 per cent of their digital revenues.

Accenture estimates that payment initiation services (PISPs) will drop 33 per cent for online card transaction volumes, and 10 per cent of online credit card transaction volumes.

The company estimates that banks could lose more than £1.45 billion in card transaction revenues by this time.

However, there are upsides, Accenture says. That depends if they decide to drive new opportunities in order to recapture some of the lost revenue. They can pursue minimum compliance with the PSD2, facilitate and monetise API access, provision advice and new products and/or services, and expand the ecosystem and aggregate value.

“Choosing the right option will be key to how banks can retain relevance and safeguard against the potential consequences of market change and disruption,” Accenture said in a press release.

“They need to move beyond doing the bare minimum from a PSD2 perspective and put a proactive, strategic and collaborative wrapper around their payments propositions.”

Image source: Shutterstock/Oleksiy Mark