Once the banking industry spoke of the payments system as “theirs,” and resisted all attempts to muscle in on their turf. It didn’t work. Challengers to the industry’s dominance have grown to become mainstream rivals. Witness the ongoing boom in “buy now, pay later” payments and the growing impact of companies like PayPal that have turned its P2P app Venmo into a full-fledged retail payment instrument.
Increasingly the payments side of banking has had to get used to sharing the business with both rivals using new rails as well as competitors sharing industry rails.
Banking is playing an endless game of payments “Whack-A-Mole.” But in this game, no matter how hard you hit, the moles rarely go down. In fact, they multiply.
While the industry keeps striving to do its own innovating, countering outsiders’ forays sucks up energy. Competing in the BNPL space is no simple matter, for example, as we’ll examine — but it also introduces unanticipated means of making money from the trend.
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