Financial institutions not prepared for future of payments
The 'Digital Payments and Mobile Wallets' Digital Banking Report found that there is no clear path to success in the new payments ecosystem, but that there are tremendous opportunities for firms that embrace collaboration to develop improved value-added payment solutions that can address the need for speed, insight and security.
In no other area of banking is there greater evidence of the convergence of customer insight, digital technology and advanced analytics than in the global payments ecosystem. Still, most industry observers would agree that the acceptance and use of digital payments and mobile wallets has been less than expected.
In August, Goldman Sachs stated that digital wallet adoption had been “underwhelming to date by nearly every objective standard.” The analyst stated that while Apple Pay was the dominant digital wallet leader, accounting for 90% of all contactless payments originating from a smartphone in the U.S., it was still struggling to gain real traction.
Alternatively, research shows that digital wallets and P2P are poised for a significant upsurge. According to the U.S. Bank Cash Behavior Survey, 47% of consumers surveyed say they prefer the use of digital payment apps versus cash (45%). In addition, a study from Juniper Research found more than half (53%) of global transactions at POS will be contactless within 5 years, compared to just 15% this year.
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