It’s not news that revenue from payments is at risk. According to Accenture Research, by 2025, nearly 15% of retail payments revenue will be at risk from card displacement by real-time payments, competition from non-banks and digital disruptors, and pricing compression.
But it’s not just the revenue that is being lost. And it’s not just the behind-the-scenes ACH processing that financial institutions must still perform. Payments also are important—possibly most important—because of the opportunities to deepen relationships directly through transaction interfaces and indirectly through the use of payments data to personalize interactions with customers.
A recent JD Power study showed that satisfaction is significantly higher among customers who have linked their bank accounts to digital payment services (e.g., Zelle, Apple Pay, PayPal, Venmo) than among those who have not. Among P2P (person-to-person) payment providers, direct integration with Zelle generates the highest boost in bank customer satisfaction. Perhaps this is because in this age of automated deposits and payments, banking fades into the background except when paying a friend or making a purchase.
These realities call for strategic decisions about how payments will fit into your business model in the years to come. These decisions are highly dependent on your unique target markets and their behaviors. Here are nine things to consider as you reach for clarity on your payments strategy:
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