Description

Digital payments became more popular during the COVID-19 pandemic, putting pressure on merchants to provide frictionless and secure transaction options. The use of cash is rapidly declining, and the concept of a cashless society could become reality in the near future.

Digital payments industry growth is exceeding expectations year after year. Frost & Sullivan’s current projection is for the global market size to reach roughly $180 billion in 2026, more than double the 2021 market size of about $89 billion.

Customers’ expectations for their banks are changing too, with more emphasis on convenience. Demands include a seamless digital payment experience with accessibility from any device and cutting-edge data and fraud protection. Traditional banks are experiencing a new wave of competition in the payments industry in the form of nonbank digital players including technology giants and start-ups, which is compelling them to digitize and use new strategies and operating models in order to keep up with consumer demand.

The range of digital banks and wallets from which consumers can choose is placing more importance on a user-centric approach to help a fintech company stand out. A platform to integrate all available information about customers’ needs and preferences would include options to increase customer engagement, such as promotions, offers, and mobile wallet loyalty programs.

Younger consumers are a target demographic for buy-now-pay-later (BNPL) options. Banks have a unique advantage to compete against digital banking and offer BNPL options in that they can leverage this rich customer data and have comfortable footing in competing against fintech firms.

The Frost Radar™ reveals the market positioning of companies in an industry using their Growth and Innovation scores as highlighted in the
Frost Radar™ methodology. The document presents competitive profiles on each of the companies in the Frost Radar™ based on their strengths, opportunities, and a small discussion on their positioning. Frost & Sullivan analyzes numerous companies in an industry and benchmarks them across 10 criteria on the Frost Radar™, where the leading companies in the industry are then positioned.

Author: Philip Neff