New study by IDC reports on the future of consumer payments

This figure is an increase from 60% in 2020, putting added pressure on incumbents such as banks, insurers and credit unions, according to the report. The IDC InfoBrief, Future Ready Payments Technology Reshapes the Playing Field for the Industry, highlights that while the payments world is changing and FSI paytech is not, pushing lucrative consumer payment volumes to non-FSIs.

Factors driving this change include a rise in new (or emerging) digital asset classes, real-time payments and new point of sale payment options such as Buy Now Pay Later (BNPL). As a result, the report reveals that by 2030, 60% of global consumers will have made a transaction using an asset class other than fiat currency, 95% of physical non-cash payments will be through contactless methods and BNPL, and cards will grow at 4% per year.

Regulation is also playing its part, with the study exploring how Open Banking, domestic real time payments schemes, and CBDCs are adding pressure to incumbent FSIs by shaking up traditionally safe revenue streams. The payments landscape is changing at pace, but the IDC InfoBrief finds that 73% of FSIs globally currently have paytech infrastructures that are not well equipped to handle payments for 2023 and beyond.

IDC deemed only 3% of FSIs to have ‘future ready’ paytech,meaning payments infrastructure that enables payments anywhere and everywhere for any possible present and future asset class. Future ready paytech also gives FSIs the ability to configure and reconfigure payment products to stay ahead of new entrant competition and consumer demands.