Digital Wallets
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Digital wallets emerged as a focal point in the payment technology arena, garnering substantial attention from surveyed bankers. The survey reveals that just over half of the respondents prioritize digital wallets, signifying the growing importance of this technology in facilitating convenient transactions.
Institutions with assets ranging from $1.1 billion to $5 billion place particular emphasis on digital wallets, with a significant 64% choosing it as a key priority.
This marks a substantial shift from the previous year, where digital wallets were prioritized first by only 16% of bankers and first or second by 37%. Investment in this space could also lead to additional interchange revenue from credit and debit cards that are top of the digital wallet.
Credit Cards
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Experiencing a significant uptick from the previous year’s 4%, credit cards emerged as a notable priority. The surge reflects a renewed emphasis on traditional payment methods.
According to the most recent data from the New York Federal Reserve, consumer credit debt has surpassed $1.03 trillion, a notable increase from the pre-pandemic figure of $806 billion.21
Analysts attribute the heightened emphasis on credit cards to consumers’ ongoing economic challenges, including factors like inflation, high interest rates, the conclusion of pandemic-related stimulus checks and lenders adopting a more risk-averse stance toward personal and small-business loans.
Debit Cards
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Continuing to hold a significant position, debit cards maintained their relevance as a core payment technology and interchange revenue driver for surveyed institutions.
Peer-to-Peer (P2P) Payments
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While slightly lower than the previous year’s ranking, P2P payments remain a noteworthy focus for banks, emphasizing the enduring importance of person-to-person transaction capabilities. Notably, some are interested in offering P2P through real-time payment rails.
Buy Now Pay Later (BNPL)
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Creating a financial services ecosystem includes developments in open banking and BaaS, wherein data is shared between multiple entities. While the field is rife with opportunity, vendor management must be handled carefully.
Technology providers that enable open banking carry a great deal of responsibility in maintaining security and overseeing the flow of information between banks and technology partners. However, the onus of due diligence and risk management falls squarely on financial institutions. As open banking continues to become the norm, banks must ensure that the partner company adheres to regulations, refrains from misusing information and avoids using it for resale purposes.
Same-Day ACH
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Same-Day ACH captured moderate attention, reflecting the industry’s acknowledgment of the continued importance of expediting ACH transactions.
Wire Transfers
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Anticipating a future shift in payment preferences, industry experts foresee continued shifts away from wire transfers and same-day ACH, driven by the broader adoption of instant payment solutions.
