{"id":4700,"date":"2019-09-18T19:55:19","date_gmt":"2019-09-18T19:55:19","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=4700"},"modified":"2022-02-24T22:22:59","modified_gmt":"2022-02-24T22:22:59","slug":"as-fintechs-like-square-and-stripe-threaten-bank-revenue-banks-turn-to-competitors-for-help","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/archive\/as-fintechs-like-square-and-stripe-threaten-bank-revenue-banks-turn-to-competitors-for-help\/","title":{"rendered":"As Fintechs Like Square and Stripe Threaten Bank Revenue, Banks Turn to Competitors for Help"},"content":{"rendered":"\n

It\u2019s obvious to many observers that the rising competition from fintech companies including the likes of payment facilitators\u00a0Square<\/a> and\u00a0Stripe<\/a> is having an impact on banks.<\/strong><\/p>\n\n\n\n

A recent report from\u00a0Accenture<\/a> puts a dollar amount on that impact.\u00a0<\/strong><\/p>\n\n\n\n

According to the report, competition from nonbanks, along with other environmental factors, could cost banks $280 billion in payments revenue by 2025. <\/p>\n\n\n\n

The study predicts that payments revenue will grow at 5.5% annually \u2013 climbing from $1.5 trillion in 2019 to $2 trillion in 2025, representing $500 billion in incremental revenue. Much of that revenue will be claimed by competition from nonbanks and other factors such as price compression, the consulting company said.<\/p>\n\n\n\n

The news isn\u2019t all bad for banks, however. Those that adapt their business model to the changing environment and distinguish themselves with a better customer experience will retain more of that new revenue, Accenture said.<\/p>\n\n\n\n

\u201cRather than being at the forefront of the new wave of the booming payments market, banks are feeling the heat from new competition and seeing their margins squeezed,\u201d Gareth Wilson, Accenture\u2019s global payments lead, said in a press release<\/a>. <\/p>\n\n\n\n

\u201cWe face an inevitable world of instant, invisible and free payments, which spells trouble for banks that don\u2019t want to be relegated to the plumbing of payments. But it also presents an opportunity to tap into a new business model based on this digital boom.\u201d<\/p>\n\n\n\n

A separate\u00a0report<\/a> from CB Insights suggests that leading banks are already well on their way, shaping their strategies in response to this opportunity. An\u00a0article in CNBC<\/a> cites data from the research firm that shows a trend among big banks of investing in potential competitors. They\u2019re seeking either to tap into the fintech companies\u2019 technological know-how, benefit from the companies\u2019 growth, or both.\u00a0<\/p>\n\n\n\n

Payments and settlement represent the top area of fintech investment for banks such as Citigroup, Goldman Sachs and JP Morgan Chase, according to the CB Insights data. The article highlighted the investments that JP Morgan Chase has recently made in the business through its acquisitions of PFs\u00a0WePay and\u00a0InstaMed.<\/p>\n\n\n\n

\u201cThis is helping them diversify the overall business,\u201d CNBC quoted WePay\u2019s COO Tina Hsiao as saying. \u201cWe fit a certain product set and can underpin all of J.P. Morgan\u2019s small business merchant payments, which could be a big future revenue generator.\u201d<\/p>\n\n\n\n

Hsiao told the publication that Chase was benefitting from WePay employees\u2019 knowledge about technology and recruiting, calling the deal \u201ca bit of a reverse acquisition\u201d in that way.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s obvious to many observers that the rising competition from fintech companies including the likes of payment facilitators Square and Stripe is having an impact on banks.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1015],"tags":[14,164,303,411,455,643,828,846,876,877,973],"class_list":["post-4700","post","type-post","status-publish","format-standard","hentry","category-archive","tag-accenture","tag-chase","tag-fintech","tag-instamed","tag-jpmorgan","tag-payment-facilitator","tag-square","tag-stripe","tag-the-payment-facilitator-landscape","tag-the-payment-facilitator-model","tag-wepay"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4700"}],"version-history":[{"count":3,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4700\/revisions"}],"predecessor-version":[{"id":8427,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4700\/revisions\/8427"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4700"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}