Alternative Payment Methods Threaten Payment Industry
According to research by KPMG and RBS, back-end data management and processing will suffer if firms fail to keep up with the fast-growing alternative payments market.
The report, dubbed The 2014 World Payments found that, in 2013, alternative payments increased globally by 9.4%. It also said that 800 billion non-cash payments will be made over the next 10 years.
As the number of payment services increase, so do the amount of online transactions made. In the last four months, for example, Apple announced Apple Pay, PayPal said it would become independent from its parent firm eBay, and TfL began accepting contactless payments on the London underground transport system.
The report predicts online payment growth to slow, expecting it to grow only 15.9% over the next year. Mobile payments are set to increase and the World Payments Report predicts m-payments will grow by 60.8% by 2015.
The report also highlighted the current trend of financial legacy systems being unable to keep up with the processing needs of new and innovative customer-facing initiatives.
Despite large legacy systems, the financial services industry invests heavily in financial services and technology startups, to help drive new technologies and innovation.
Alex Kwiatkowski, head of IDC Financial Insights Europe said: "There's a lot of hope and expectation about trying to let technology have a transformative effect on what has been a traditional method of using cash and, more latterly, card."
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