Research: Popularity of mobile payments is creating new retail payment use cases
- The global payments industry is taking strong steps towards an ecosystem approach.
- Take up of open banking has been lukewarm, so payment players should prioritize strategies within these new parameters.

Changing consumer preferences around mobile payments are impacting the way banks invest and operate in technology.
Banks are changing the way their product and tech teams are organized and creating innovation programs to try and keep up with the changes. Evolving fintech trends also have some banks looking to partner.
Continuous disruption of the value chain and dynamic innovation finds the payments industry at a junction, according to new research from CapGemini.
New retail payment use cases

- Omnichannel integrated experiences: Customers increasingly expect to pay with contactless cards, wearables and IoT devices and they expect their financial institutions to keep up.
- Automated payment experiences: Today's consumers want to be able to whip out their phones and make a payment via a digital wallet like Google Pay. They also want this payment use case to share data with their IoT device or Card-on-File.
- Alternate payment methods: Whether its via a conversational interface or in-car, cellular IoT payments are expected to grow at a 30 percent CAGR through 2023.
- Rewards and loyalty: With so many options and learned experiences about the value of rewards, consumers are increasingly expecting to receive value out of reward and loyalty programs.
Fintech move from partners to competitors

Some technology firms chose to begin their growth trajectories as B2B players. Some of these early partners are turning into competitors as these firms tweak their business models. Bank executives see segment-focused value propositions as the most directly competitive to their own businesses, according to CapGemini.
Big tech seen as a threat
An example of a big bank + technology partnerships is the new Apple Card. Launched in collaboration with Mastercard and Goldman Sachs, the card offers no fees and some features unique to the Apple ecosystem.
There are other examples of big tech partnering with the banking industry, though most are in countries outside the U.S. Microsoft partnered with India's Yes Bank and Mobikwik to enable P2P payments. Amazon partnered with JP Morgan and Bank of America in the U.S., as well as with Western Union, to offer a variety of financial services, including a checking account, lending, and money transfers. WeChat Pay partnered with France's BNP Paribas and Wirecard in Europe as it plans to expand into the West.
Open Banking provides an opportunity for banks

Open APIs require banks to take the unprecedented move of opening up their systems and data. Few banks have launched large scale API initiatives and the ones that have frequently relegate banks to playing service provider and taking a backend role.
But open APIs offer banks the ability to become one-stop shops for their individual and corporate customers -- even beyond everyday banking and financial management. Though open banking has the potential to evolve banks into the new payments ecosystem, they're not prioritizing allocating budget for it. It ranks third in terms of budget for transformational projects, according to CapGemini research.
Deep API work is slow primarily because banks are afraid that they'll lose customers by sharing their data . The data show that banks are making more progress in areas that share non-critical and basic data.
More than half of survey respondents said that they had implemented instant payments APIs. That number is lower when it comes to APIs that share data. As the industry moves to more of an ecosystem approach, incumbents should leverage ecosystem-based business models to sustain their marketshare. 44 percent of banks intend to build and manage their own ecosystem.