Press release

Free money: How to adapt in a world where payments are costless

Free money: How to adapt in a world where payments are costless

As payments are bundled together with other services and consumers expect them to be costless, banks and retailers need to rethink their strategy

  • September 17, 2019
  • min read

Press release

Free money: How to adapt in a world where payments are costless

London/Singapore – September 17, 2019 – Payments are having their moment in the limelight as technological advances and the rise of e-wallets and open banking continue to redefine customer expectations. While this phenomenon is most prominent in Asia, the rest of the world is primed to follow suit. Banks, retailers and others who are used to making money from payments need to rethink their strategy now.  

This is the key takeaway from Bain & Company’s new report, Payments Just Want to be “Free” –How can Providers Adapt?, published ahead of Sibos 2019 in London.

“Payments are at the forefront like never before,” said Thomas Olsen, a partner with Bain & Company’s Financial Services practice and a co-author of the report. “What’s happening now in Asia foreshadows the types of developments that could soon occur everywhere else. The experience is simple and seamless, and increasingly innovative providers keep raising the bar when it comes to what consumers and merchants expect.”

The profit pool for traditional players that do not adapt will suffer.  Thus, companies across industries – banks, retailers, and tech platforms, for example – need to rethink their strategy now.

Some strategic options for existing payments providers include:

  • Consolidating through mergers and acquisitions, in order to become more efficient in processing and innovation, enter new geographies or business segments, and to expand their opportunities for cross selling
  • Adding services beyond traditional terminals and transaction processing, such as lending to merchants and consumers, and business management software that includes payroll, inventory and customer relationship management
  • Facilitating e-commerce transactions and integrating payments with the store register.

“The future view of payments is increasingly clear: free, easy and embedded into other products and services,” said Glen Williams, head of Bain & Company’s global

Payments practice. “A critical mass of consumers will soon demand ‘invisible payments’ at most places they shop, so retailers should start thinking now about what this means for them.”

The banking sector will also be to be affected by the changes in payments, and banks will have to decide which of their current profit pools they cede in order to stay relevant.

“The innovation in payments is moving at a breakneck pace – and anyone who is currently making money from payments needs to think about how to broaden their offering into additional business lines to ensure that they maintain profit levels in the future,” said Mr. Williams. “The winners will be those who define clear choices and take action to redefine themselves and solidify their place in this new and exciting payments ecosystem.”

Editor’s note: To receive a copy of the report or arrange an interview with Mr. Olsen or Mr. Williams contact: Aliza Medina at  

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