These technologies have the potential to improve payment experiences for customers as well as support new payment instruments. They are also potentially allowing non-traditional players without a large physical footprint to compete with the established financial institutions. Which brings me to the third force shaping the retail payments system – new participants. There are broadly three types of potential competitors.
Most similar to the incumbents are digital banks, sometimes called neobanks. These banks offer banking services typically by mobile app. They are unencumbered by legacy systems and physical branch networks and can use newer technologies, potentially making them more flexible and responsive to consumer needs.