As significant change is occurring in how we make retail payments, we are also seeing a number of new players, including telecommunications companies and the likes of Apple, Google and Paypal – a trend that is likely to continue. Banks, the traditional providers of an end-to-end payment service, are now facing competition from, and needing to co-operate with, other entities.
What role will banks play in the future? Will they continue to do what they have always done? Or will their role be limited to providing the trusted store of value while other technology providers capture the transaction service? These trends imply new sources of risk in payment systems and a potential need for refinements to the regulatory regime.