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      The pressure on financial institutions (FIs) and retailers to modernize payment systems and infrastructure is immense. The payments environment is evolving rapidly with a range of new payment alternatives and channels competing for market share; new technologies like contactless payments and QR payments are gaining traction (particularly in emerging markets); and new ancillary services like Buy Now, Pay Later (BNPL) are growing in popularity.

      Modernizing payments: Global perspectives from financial and retail executives on payment modernization strategies and trends, presents findings based on a survey of 810 financial institutions and 690 retailers, conducted by KPMG International in September 2024, to assess current payment modernization programs and progress.

      Explore global perspectives, regional analysis and country spotlights, and the challenges and opportunities shaping payment modernization around the world.

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      Modernizing payments

      Global perspectives from financial and retail executives on payment modernization strategies and trends
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      Findings at a glance

      Financial institutions

      key factors fis
      top five benefits fis

      Retailers

      key factors retail
      top five benefits retail

      Key takeaways

      • Urgency:

        The vast majority — 93 percent of financial institutions and 87 percent of retailers — are either currently modernizing their payments infrastructure or are planning to do so (on average, they will begin within the next six to eight months).

      • Motivation:

        Changing customer expectations ranks as the top driver for Fis and retail organizations. FIs are motivated by regulatory requirements and the need to update legacy systems, while retailers are motivated by competitive pressures and cost considerations. 

      • Resources:

        FIs and retailers are allocating significant resources towards modernization. Survey respondents indicated that on average, FIs plan to spend around US$18 million and allocate 36 people to their programs. Retailers expect to spend an average of US$4.1 million and allocate 23 people to their programs.

      • Benefits:

        Respondents (both Fis and retailers) agree that payment modernization will deliver improved customer experiences, faster transaction processing and long-term cost savings. Retailers’ top expected benefit is customer experience improvements, while FIs are primarily anticipating cost savings.

      • Challenges:

        FIs and retailers are concerned about the cost and potential disruption of implementing new payment systems. Retailers are also worried about training staff to manage the transition, while FIs are concerned about the complexities of integrating new platforms across multiple systems.

      Consumers no longer see payments as a mere transaction—they expect seamless, secure, instant experiences. Businesses failing to modernize risk losing relevance in a digital economy.

      Gonçalo Traquina

      Partner, Head of the Customer Advisory

      KPMG Lower Gulf

      Contact us

      Gonçalo Traquina
      Gonçalo Traquina

      Partner, Management Consulting - Financial Services Leader, Head of the Customer Advisory

      KPMG Lower Gulf