Study: In 2028 Banks To Spend $57bn On Antiquated Payments Tech

IDC Financial Insights study shows that global banks will spend $57.1 billion on legacy payments technology in 2028, up from $36.7 billion in 2022. This will affect costs and slow growth.

The study, which was paid for by a payments company called Episode Six, says that if financial institutions don’t switch to paytech platforms that are ready for the future, they will lose up to 42% of their payments-related income and up to 21% of their legacy costs every year.

IDC says that the extra features that come with paytech that is ready for the future are the reason for the possible increase in sales. Some of these things are making new products, like tools for deferred payments or digital wallets (22% increase), getting more money from BaaS and PaaS (12%), and making money off of data (8%).

As for yearly savings, the study says that getting rid of legacy technology that is no longer needed could save 8%, cost savings from orchestration could save 5%, less downtime could save 4%, and development costs could go down by 4%.

IDC’s associate research head Michael Yeo says:

“Payments innovation is being driven largely outside of the banks’ walls. For banks and FIs that wish to be competitive in the next phase of payments, a future-ready payments platform will provide the core capabilities required, including quickly integrating a modern payments technosphere.”