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Payment Trends Expected to Disrupt the Banking Industry by 2025

Several factors can change the way consumers pay for goods and services. For example, the continuing digital transformation and evolution of technology have made contactless payments pervasive while making cash payments a rarity. As well, the ups and downs of the economy have an impact on how people choose to manage their payments. And of course, innovations that save time and add convenience always seem to be welcome.

As we entered 2023, accustomed to pandemic protocols and bracing for an uncertain economic year, we at Phase 5 wanted to gain insight into how the world of payments might continue to change over the next 2 years. Compiled below are some of our findings based on the studies and research we’ve recently completed on this topic.

January 2023 Payments Study Results

In partnership with NYPAY (New York’s leading forum for payments innovators and leaders), Phase 5 conducted a short online survey in January 2023 with 91 financial, payment and consulting professionals and experts in the US to get their views on the payment trends they feel will be most disruptive to the banking industry over the next two years.

Here are the results:

  • About three in four respondents believe that ‘Buy Now Pay Later’ (BNPL) plans and peer to peer (P2P) payments will see the largest Fintech market share gain (in transaction volume) at the expense of traditional banks over the next two years. Only one in three feel that banks will lose market share to their fintech rivals on credit or debit cards.
  • About half expect that BNPL use among consumers will grow over the next year given the rise in interest rates, with 16% anticipating a significant increase in BNPL use.
  • Predictions for cryptocurrency are similar - over half of respondents believe that crypto will become more regulated and grow as a payment method over the next two years.

Deeper Dive into BNPL (based on recent Phase 5 studies)

  • Awareness of BNPL plans is high and rapidly increasing among consumers. While two in three Canadian consumers were aware of BNPL in March 2022, this had increased to three in four consumers by November 2022. The use of BNPL plans had also increased during this timeframe, from 23% to 30% of consumers. Among those BNPL users, 22% had used plans through a fintech provider in March, while the number grew to 27% in November 2022.
  • BNPL has considerable growth potential. One in three consumers would be encouraged to increase their purchase size and frequency if they had access to a BNPL plan at the time of purchase either in-person or online, especially those who have used a BNPL plan in the past. Emergency purchases and planned purchases are the top types of purchases for which Canadians would consider a BNPL plan. Those who have used a BNPL plan before are the most likely to consider using one for luxury or impulse purchases.
  • Younger consumers are an attractive segment for BNPL. Compared to older age groups, those between 18-34 years of age tend to have more positive perceptions about BNPL and are more likely to consider using it for online and in-person purchases and for higher amounts. They are also more likely to find BNPL plans offered by fintech providers to be more appealing. Overall, lower fees/rates and not having to use up credit card limits are perceived to be benefits of using fintech providers.

Deeper Dive into Crypto Currency (based on external research):

  • While consumers have primarily used crypto currency as an investment opportunity in the past, they are now also viewing crypto as a payment method, with Millennials and Generation Z having the most positive perceptions about crypto payments. According to a February/March 2022 PYMNTS survey with 2,334 US consumers, close to one in three (30%) US crypto owners cited making an online purchase and more than one in five (21%) an in-store purchase using crypto. One in four consumers preferred merchants that accept crypto, and close to one in three would switch to crypto-friendly merchants.
  • Merchants are getting ready for crypto payments in an effort to gain market share. Nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years, according to a Deloitte survey conducted in December 2021 with 2,000 senior executives at retail organizations in the US.


Banks need to develop strategies on how to take advantage of the BNPL opportunity and leverage existing strengths in order to succeed in this competitive market. Key concerns with using fintech providers include: lack of trust, privacy concerns when providing personal information, and having an extra monthly statement to keep track of. These elements represent opportunities for banks to develop a competitive advantage.

While banks have taken a more cautious approach towards introducing crypto payments (as there is no clear regulatory framework yet), it would be advisable for them to take proactive steps now. While they are undergoing digital transformations of their systems, programs, and offerings, banks should also consider building capabilities that will enable crypto payments in order to be prepared.

Contact us to learn more about any of the above studies, or to discuss how we can help your organization on its journey to customer-centricity. And if you’re part of a financial services organization that serves Small & Medium Businesses (SMB), follow us on social media so you don’t miss the spring release of our 2023 SMB Study. Based on responses from SMB owners and decision-makers, this study will explore the financial services that SMBs need, as well as how to deliver the best experience.

Written by Schumaila Kumar

Schumaila is a Vice President at Phase 5 who leads quantitative and qualitative research for a broad range of clients, primarily in the financial and information services sectors. A seasoned professional who manages large scale and complex projects, she is adept at ‘bringing out the story’ behind the data, illuminating research findings and delivering key insights that inform client decisions. Schumaila speaks four languages, holds a Master’s Degree in Communications from Wayne State University, MI, USA and a Master’s Degree in Interpretation from Innsbruck University, Austria.