The majority of European executives from some of the world's largest banks, retailers and billing organisations have cited competitive pressures and the burgeoning threat of FinTech as reasons for increasing investment in their own payment systems, according to a new study by payments business ACI Worldwide and analyst firm Ovum.

Some 71% of European retailers and financial institutions said they plan to increase spending on payments technology in the next 18 to 24 months in the face of increasing competitive pressures in their respective industries.

More than 1,600 executives representing companies across the Americas, Asia-Pacific and EMEA were asked about their experiences, perceptions and expectations of payments and how this is shaping their current strategies – and security was identified as a particularly critical issue for retailers.

ACI and Ovum's research indicated that theft of customer payment details was a major concern for 70% of European retailers, with the growth in eCommerce resulting in card-not-present fraud becoming the most pressing issue for 59% of retailers surveyed.

David Bannister, principal analyst for financial services technology at Ovum, commented: "The payments industry is undergoing radical change that will have far-reaching consequences for banks, billers and merchants, as well as for the consumers and business customers to which they provide services.

"How all of the players in the industry adjust to these changes and interact with each other will be a crucial factor in their future success."

The report also uncovered that 59% of transaction banking executives believe that businesses will benefit directly from improved liquidity management, lower risks and faster payments, while payment initiators – in this case, retailers and billers – indicated they want to work more directly with banks to simplify the payments ecosystem.

Paul Thomalla, senior vice president at ACI Worldwide, remarked: "For all of these organisations, the key takeaway is that competitive pressures are driving up spending in the marketplace.

"Spending small, incremental amounts will only lead to an erosion of market share. The payment initiators of the world want to work directly with payment operators. By doing so, they will be able to lower payment costs, reduce complexity and increase investments to stave off the threat of new competitors."

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ACI Worldwide

Ovum