Payment Fintechs Gaining Ground Over Banks in Merchant Acquiring
As the digital landscape continues to evolve, banks are finding themselves in a tight spot. Once the undisputed leaders in merchant payment services, they are now facing stiff competition from payment fintechs like Adyen, PayPal, and Stripe. These fintech giants are not just offering traditional payment processing services but are also providing value-added services such as fraud prevention, analytics, financing, and loyalty tools, thereby providing a more comprehensive package for merchants. This is a key insight from Capgemini’s 2026 World Payments Report.
According to Elias Ghanem, Global Head of Capgemini Research Institute for Financial Services, “If banks want to be back in the game, winning back merchants will mean playing differently.” He further added that a significant shift is taking place between traditional banking institutions and new-age fintech players.
Merchants Dissatisfied with Banks
Capgemini’s report highlights that a large number of merchants are dissatisfied with their current banking relationships. Only 15% of small merchants, defined as companies with up to $100 million in annual revenue, said they were satisfied with their banking relationship, and just 22% of medium-sized merchants with revenues between $1 million and $100 million expressed satisfaction with their bank’s services. Notably, about 40% of small and medium-sized businesses indicated plans to switch from a bank to a payment fintech within the next 12 months.
This shift towards payment fintechs is attributed to their ability to offer embedded products such as business accounts, lending, buy now/pay later options, and other data-centric operational tools that extend beyond basic payments. One such fintech, Adyen, which works with global merchants like eBay, Netflix, and Spotify, is focusing on optimizing the payment experience for speed, cost, conversion, and fraud prevention. “It’s all about being in control of the value chain as much as we can with that license to act and that position in the ecosystem,” said Carlo Bruno, Adyen’s Vice President of Product.
Banks Struggling to Keep Up
While fintechs are making significant strides, banks are not sitting idly by. JPMorganChase remains the world’s largest merchant acquirer, and U.S. Bank has taken steps to enhance its offerings to merchants. However, banks are disadvantaged on the technology front and need to modernize their merchant servicing platforms to compete effectively.
According to Capgemini’s Ghanem, banks need to start offering more value-added services and real-time payments to attract merchants back into their ecosystems. Despite the challenges, 66% of merchants still trust their banks for financial services over payment fintechs, indicating an opportunity for banks if they are willing to adapt.
“If you decide that you want to play, you need to play the game that is being played. The only way to play is to build the right capabilities to be back in the game. Modernize your infrastructure, your onboarding and your orchestration to operate effectively,” Ghanem advised.
To sum it up, banks need to embrace the changing landscape and evolve their offerings to match the comprehensive services provided by fintechs. By focusing on data, liquidity, and trust, they can create differentiation and win back merchants’ business.
For more details, refer to the original report Here.
