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The retail payments industry is facing rapid disruption. This report examines how the industry should respond by creating commerce hubs to deliver value to both consumer and merchant customers.


  • For credit card purchase transactions alone, interchange revenue for issuers across the EU-28 will drop from €5.4bn to €2.3bn, a reduction of €3.12bn per year. At a customer level, this is just under €29 per card account.
  • There is a strategic opportunity for the industry to invest in new payment-related services to enhance the propositions currently offered to merchant and consumer customer bases.
  • At the heart of this approach is the opportunity to change the dynamic of a bank's relationship with its merchant customers, away from being a provider of services and toward becoming an enabler of sales growth.

Features and Benefits

  • Understand the scale of the challenge facing retail banks as the retail payments market develops.
  • Learn how investments in new services related to the digital channels can drive new sources of value for consumer and merchant customers.

Key questions answered

  • What are the future challenges facing banks as the retail payment industry evolves?
  • How should the industry leverage its customer and data assets to create new commerce enablement propositions?

Table of contents


  • Catalyst
  • Ovum view
  • Key findings

Creating deeper customer engagement around payment services is vital for retail banks

  • Competition and regulation are weakening the relationships that banks have with their customers
  • Interchange regulation has exacerbated the wider customer engagement challenge facing banks in the payment space

Retail banks should invest to remain at the heart of the future digital commerce value chain

  • Incumbency and customer trust are underleveraged assets
  • Approaches that bring commerce-enabling services into the equation can drive value for both consumers and merchants
  • Creating a content marketplace can drive new revenue lines and deepen customer engagement
  • This approach can also be used to defend market share in the retail payments space


  • Further reading

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