The Payments Processing Opportunity for Banks

Moving Account-Based Payments from Cost Centre to Revenue Stream

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Insights include

The model used by most banks for processing account-to-account payments is under strain. Despite payment services being mission critical, a bank’s payment operations are largely viewed as a cost centre. Crucially, margins are being squeezed from all sides, making current approaches increasingly unsustainable. Engaging a third-party processor or taking a PaaS proposition from a vendor are two options that are gaining traction, and offer clear alternatives to managing this internally. However, this shift is also a commercial opportunity for those banks prepared to enter the market.

To better understand these challenges, Icon commissioned Celent to carry out research exploring the payment processing opportunities for banks, where they surveyed and interviewed senior executives at several tier 1 banks.

Key takeaways include: 


  • 86% of banks find margins on payments challenging to maintain (up from 59% in 2021).
  • 57% of banks already work with processing partners so they can focus their own resources on innovation.
  • 87% of tier 1 banks are considering spinning out payments as a separate business.

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