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Banks to spend $57bn on legacy payments tech in 2028 - study

Banks to spend $57bn on legacy payments tech in 2028 - study

Global banks are expected to spend $57.1 billion on legacy payments technology in 2028, up from $36.7 billion in 2022, impacting costs and limiting growth, according to research from IDC Financial Insights.

The study, sponsored by payments outfit Episode Six, claims that financial institutions are set to miss out on an additional 42% of payments-related revenue and legacy cost savings of up to 21% annually if they fail to migrate to future-ready paytech platforms.

The potential revenue boost, says IDC, is derived from the additional capabilities delivered by future-ready paytech. These include new product creation, such as deferred payments or digital wallet platforms (22% increase), BaaS and PaaS revenue (12%), and data monetization (eight per cent).

As for annual savings, the study argues that retiring unneeded legacy technology could save eight per cent, orchestration cost benefits five per cent, downtime reduction four per cent, and development cost reductions four per cent.

Michael Yeo, associate research director, IDC, says: "Payments innovation is being driven largely outside of the banks’ walls. For banks and FIs that wish to be competitive in the next phase of payments, a future-ready payments platform will provide the core capabilities required, including quickly integrating a modern payments technosphere."

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