BPC: Challenger Processors Outperform Incumbents, as Fintechs Worth Flexibility ‘Above All Else’

Challenger card processing fashions are considerably outperforming incumbents, based on a brand new report by BPC, the worldwide fee options supplier, produced in partnership with Arkwright Consulting.

In line with the BPC report, ‘Subsequent-Technology Card Processing‘, new card processors, pushed by technological innovation and the rising affect of non-bank entities like retailers and gig economic system platforms, are gaining vital momentum.

A pattern of 10 challenger processors confirmed development charges 4 instances greater than the general card processing market, pushed by an API-first, cloud-native strategy to funds infrastructure. Between 2021 and 2024, challengers secured 127 new consumer contracts, in comparison with simply 26 secured by incumbents – highlighting a big disparity between the 2.

This development can be mirrored in processing volumes, with challengers reaching a compound annual development fee (CAGR) of 35 per cent, whereas market share expanded from 2.6 per cent in 2021 to 4 per cent by 2024. These outcomes emphasise the rising significance of non-bank entities in search of card processing providers, together with retailers, gig platforms, and fintechs that want agility and scalability not supplied by incumbent processors.

The information comes from BPC’s new report which goals to element the evolution of the cardboard processing market, the ecosystem concerned in facilitating and managing card-based transactions.

The report highlights that new entrants to the market are embracing cloud-native applied sciences that present seamless integration, sooner updates, and enhanced safety measures. This permits the challengers to fulfill the wants of a various vary of shoppers, from scaling fintechs to established monetary establishments.

BPC additionally provides that challengers are leveraging modern applied sciences to serve non-traditional banking prospects, comparable to retailers, gig ticketing platforms, and fintech firms, that are in search of processing providers which are adaptable, fast to market and customisable in an ever-changing funds panorama.

Leaving legacy bank-centred fashions behind

As challenger processors proceed to dominate new consumer acquisitions and improve their market share, they’re leaving legacy bank-centred fashions far behind. Challenger processors’ potential to offer extremely customisable fee merchandise is enabling innovation in monetary providers, empowering banks, fintechs and different non-bank entities to shortly launch new merchandise to prospects.

Subsequent-Technology Card Processing highlights that the enlargement of the market share for challenger processors is prone to proceed, combining open APIs, regulatory enablement and superior technical options to ship a compelling proposition to banks and non-bank entities.

Peter Theunis, SVP of gross sales, Europe at BPC, commented on the report taking a look at processors: “At BPC, we’re all the time wanting ahead, aiming to assist monetary establishments, fintechs, and SMEs to drive innovation by our next-generation platform. We recognise the significance of shifting in direction of cloud-native funds infrastructures and API-first integrations, enabling banks and non-bank entities to shortly launch new merchandise throughout a variety.

“By specializing in offering a future-proven platform and providers, we purpose to foster innovation and deliverance of remarkable digital experiences to our prospects. The speedy development of challenger processors demonstrates that banks and fintechs worth flexibility, scalability and technical innovation above all else when deciding on their card processing companion.”