Paris: The Capgemini Research Institute today released the World Payments Report 2026, its 21st edition, highlighting the mounting challenges banks face in retaining merchant business as PayTech competitors gain ground.
According to the report, 40% of small and mid-sized merchants are considering switching to PayTechs, citing reliability, innovation, and faster onboarding as key drivers.
World Payments Report 2026: Banks Under Pressure
The World Payments Report 2026 report finds merchant dissatisfaction to be significant, with satisfaction levels among small (15%) and mid-sized merchants (22%) far below expectations.
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While 66% of merchants still prefer traditional financial providers, this represents a narrowing advantage as PayTechs capitalize on agility and digital-first strategies.
Banks have deprioritized merchant services due to margin pressures, infrastructure complexity, and high operational costs. As a result, PayTechs have filled the gap by delivering what merchants value most: reliable infrastructure, fast onboarding, and high payment success rates.
Onboarding through banks can take up to seven days at a cost of $496, compared with PayTechs enabling go-live within 60 minutes for just $214.
Innovation Gap Widens Between Banks and PayTechs
The World Payments Report 2026 shows PayTechs are outpacing banks in technology adoption. Nearly 70% of PayTechs have implemented payment orchestration, compared with 47% of banks.
Generative AI adoption stands at 60% among PayTechs versus 41% among banks. In addition, PayTechs are aligning faster with regulatory changes, with more focus on central bank digital currencies, stablecoins, and digital identity frameworks.
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Fraud prevention and reliability remain pain points for banks. Only 26% of banking executives express confidence in their ability to deliver advanced fraud prevention, while merchants report annual revenue losses of 2% to payment fraud and up to nine hours of downtime.
World Payments Report 2026: Global Non-Cash Transactions Surge
The report highlights that global non-cash transactions have quadrupled in the past decade, surpassing 1.6 trillion in 2024 and projected to exceed 3.5 trillion by 2029.
Asia-Pacific leads the trend, recording nearly 800 billion digital transactions in 2024 with 21% expected growth in 2025. Meanwhile, North America posted 256 billion digital transactions in 2024 with a slower 7% growth forecast.
Instant payments and digital wallets are gaining share, rising from 13% of global non-cash payments in 2020 to 25% in 2024, while cards are expected to decline from 65% to 52% over the same period.
Opportunity for Banks in Merchant Services
Despite the pressure, the World Payments Report 2026 emphasizes that banks retain unique strengths such as trust, brand reputation, stability, and a broader suite of financial services.
Merchants indicated willingness to return to banks if they can match PayTechs in cost and services, while offering value-added features such as loyalty programs and seamless industry-specific integrations.
“Banks risk falling out of the merchant ecosystem entirely if they don’t act quickly,” said Jeroen Hölscher, Global Head of Payment Services at Capgemini. “To recover, they must reduce friction, adopt AI-led solutions, and put merchants at the center of their strategy.”
