Capgemini’s recently released World Payments Report for 2025 highlights significant trends in the payments industry, particularly the growing prominence of account-to-account (A2A) payments. This trend poses a potential threat to traditional card payments, which have historically been a vital revenue source for banks. As emphasized in the report, banks may face a strategic dilemma in response to the rise of A2A technology, which could lead to their commodification, reducing them to mere conduits for transactions. Walmart, alongside other large retailers and tech companies, emerges as a prominent player in this evolving landscape, indicating that the competition banks need to address comes not from within their ranks, but from these adjacent sectors that are rapidly innovating in payment solutions.
A compelling example of this shift can be seen in Brazil’s Pix instant payments system, which has garnered approximately 165 million users and fundamentally altered consumer behavior towards digital transactions. Many younger consumers are now more inclined to utilize instant payment systems over traditional banking cards, creating significant concerns for banks reliant on card business revenue. Industry leaders have identified Walmart as a significant competitor; its plans to enhance its online pay-by-bank option in 2025 using networks like The Clearing House Real-Time Payments and FedNow exemplify the intense competition banks face from these retail giants. As Walmart transitions its payment systems to provide instantaneous updates and transaction processing, the ramifications for the banking sector could be profound, urging banks to adapt or risk obsolescence.
Should Walmart successfully disrupt retail payments with its initiatives, it could set a precedent that other retailers will soon follow. The concept of “decoupled debit” is already evident in practices from companies like Target. This payment framework allows customers to link accounts directly to retailers, enabling seamless transactions that bypass traditional banking networks. By integrating A2A payments and shifting towards more consumer-friendly payment solutions, Walmart could redefine not just retail payments, but also how other industries interact with consumers. This transition underscores a critical evolution in payment methods that favors direct engagements between consumers and retailers, rather than through banks or payment networks.
Beyond payment platforms, Walmart’s extensive reach into the financial services sector presents another avenue of strategic advantage, particularly considering its vast customer base, which includes many underbanked individuals. By leveraging technology and their distribution capabilities, Walmart could offer essential banking services that cater to these underserved demographics. Proposals such as low-cost debit and credit options, along with personal loans facilitated through a simple app interface, showcase Walmart’s potential to transform financial interactions. This thrust into financial services signifies that traditional banks risk losing not just payment transactions but also fundamental banking relationships to retailers who can innovate more rapidly and address consumer needs directly.
The future may not hold endless apps for consumers, contradicting the notion that people will need a plethora of retail apps for every brand they frequent. Instead, shoppers are likely to gravitate towards a handful of essential apps, often consolidated under larger retail and payment platforms. Consumers will likely opt for the most convenient methods for payments—be it a retailer’s app, a banking app, or even wearable tech—simplifying their digital interactions and reflecting a perceptible shift away from traditional cards and cumbersome payment methods. This evolution could offer retailers new ways to engage with customers while also asserting more influence over the payment landscape, shifting power back toward consumer-centric models.
In light of these developments, bank strategists need to rethink their roles and tactics within the rapidly changing payments ecosystem. With competition intensifying from non-bank entities like Walmart that can innovate payment methods, banks might find that merely preserving their interchange margins is no longer viable. To thrive, banks must focus on providing value-added services that enhance customer transactions, emphasizing safety, security, and insightful data analytics. This approach could allow banks to retain relevance despite the transformations occurring around them, even as they navigate a landscape where the conventional roles of banks, retailers, and technology firms blur. Ultimately, it will be crucial for banking institutions to recognize and respond to these shifting dynamics if they hope to maintain their standing in a competitive financial environment increasingly shaped by retailers and tech companies.