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Home > Banking > The one tech that could be banks’ leg up against fintech disruptors

The one tech that could be banks’ leg up against fintech disruptors

Published by Jessica Weisman-Pitts

Posted on March 18, 2022

4 min read

Last updated: January 20, 2026

Horizontal image of contactless payment with smartphone

Vijay Sondhi is the CEO of NMI.

How can technology like tap-to-mobile payments enhance relationships between banks and merchants?

Tap-to-mobile technology enhances relationships between banks and merchants by giving merchants the advantage they need to compete with larger businesses. Many merchants struggle with onboarding new payments systems and tap-to-mobile helps lessen these pain points, such as setting up new payment systems and the hefty costs that come with it. NMI’s recent study found that the biggest challenges of setting up payment systems for non-cash-only SMB owners were all related to onboarding: paying for the system and system setup (47%), setting up the system equipment and hardware (46%), and training employees how to use the system (39%).

Banks can help merchants overcome these challenges by implementing a full commerce payments platform to service all of their merchants’ payments needs. This will make it easier for merchants to manage payments across their entire business and do business on any channel by unifying the payments experience on one bank-enabled tech stack. It also allows banks to offer new payments technology, such as tap to mobile, directly to their merchant customers.

How does this technology help banks and merchants compete with fintech disruptors like Square and Stripe?

Tap-to-mobile technology simplifies payment processing for merchants since itʼs easy to set up and requires no additional hardware compared to traditional point-of-sale (POS) terminals. Merchants only need to download an app on their phone and they’ll be able to accept contactless payments. Tap-to-mobile payments are just one piece of the puzzle that helps banks compete with fintech disruptors like Square and Stripe. By becoming a streamlined one-stop-shop for all of a merchant’s financial needs, banks can better serve their customers and offer cutting-edge payment technology to beat the Squares and Stripes of the world at their own game.

For banks, tap-to-mobile allows them to be competitive with Square and Stripe because it’s one way to enable payments for merchants. This, coupled with enabling omnichannel commerce across other channels, gives banks the ability to present cost-savings opportunities helping them process transactions no matter what channel they come from. By reconstructing their payments strategy, banks can control the payments process and easily integrate vital technology, like tap-to-mobile, into merchants’ businesses. This slows down non-traditional payment players’ moves into banking by opening up a critical line of service with merchants.

What do you predict to be the next wave of cutting edge payment technology? What impact will this have on both the end consumer and banks?

As the global chip shortage continues, innovative technology like contactless payments and digital wallets are on the rise. Contactless payments allow merchants to provide a secure, convenient and touch-free experience for their customers to improve their checkout experience. In addition to contactless payments, digital wallets offer another convenient merchant transaction by helping banks streamline the payments process and a faster, safer payment process. Digital payments will continue to evolve, allowing banks to personalize their service through tailored communication and customer interaction which, in turn, builds better relationships with consumers.

How can banks leverage technology to build lasting customer relationships?

Banks already have a leg up on non-traditional payment players: their existing relationships with merchants. Since merchants already use banks for services like taking out loans or checking accounts, it’s easier for banks to offer their own payments solution to close the gap that nontraditional payments can fill. Banks that leverage their technology allow the consumer to choose how they pay, whether it’s through contactless payments or traditional physical cards. This enhances customer relationships as it provides consumers with flexible payment options. By partnering with a payments platform, banks can better support merchants’ move to digitization and provide their merchants with the right payment technology. In turn, this helps banks manage payments across their entire business easily by moving away from a system of disparate payment solutions to a full commerce payments platform.