Digital Wallets Are Reshaping the Bank Payout Landscape

PYMNTS reports that the rapid rise of digital wallets and instant settlement technologies is changing how payments are processed and how customer relationships are maintained. Funds that once moved through banks are increasingly being directed to alternative accounts, shifting the competitive dynamics of payment disbursements.

This evolution presents both operational and strategic implications for banks and payment providers as they navigate opportunities to retain value in their payout systems.

Research from PYMNTS Intelligence in collaboration with Ingo Payments quantifies this shift, finding that US banks and businesses leave $8.2 billion annually on the table as 71% of disbursements, ranging from gig-economy wages to insurance payouts, flow to accounts outside originating networks.

When payouts remain within a bank’s ecosystem, the sending institution benefits from recurring engagement, richer data insights, and opportunities for cross-selling financial products. The report estimates that converting just 20% of such out-of-network flows into in-network accounts could generate $1.6 billion in additional annual value.

This shift is driven by industries with high payment volumes. These include marketplaces, gig platforms, and wholesale trade, which face significant operational costs for managing payouts.

By using their own branded accounts, cards, or wallets, organizations can gain speed, control, and visibility while keeping payout activity within their own networks. This approach fosters deeper customer engagement and preserves data on payment flows, enabling more precise targeting and loyalty-building strategies.

Lawyers should be aware that payouts are no longer purely transactional in nature. They are strategic levers that affect both customer relationships and competitive positioning. Banks and institutions that build well-governed, yet seamless, in-network disbursement capabilities may strengthen loyalty, capture valuable data, and secure new revenue streams in a rapidly evolving payments ecosystem.