Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices. 2016 will be a watershed year for the payments industry.Here are some key takeaways from the report:

The rise of PayPal and other disruptive services have been changing the face of the world of payments, and that disruption is likely only going to grow in the next several years.Д®van Bakker and John Heggestuen, analysts at BI Intelligence, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends. The growing variety of PayPal features could threaten legacy institutions or at least cause them to adjust their approaches if customers begin using PayPal and similar services to manage more of their money. PayPal also updated its app to highlight specific features, such as mobile order-ahead and peer-to-peer payments, in an effort to get users to try these services. All of this is an effort to improve brand awareness and convince customers to test new services. PayPal recently debuted an ad campaign and new slogan that focuses on how their technology could make money more accessible 24 hours a day. The average balance in PayPal accounts is $70, while legacy banks typically hold much larger sums, according to the Wall Street Journal.ДЄs players such as PayPal continue to strive to become integral in customers' everyday lives, they could become more of a threat to banks. And PayPal also provides loans and credit cards through partner banks.Д«ut customers don't use PayPal like a bank. PayPal users can store money in their accounts and then use the service to transfer money and buy products either in-store or online. Nonbank entities such as PayPal offer similar services to traditional financial institutions but consumers typically use them differently. banks, the high volume of money in PayPal's systems suggests that nonbank financial services providers will keep providing strong competition to legacy banks. When compared to the deposit accounts of major U.S. PayPal is not, and likely would never become, a bank in the U.S.Д«ut if it did, its customer account balance totals would actually make it the 21st-largest bank in the nation, according to research from S&P Global Market Intelligence cited by the Wall Street Journal. To learn more and subscribe, please click here. This story was delivered to BI Intelligence ' Payments Briefing' subscribers.

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