While mobile technology and third-party providers have generated lots of buzz in payments, true disruption is fighting against the decades-long processes established through banks and card networks.
What's making innovation even more difficult is that new and new entrants rely heavily on the very systems they claim to disrupt.
"The unique aspects of the payments business is that there are two customers in merchants and consumers, and any entity trying to target only one customer isn't in a very strong position to be a disruptor," said Subhajit Das, technology consultant at India-based Tata Consultancy Services and author of a report on "hype and reality" of payments disruption developed with the help of Clayton Christensen Institute.
Any company seeking to disrupt the current payments food chain almost always has to rely on the card networks and its system of acquirers and issuers already in place, Das said.
"It is impossible to attract both merchants and consumers without the work of the incumbents," Das added.
Still, payments is the one facet of the financial services industry that has drawn attention from many suitors, even ones with plenty of financial clout and massive customer databases.
As such, the large technology companies like Apple and Google are likely in the best position to take a shot at truly disrupting the status quo. But even those companies have chosen to collaborate with incumbent payments networks to get their initial products in front of consumers and merchants, Das said.
A more glaring example of the need for collaboration recently occurred when PayPal, likely the most prolific disruptor for its presence in e-commerce payments, agreed to extend the olive branch to various banks and to Visa, Mastercard and Discover in agreeing to not attempt to steer its users away from card payments through the PayPal platform. Even as a true disruptor in e-commerce, PayPal had its roots firmly in ACH-based payments through customers' checking accounts, presenting a significant thorn in the side of card networks in the process.
It isn't even entirely accurate to consider the likes of Uber and other travel or fast-food related mobile payment services to be true disruptors. They have changed how the consumer interacts with payment choices, but they still use the traditional card networks and banks under the hood to accept and process transactions, according to Tata.
Rather than examine the entire payments landscape, Tata focused on consumer heavy person-to-business and person-to-person payments for its report. In that regard, new entrants into payments such as Google Wallet, Circle and Venmo focus only on the consumer, while others like Stripe, Square and Revel focus on the merchants.
Apple Pay and Android Pay serve as examples of new services that attempt to leverage a presence with consumers to build adoption among merchants, while PayPal's Braintree might be more inclined to leverage its merchant base to lure in consumers, the report said.
In either case, consumers are introduced to a new technology and a change in their payments options, but a true change to the current payments business model does not occur, Das said.
The notion that someone has to, or even can, "win" the mobile wallet competition ignores the fact that consumers currently have as many as 15 payment options to choose from when counting plastic cards, payment apps and cash in their pockets, Das said.
"Consumers will continue to use the payment option that best suits the circumstance," Das said. "If I need something done quickly, I may choose my mobile wallet. If it is more beneficial to use my premier credit card and get loyalty points, I would choose that."
Of all the potential disruptive technology, the blockchain distributed ledger system common with bitcoin likely has the most potential to attract financial services and payments attention and actually change a business model, Das said.
Earlier this year, Axis Bank in India agreed to partner with Ripple to begin blockchain transfers of cross-border payments.
"Blockchain creates efficiency and innovation, so it can reduce costs and improve products and services," Das said. "On the business-to-business payments side, there appears to be a need for blockchain technology, so this will enable a new type of entrant into the picture that could even address consumer problems. If that were to happen, it could benefit banks."
Another area ripe for disruption continues to be initiatives to reduce the use of cash.
"From a global perspective, there are several countries in which cash is used far more compared to cards," Das said. "Yet, cash often is not the best solution, so innovation and disruptors can emerge in this area."
The use of phone-based M-Pesa as a payment method in cash-heavy Kenya in Africa has evolved to the point where Kenya Commercial Bank is working with Visa and seeking a telecom license to deliver mVisa to compete with M-Pesa. It serves as an example of a disruption that caused banks to realize a change in their business model was unfolding, and it was time to adapt.
At the same time, India is managing its use of cash in the system, and introducing mobile options for payments.
"Even though we have had mobile wallets and plastic cards for a long time, it will still take time for them to take hold here in India," Das said.