Financial technology startups shaking up the payments industry are least likely to be acquired by established banks, despite the increasing efforts by financial institutions to become more innovative.

The most likely end-game for a successful startup developing innovative new ways for making payments in the rocketing FinTech sector is being acquired by a major technology firm such as Apple and Google.

After being acquired by a tech giant, the most likely future is being bought by an established payment tech vendor or a payments scheme, according to 40 leaders working in FinTech payment startups in 23 countries across the world surveyed in a new report.

An IPO or other type of public offering is also a less likely option, but more favourable than being bought up by a bank.

"Large, regulated organizations answering to shareholders are not typically breeding grounds for innovation," said one of the 40 leaders surveyed as part of the Payments Innovation Jury Report.

"Mould-breaking ideas are more the province of startups, but 'driving' innovation requires resources, something the tech giants and networks can leverage once they recognize and acquire innovative small businesses"

It's no surprise with tech companies making inroads into the space occupied by financial services firms, according to the author of the report and chairman of the payments innovation jury, John Chaplin. Significant acquisitions made by tech firms include Samsung buying LoopPay and Google buying SoftCard and TxVia.

"This is because most FinTech firms partner with and/or supply multiple banks and therefore being owned by a single bank could be a problem. There are some notable exceptions to this such as; Barclays’ acquisition of Logic Group, BBVA’s of Simple and Commonwealth Bank of Australia’s of banking technology firm Tyme, but they are rare," said Chaplin.

FinTech firms are disrupting across the payment spectrum, including remittance, online and in store retail, peer-to-peer, b2b and mobile payments.

Startups are the biggest driver of innovation in these areas, according to the leaders, followed by technology giants with ambitions to move into the sector, while just 2.5 per cent said banks were the biggest innovation driver.

"Evidence points to most recent payment innovations (like PayPal, Square, Stripe) all emerging from startups. There is no reason to think this would change," said one of the leaders surveyed. "Institutional players will always have problems being on the leading edge but will adopt innovations that scale," concluded another.