Incumbent payment firms are more likely to engage with fintech upstarts than other companies in the financial sector, according to the 2016 PwC Global FinTech Survey, “Payments in the Wild Tech World“.

The payments industry is running scared and the vast majority are taking action. The report states, “84% of payments executives believe that FinTech lies at the heart of their overall strategies versus just 60% of executives in all financial sectors.” Only 4% of payment execs say they haven’t done anything to engage fintech upstarts, versus 25% of executives in the financial industry at large.

Here’s why: The report reveals 87% of payment companies believe fintechs could snatch business from them. 28% believe that they could lose one-quarter of their business to these upstarts by 2020 — less than 3 -1/2 years away. 9% believe they could lose 60% of their business to fintechs within five years. Only 5% of banks in the survey say they are that vulnerable; 2% of asset managers and 0% of insurance companies.

Payment companies are also worried about margins, with 74% citing that as a threat, more than any other sector in finance.

The payments battleground is huge and growing; the PwC Market Research Centre predicts non-cash transactions will expand by 69% between 2013 and 2020, “which would represent over one million transactions happening every minute.” Payments startups are growing aggressively. CB Insights reports:

In Q2’16, payments startups raised more than $560M across 75 deals, representing a 59% increase in funding over the previous quarter.

Funding is trending upward. The last two quarters have seen growth in dollars deployed after funding plummeted in Q4’15. Q2’16 included some large notable deals including a $100M Series C to Affirm and $50M Series C to MobiKwik.

The motto for payment companies could well be: If you can’t beat ’em, join ’em. 35% of payment firms in the PwC survey say they are partnering with fintechs and 35% also say they have created fintech subsidiaries.

Also top of mind for payment companies: cybersecurity. “Virtual commerce is expected to double from 2015 to 2018 to $3 trillion in volume, with half the users coming from China,” the PwC report says. That means they need to step up their fraud defenses.

The 2016 survey includes the views of 544 respondents in 46 countries in the survey, mostly chief executive officers, heads of innovation, chief information officers, and other senior managers. The payments section is based on answers from 24 respondents from payments companies around the world.