Issues and Opportunities
For over 30 years Edgar, Dunn & Company has been helping clients tackle important issues and seize opportunities in the payments industry, offering our unique blend of global perspective and local market expertise. As a trusted advisor to the payment industry, we offer proprietary research and our perspectives on emerging trends as well as unique insights on yet unexplored areas in the payments, banking, and financial services industries.
The mPOS (mobile POS) proposition has recently experienced a surge in popularity, with a host of new solutions looking to establish a presence. mPOS is definitely an interesting development and will cause disruption as companies continue to push the boundaries and develop innovative propositions. The point of interaction between the retailer and consumer in physical stores is undergoing the most significant change in many years. mPOS provides significant opportunities for existing companies and new ones, but due to the competition, it is important to have a clear strategy in the market.
This white paper is aimed at people in a variety of different roles. The goal is to provide the reader with an understanding of the bigger mPOS landscape, how the ecosystem within it operates today, and how it is likely to evolve in the future.
Click to Download PDF >> English.
Over the past five years, numerous changes have significantly impacted the global acquiring industry and consequently the merchant acquiring space is becoming increasingly competitive, complex and specialised.
Merchant and Consumer Needs - Consumer payment preferences are increasingly diverse and merchants are looking to accept all of the payment methods their customers prefer to use, and in the form factor they desire (e.g. mobile, contactless, e-wallet, etc.)
Specialisation - Merchant demand for specialised value added services (VAS) has increased. This demand has in turn supported the growing specialisation of providers who focus on selling a targeted suite of VAS to specific merchant segments
Margin Pressure - Merchant acquiring has increasingly become a commoditised business, and increased regulatory intervention has raised awareness of merchants' payment acceptance costs leading to down-market margin pressures
New Entrants - In addition to third-party providers for value-added services, companies such as Square or LevelUp are challenging the underlying business model of the entire industry
Download a recent presentation on Innovation in the Acquiring Industry that Edgar, Dunn & Company (EDC) gave at a WorldBank even in March 2013.
EDC has undertaken a large number of projects globally that facilitated the development and implementation of winning strategies for our clients that satisfy both their market-specific and global needs.
- EDC helps clients expand into new markets and channels, explore and implement new business models, assess acquisition targets and gain regulatory approvals and licenses
- EDC provides performance benchmarking and best practice studies/roundtables that enable clients to identify areas for performance improvement. EDC follows through on its advice by providing support to plan and implement the changes that deliver improvement
Product and Process Development
- EDC has developed a unique insight into merchant acquirer value added services based on work for a wide variety of bank, and non-bank, clients
- Alternative payments are driving major change in the industry and offer high levels of growth in otherwise mature markets. EDC supports clients in their assessment of these opportunities and the development of go-to-market strategies
Sales and Marketing
- EDC helps clients identify profitable merchant segments and niches and develop new ways of effectively reaching them
- EDC's work in risk management is extensive. Within merchant acquiring this work has focused on the reduction of CNP fraud and the systems and processes necessary to deliver reduction
Demand Side Credentials
- EDC is engaged with the demand-side of the market. EDC works with major merchants and merchant groups to develop and manage procurement processes and assess the cost and effectiveness of payment method acceptance with the aim of optimising their costs
In Europe, EDC is running the only reliable benchmarking program that is exclusively addressing the merchant acquiring industry. This Touchstone program has been operational since 2009.
If you want to know how your acquiring business is performing against others, or have general questions about acquiring please contact Volker Schloenvoigt.
English | Платежи в России и СНГ
The Russian payments industry is experiencing a wave of innovation and growth, as established and new industry players look for build upon ever growing rates of financial literacy and sophistication, and support the ongoing migration to electronic payment methods. However, the unique environment that makes up the Russian and CIS payments ecosystem is unlike any other market. It requires localized market knowledge and an in-depth understanding of the intricacies of the Russian consumer and retail environment..
Payments in Russia & The CIS| Платежи в России и СНГ
Российская индустрия платежных систем сейчас находится на пике инновационного роста и развития; и опытные, и только начинающие игроки постоянно ищут пути повышения уровня финансовой грамотности, стремятся обеспечить переход к электронным методам платежей. Однако рынок платежных систем в России и СНГ во многом отличается от других стран. Работа на этих рынках требует особых знаний местного бизнеса и глубокого понимания тонкостей российской сферы розничной торговли и самого покупателя..
EMV is finally coming to the US market. Liability shifts established by each of the major payment brands provide benchmarks for stakeholders’ roadmaps toward EMV implementation. As with any change to underlying infrastructure, there are many questions that arise as payment system stakeholders, including merchants, issuers, acquirers, and networks, begin to plan for the transition. Many companies need to make a business case in order to evaluate the investment required in light of the benefits that come from EMV. Stakeholders will also have to weigh various strategic decisions, including rollout strategies and technology choices, to understand how they will impact business operations down the road.
Being the last major market to convert to EMV enables the US to learn from other markets to offset some of the challenges associated with the scale of the US migration effort. Edgar, Dunn & Company (EDC) believes that this transition provides the foundation for the next generation of payments and that stakeholders will need to integrate EMV into their overall future state payments roadmap..
The WTTC (World Travel & Tourism Council) confirms that the Travel and Tourism sector is a large sector with healthy growth. The WTTC estimates that this sector accounted for USD 6.3 trillion (i.e. 9.1% of global GDP) that involves 255 million jobs globally, and predicts that it will grow 2.7% this year.
Travel encompasses a wide variety of players including large merchants such as as airlines, rail operators, hotels, travel agents, car rental companies - all with significant and often complicated payment infrastructures - as well as the payment providers serving this merchants, including specialized payment network, issuers and acquirers.
Why are “payments” important in the travel sector and to these players?
EDC's experience and studies indicate that "payments" is important for travel merchants because it can impact both sides of their P&L account:
- On the revenue side: optimizing payments can have a significant impact on core sales (e.g., increasing conversion rates of online direct sales) and on ancillary revenue (e.g., increasing revenue from co-brand credit cards). For instance, some large airlines generate hundreds of millions of dollars in ancillary revenue from their co-brand card programs
- On the cost side: optimizing payments can reduce distribution costs for large travel merchants. For instance, an EDC's survey among airlines globally indicates that the average total of accepting payments is equivalent to $12.50 per ticket. And recent surveys by Cybersource and Worldpay estimated a revenue loss due to card fraud in the range of 0.9%-1.5% of revenue
On the payment provider side, the travel sector is also an important topic:
- It generates a significant proportion of card spend globally
- As such, it provides growth opportunities for payment providers such as merchant acquirers, payment gateways, fraud prevention vendors, DCC vendors, etc.
Download our recent whitepaper on Payment Trends & Opportunities in the Hotel Sector (March 2012).
The world’s population is bursting at the seams and is estimated to be nearing 7 billion. Nothing in the history of consumer products has ever come close to the penetration reached by mobile devices which are estimated to be around 5.5 billion – equally popular in all parts of the globe – irrespective of economic conditions or geographic location. In many developed markets the number of mobile devices has overtaken the size of the population. Smart phones and mobile tablet devices are making the mobile experience a lot richer and more useful than ever before. More and more, we see the migration of communication on a mobile device from the ear to the eye.
Edgar, Dunn & Company (EDC), in partnership with Payment Cards and Mobile (PCM) have published the latest edition of the Advanced Payments Report.
The Advanced Payments Report 2012, sponsored by MasterCard Worldwide, is based on a review of the global payments landscape, surveys of payments industry stakeholder opinion, and discussions with more than 500 industry executives and thought leaders..
For the fourth year running, Edgar, Dunn & Company has conducted a survey of payments professionals globally on key industry dynamics in their markets. The response to this year’s survey involved 685 professionals representing 50 countries.
The survey questions were focused on five main topics:
- Current and future importance of individual payment products
- Expected future importance of payment technologies
- Most influential market participants
- Key industry events that will shape payments markets
The findings illustrate where common themes are developing globally in relation to future trends and, perhaps more interestingly, highlight the key differences in expectations between regions and countries..
Internet, mobile and contactless payments are expected to soar according to a new Advanced Payments Report from Edgar, Dunn & Company (EDC) in partnership with Payments Card & Mobile magazine (PCM).
The Advanced Payments Report 2011, sponsored by MasterCard Worldwide, is based on a review of the global payments landscape, surveys of payment industry stakeholder opinion, and discussions with more than 650 industry executives and thought leaders..
For the third year running, Edgar, Dunn & Company has conducted a survey of payments professionals globally on key industry dynamics in their markets. The response to this year’s survey involved 548 professionals representing 48 countries.
The survey questions were focussed on five main topics:
Current and future importance of individual payment products
Expected future importance of payment technologies
Most influential market participants
Key industry events that will shape payments markets
The findings illustrate where common themes are developing globally in relation to future trends and, perhaps more interestingly, highlight the key differences in expectations between regions and countries.