Payments Opportunities: Finding the White Space

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17 August 2009


Electronic payments remain an area of high growth, with a 10% to 20% CAGR around the world. There is huge untapped potential in markets such as Indonesia, Russia, China, India, and Saudi Arabia. Yet market entry can be difficult, with economies of scale and network effects creating huge barriers to entry. By establishing a clear target based on geography, customer and payment flow, new entrants can create viable niches.

In this report, Payment Opportunities: Finding the White Space, Oliver Wyman examines various opportunites for new payment plays across the globe.

  • Prepaid cards used for business to individual payments, such as payroll cards for U-Haul and employee inscentive programs for Coca-Cola.
  • Airline ticket payments in China with China PnR.
  • Alternative electronic payment systems (AEPS) in Russia such as OSMP and Cyberplat. These providers accept cash for payments such as mobile top-ups and charging a convenience fee to the payer.

In each case, the payments concentrated on a specific type of customer, with a specific payment need and created a value proposition that resonated across the payment value chain.

"The payments sector is turning heads," says Paul Mee, coauthor of the report. "It is growing dramatically and undergoing radical change across multiple markets and dimensions. Payments represent a relatively low capital intensity, lower risk annuity business—accessible to anyone with customer insight, confidence, and the right capabilities."

"To focus on a winning solution, the best way forward now is to spot frictions in a particular payment flow, geography, or customer group and to develop tailored payment propositions to remove those frictions," adds Zilvinas Bareisis, coauthor of the report.