Payments are critical to a well-functioning economy and are very important to the providers: products where payments are a key feature (DDA and credit card) account for 30-50% of banks’ revenues. At the same time, payments is a broad, diverse, and complex topic with significant differences in underlying trends for different payment instruments and geographies.

In a two-part report, Taxonomy of Payments, Part I: Everything You Wanted to Know About Payments But Were Afraid to Ask, Celent introduces an organising framework for how to think about payments and reviews the key developments in the industry.

Part I of the report starts with an introduction to the basics of payments, such as key terminology and the overall value chain, and proceeds to discuss the major payment instruments: cash, cheque, electronic bank transfers, both domestic and international, and cards. Each section introduces an instrument, further details the value chain, explains the transaction economics, examines key players, describes major trends, and points the reader to other relevant Celent reports.

“Many of us take payments for granted, yet it is a diverse and complex topic,” says Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group and author of the report. “While transaction-related revenues remained relatively robust during the financial crisis, the margins are coming under significant pressure. Understanding key trends in payments and making informed decisions on where to invest is more important than ever before to executives in the payments industry.”