a.t. kearney payment strategy report
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A.T. Kearney Studie: Elektronischer Zahlungsverkehr wächst schneller Erträge verdoppeln sich, und neue Anbieter sind im Kommen Düsseldorf, 24. Juni 2013 - Die Menschen in Europa werden in den kommenden Jahren laut einer aktuellen Studie der Managementberater von A.T. Kearney immer weniger mit Bargeld zahlen. Stattdessen wird der Anteil bargeldloser Zahlvorgänge drastisch zunehmen und die Anbieter der verschiedenen Zahlungsmethoden vor große Herausforderungen stellen Der Untersuchung zufolge wird die Anzahl bargeldloser Zahlungsvorgänge in den 27 Staaten der Europäischen Union von derzeit über 90 Milliarden bis zum Jahr 2020 auf mehr als 175 Milliarden steigen, was einem Wachstum von 8 Prozent pro Jahr entspricht. Zum Vergleich: In den vergangenen Jahren war der Markt mit nur 5 Prozent jährlich gewachsen. „Die dürren Jahre sind vorbei“, sagt Studienautor Andreas Pratz, Partner bei A.T. Kearney. „Der Haupttreiber des Wachstums kommt aus dem E-Commerce: Immer mehr Menschen kaufen im Internet ein, und das geht natürlich nur selten mit Bargeld. Außerdem rechnen wir mit großem Wachstum alternativer Bezahlmodelle. Dabei können in der Regel höhere Margen durchgesetzt werden als es im klassischen Zahlungsverkehr auch angesichts der regulatorischen Rahmenbedingungen zuletzt üblich war“. Bekannte alternative Bezahlmethoden sind PayPal, Giropay oder Sofortüberweisung. Weltweit betrachtet wird derzeit rund ein Drittel aller 280 Milliarden bargeldlosen Zahlungen in Europa getätigt. Für den einzelnen Bürger heißt das: Von den im Durchschnitt jährlich etwa 800 Bezahlvorgängen pro Kopf, werden derzeit noch 600 bar bezahlt. Der Anteil von Barzahlungen wird der Studie zufolge bis 2020 auf 60 Prozent sinken und der Anteil der bargeldlosen Zahlungen steigen. Davon profitieren werden Banken, Telekommunikationsanbieter, Händler sowie neue Anbieter, die im bargeldlosen Zahlungsverkehr in Europa aktiv sind. Ihre Erträge in diesem Segment werden sich A.T. Kearney zufolge von etwa 37 Mrd. Euro im Jahr 2010 auf bis zu 65 Mrd. Euro im Jahr 2020 fast verdoppeln. Zwar bleibt der Preisdruck auch angesichts der regulatorischen Rahmenbedingungen hoch. Innovative Bezahlmethoden im Internet oder via Smartphone („E- und M-Commerce“) bieten aber zugleich neue Ertragschancen. So erwarten die Autoren der Studie, dass bis 2020 bis zu ein Drittel der Erlöse auf Anbieter alternativer Methoden entfällt, obwohl sie zu diesem Zeitpunkt voraussichtlich nur ein Fünftel aller Zahlungen ausmachen werden. Beispiele sind elektronische Geldbörsen (Wallets) oder mobile Lösungen für Smartphones. An der Vielzahl neuer Anbieter und Bezahllösungen im Markt wird deutlich: Im Wachstumsmarkt bargeldloser Zahlungsverkehr wird auch künftig mit harten Bandagen um Wachstum, Marktanteile und Kundenbeziehungen gekämpft.TRANSCRIPT
Andreas Pratz, Justin Krampe, Paul Laechelin
Frankfurt, June 2013 Financial Institutions Circle
Winning the growth challenge in payments European Payment Strategy Report
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 2
• Payment industry sentiment
• Payment market outlook
• Strategic challenges and choices
Agenda
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 3
European Payment Strategy Report 2013: multiple sources of insight Sources of insight
Source: A.T. Kearney
>50 expert interviews • Banks, schemes, processors,
MNOs, online challengers
• Coverage of major European markets
Payment market model • As-is based on ECB, various
industry sources
• Volume and revenue forecasts until 2020
Cards & payments benchmarking • Cost of domestic/cross-border
payments and card issuing
• Extensive European benchmarking database
>100 payments projects across EMEA over last years • Cards, ACH, e-/m-commerce
• Schemes, banks, processors, alternative providers, regulators
• Strategy, market entry, innovation, cash displacement, risk, profitability, regulatory impact, …
Payment industry sentiment
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 4
Note: Transactional growth for electronic transactions Source: Interviews, A.T. Kearney analysis
Accelerated growth not expected to translate into larger revenue pool Expert view on transactional and revenue growth in Europe until 2020
Key observations • Growth through innovation,
especially e-/m-commerce and cash displacement
• On average stable revenue pool anticipated due to price pressure from regulators and increased competition
How does a growth scenario look like? Is the revenue pool really stagnating?
Transactions expected to grow…
Revenue pool expected to…
Slower
33%
Faster 63%
4%
Similar
Decline 33%
Remain stable 40%
Return to grow 27%
Payment industry sentiment
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Note: Alternative payment methods include payments not initiated through a bank current account and conducted for instance between mobile phones, through m- or e-wallets or via remittance providers; CEE: Central and Eastern Europe; LVP: Low-value payments Source: Interviews, A.T. Kearney analysis
Stable growth expected in “incumbent” areas – accelerating in alternative payments Question: What is your expected annual growth rate for transactions in Europe 2010-2015 and 2015-2020? (Ø response for growth rate)
2020f 2015f 2010
4%
8%
8%
16%
19%
4%
Alternative methods
Cards
ACH
Payment industry sentiment
What dynamics for alternative methods can be expected?
Key observations • Classical ACH set to continue
moderate growth path, higher dynamics from ACH underlying alternative methods
• Cards transactional growth fuelled by CEE and LVP
• Alternatives expected to grow strongly, from small base
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 6
Source: Interviews, A.T. Kearney analysis
Convenience across the board seen as most important “battleground”
Operational excellence (13%), scale (8%), security (8%), other (10%)
Use in many places/channels (8%), other (17%)
Payment industry sentiment
What battleground do you see most relevant going forward?
Which aspect of payment convenience will be most relevant?
15% Big data
E-/m-com. solutions 21%
Conven- ience 26% 48%
Quick to use (e.g. 1/2/3 clicks)
Easy to join (registration) 10%
Easy to use (intuitive checkout)
17%
Which battles to pick? What is needed on top of convenience to win in payments?
Key observations • Convenience and e-/m-com. solution
interrelated
• Operational excellence also mentioned by alternative providers
• Reach and scale important but not seen as the top priority
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 7
The mobile opportunity: Belief in NFC and in cooperation
Payment industry sentiment
Source: Interviews, A.T. Kearney analysis
Why is NFC not taking off in most countries yet? Key barriers to overcome? Alternatives?
Key observations • Dominance of NFC due to variety of
pilots and trials
• Some interviewees see benefits of pure internet solutions
• Cooperation will be crucial to seize the opportunity
Over internet (4%), One-time passcode via SMS (2%), Other/no opinion (19%)
Alternative providers (8%), Merchants (8%), MNOs (4%)
Which solution will be the most successful in mobile F2F environment?
By whom will it predomi-nantly be provided?
QR code scanning
(on mobile)
8%
6%
WiFi/ Bluetooth
NFC/ RFID 60%
21% Other cooperation
25%
33% Joint bank- MNO offering
Banks
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 8
E-Commerce: Wallet perceived as most convincing solution
Question: Which solution will stand best chances to win in e-commerce?
Debit card (6%), Invoice (6%), Other (13%)
Payment industry sentiment
Source: Interviews, A.T. Kearney analysis
How should e-com. be prioritized vs. m-com.? How to realize the full potential of wallets?
Key observations • Wallet seen as most powerful
solution in e-com. before OBeP/bank buttons
• Credit cards seen as superior mainly in typical credit card countries
• Less potential seen for traditional methods incl. invoice
OBeP 13%
Credit card 13%
Wallet 50%
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 9
15%
Reach 13%
Essentials
Cost 48%
Note: Large billers include telcos, utilities, insurers, government institutions etc. who initiate the majority of electronic transactions Source: Interviews, A.T. Kearney analysis
Large billers: Sentiment that cost still rules decision on payments Question: What factor matters most when billers choose a payment method?
Payment industry sentiment
Checkout convenience (6%), Value-added services (4%), Other (15%)
What can be done to grow the cake beyond payments? Why should we care about merchants?
Key observations • Biller criteria: Focus is on the
mechanics, not (yet) on consumer needs
• Online merchants seek for minimal drop-out rates and seamless consumer journey
• Only few interviewees see importance of merchants
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 10
The hopeful and the concerned
Note: Question: Who is best prepared to win in payments over the coming years? Ranking according to answers Source: Interviews, soundbites selected by A.T. Kearney
Expert view on who is best prepared to win in payments
E-commerce specialists/wallets
New bank solutions
Incumbent bank solutions
MNO solutions
Remittance providers
• “Shorter product development cycles, no regional constraints and less regulation”
• “Scale, also in F2F, key to stay competitive”
• “Enjoy trust in highly profitable niche segment” • “They will learn to innovate”
• “Incumbents can play the reach card” • “Can leverage broad customer base”
• “Cooperation essential in mobile payments” • “Different business model, many important
topics other than payments”
• “Potential for wallet or OBeP solutions” • “Banks can build on consumer trust when it
comes to payments”
1
2
3
4
5
Payment industry sentiment
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 11
• Payment industry sentiment
• Payment market outlook
• Strategic challenges and choices
Agenda
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 12
1.60 1.20 1.00 0.80 0.60 0.40 0.20 0.00 1.40 2.20
50
2.00 1.80
250
150
200
100
1,800
400
350
0 2.40 2.60
300
Lithuania Latvia
Italy
Ireland
Hungary
Greece
UK
Slovakia
Slovenia Spain
Sweden
Non-cash payments per capita
Romania
Card/ACH transactions
Portugal
Poland
Netherlands
Malta
Luxembourg
Germany
France
Finland
Estonia
Denmark
Czech Republic
Cyprus
Bulgaria
Belgium
Austria
Status Europe: Huge room to evolve payment system
Note: Bubble size refers to number of non-cash transactions; ACH transactions used as a synonym for credit transfer, direct debit and cheque transactions Source: European Central Bank, A.T. Kearney
ACH vs. card markets (2011)
Card markets ACH markets
Payment market outlook
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Payments a growth spot in a slow environment
Note: Telecommunication CAGR refers to Western Europe Source: A.T. Kearney European Payment Market Model, building on actuals from ECB, RBR and other sources; IDC
Non-cash payments in Europe (bn transactions, CAGR in %, EU-27 2005 – 2020f)
Cash share in retail sector 82% 78% 71%
177
121
8770
2005
8%
7%
5%
2020f 2015f 2010
60%
Payment market outlook
eCommerce (2010-2015)
10%
Retail 3% Telecommunication -1%
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 14
Change of instruments – change of providers?
Electronic payments evolution (EU-27, share of transactions)
Credit transfers/ direct debits
Debit/credit cards
Cheques
Alternative payment methods
2020f
38-42%
<2% 12-20%
2015f
45-50%
43-47%
<3% 4-6%
2010
53%
40%
6% 1%
2005
55%
34%
10% 1%
40-44%
Notes: Without ATM transactions; Alternative payment methods include payments not initiated through a bank current account and conducted for instance between mobile phones, through m- or e-wallets or via remittance providers Source: A.T. Kearney European Payment Market Model, building on actuals from ECB, RBR and other sources
Payment market outlook
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 15
Landslide shift in revenue pool
6%
7%
2%
Credit transfers/ direct debits
Debit/credit cards
Alternative payment methods
2020f
~65
20-24
18-26
18-26
2015f
~50
18-22
16-22
10-16
2010
~37
16
15
6
2005
~33
14
13
6
Notes: Alternative payment methods include payments not initiated through a bank current account and conducted for instance between mobile phones, through m- or e-wallets or via remittance providers; debit/credit cards includes transactional issuing and acquiring revenues; credit transfers/direct debits include paper and electronic transactions, high-value and international transactions, and exception handling Source: A.T. Kearney European Payment Market Model, building on actuals from ECB, RBR and other sources
European payment revenue pools (€ bn, CAGR in %, EU-27 2005 – 2020f)
Payment market outlook
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 16
• Payment industry sentiment
• Payment market outlook
• Strategic challenges and choices
Agenda
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 17
Pick your battles
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Payment battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 18
90% current accounts/debit cards
Example Germany
~40% credit cards
~45% onl. banking
~100% mobile phones
Pick your battles
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Payment battlegrounds
Reaching many, quickly
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 19
Pick your battles
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Network before plain scale
Payment battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 20
Cashdisplace-
mentATM
POSUse
Pay-ment
De-posit
TrustPolicy
Pick your battles
Note: Wheel of cash starts at ATM use and includes measures to discourage cash circulation, broaden card acceptance, encourage POS use, increase electronic payments, and encourage cash deposits. This is supplemented by measures fostering (perceived) security and convenience, and general policy measures (e.g. reduce red tape, foster financial inclusion, promote e-invoices) Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Motivate and engage – market level
Payment battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 21
Pick your battles
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Position for “e” to win in “m”
Payment battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 22
Pick your battles
Source: A.T. Kearney analysis
Expected value of loss
Base level
Simplified
Enhanced
-
+
Low
High
High
Low
Convenience
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Security: Differentiated and convenient Payment
battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 23
Pick your battles
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Convenience
Use cases Convenience: Easy to join, use everywhere
Payment battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 24
Pick your battles
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Rich data before big data
Payment battlegrounds
€ $ £
ABCD
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 25
Pick your battles
Source: A.T. Kearney analysis
TransitFoodApparelCultureWhiteBrownCarDigital… … ….
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Key to address sub-segments and capture on-top revenues
Payment battlegrounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 26
Select the winning grounds!
Source: A.T. Kearney analysis
Reach/ acceptance
Data
Security
Cash dis- placement
Scale
E-/m- commerce
Con- venience
Use cases
Winning grounds
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 27
Seize the opportunity!
Source: A.T. Kearney
The burning platform
Processors • Make the most out of
SEPA migration: replatforming, routing optimization
• Transaction processing beyond payments
• From thin to rich data
Banks • Decide necessary
range of solutions (F2F/e/m)
• Define partnering to gain uptake
• Leverage core assets
Online challengers • Strive for convenience
• Address multi-channel needs/transition
• Define partnering for scale/relevance
MNOs • Embed with m-
commerce
• Get aligned with banks
• Define partnering in NFC/F2F to solve infrastructure
All
• Focus market positioning
• Pick verticals (use cases)
• Put upgraded authentication/risk management approach in place
• Put yourself in user shoes (merchants/billers, consumers, corporates)
Strategic challenges and choices
A.T. Kearney 10/05.2013/44887d/5aY4trQkkR00nknHnx 28
Americas Atlanta Calgary
Chicago Dallas
Detroit Houston
Mexico City New York
San Francisco São Paulo
Toronto Washington, D.C.
Asia Pacific Bangkok Beijing
Hong Kong Jakarta
Kuala Lumpur Melbourne
Mumbai New Delhi
Seoul Shanghai
Singapore Sydney
Tokyo
Europe Amsterdam Berlin Brussels Bucharest
Budapest Copenhagen Düsseldorf Frankfurt
Helsinki Istanbul Kiev Lisbon
Ljubljana London Madrid Milan
Moscow Munich Oslo Paris
Prague Rome Stockholm Stuttgart
Vienna Warsaw Zurich
Middle East and Africa
Abu Dhabi Dubai
Johannesburg Manama
Riyadh
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