Payment Market Research Articles

The Cardless and Cashless Future: The Rise of Mobile Payment

Mobile Payment, fast becoming a competitive alternative to existing payment channels, raises opportunities and challenges for public policies and corporate strategies. Our research aims to identify the distinct impact of Mobile Payment on the payment market by studying consumers' adoption decisions and migration from incumbent channels. The core of our research is 2.6 billion records of an entire city's five-year transactions in public transportation across five different payment channels. With this multi-channel setting, we can distinguish the impact of Mobile Payment from an arbitrary new channel's distortion in the payment market. Starting with a causal inference design -- DID, we confirm that the introduction of Mobile Payment draws consumers away from incumbent channels and that promotion magnifies this migration flow. To estimate the unique impact of Mobile Payment, we turn to aggregate demand estimation models that estimate within-channel and cross-channel price elasticity. Compared to a regular card-based channel, we find that consumers are more responsive to Mobile Payment promotion and are less likely to leave after the promotion ends. Hence with each round of promotion, Mobile Payment can steadily increase its market share by attracting customers from incumbent channels. Tracing the transactions with unique consumer IDs, we further explore how the distinct impacts of Mobile Payment vary with consumption purposes and consumer characteristics. To apply our findings practically, we use counterfactual analysis to explore regulators' and merchants' channel portfolio management and optimal promotion strategies for the Mobile Payment channel.

How payments drive digital transformation

This paper discusses the main issues relating to the digital transformation of the payments market. It describes how, in the context of globalised financial services, digital transformation has been a key driver in the evolution of payments. Indeed, technological, sociological and geopolitical issues have all contributed to the payments market adopting a modern, prospective and international approach. In this context, the payment ecosystem is confronted with many issues linked with innovation, new use cases and social debate, as well as the question of sovereignty. While questions continue to arise, one thing is clear: the field of payments has grown beyond its technological origins to become a real asset in the global economy.

The payments landscape in Portugal: An interview with Pedro Coelho

Strategically positioned between Europe, Africa and America, Portugal has an attractive and modern financial system. The Portuguese carry the least cash of all European citizens and use debit cards frequently. The Portuguese retail payments market is still dominated by the local payment system, Multibanco. Multibanco is a payment brand that belongs to SIBS, a large-scale payments specialist operating a payment infrastructure shared by all Portuguese banks. BNI Europa is a challenger bank providing niche products in several segments. In this interview, Pedro Coelho talks about the specifics of the Portuguese retail payments industry, the way BNI Europa entered the market as a branchless bank, and his expectations regarding further developments in the retail payments market.

Digital Payments Diffusion in Emerging and Developed Economies

Digital India initiative aimed at improving the lives of the common men in India through technology. Efforts have been made to make technology in India as accessible, affordable and value addition. Digital initiatives have been undertaken in India in almost all sectors. Payments and settlements are not exceptions to the digital push of India. Indian Digital Payments have registered unprecedented growth in terms of volume of transactions (CAGR of 58.9%) and also in terms of value (CAGR of 28.4%). But, in the global payments market, the Indian digital payments market didn’t perform well in many measures of digital payments growth including a number of digital transactions per capita per year and India has not featured in any top ten places. So, this research work focuses on identifying and analyzing the growth of the Indian digital payments market and its state in the global digital payments market. The research work is based on secondary data and the secondary data have been collected from central banks, reports, and Bank for International Settlement. The purpose of this research work is descriptive in nature and it has employed analytical research type. The study found through its scientific research approach that Digital payments market in India has grown steadily since 2014 and it still lacks behind many countries of the world in terms of measures of digital payments growth which are Cash in Circulation to Gross Domestic Product ratio, Number of transactions per inhabitant and so on.

Determinants of Benefits in the Retail Payments Market: Evidence from Russian Consumers

This study identifies the determinants of consumer benefits values in the retail payments market. Using a mix of quantitative (nation-wide representative survey of 1500 individuals) and qualitative inputs (8 focus groups and 32 in-depth interviews), this study finds robust evidence which supports the importance of internal and external user characteristics for the benefits value explanation. Other factors exhibit partial or no correlation with benefits values. Total welfare is efficiently distributed across the market. Findings imply new factors affecting consumer behavior in the retail payments market and suggest a basis for the reassessment of marketing and regulatory strategies.

Impactos do Processo de Aquisição na Estrutura, Estratégia e Cultura Organizacional: Estudo de Caso em uma Empresa do Mercado de Meios de Pagamento

Concebidas como operações para expandir e diversificar mercados, buscando aproveitar oportunidades de negócios, as Fusões e Aquisições (F&A) são consideradas uma das mais recorrentes formas de reestruturação organizacional, cujos impactos atingem os mais variados aspectos, incluindo as decisões estratégicas, a estrutura organizacional e a cultura corporativa. Todos esses aspectos são essenciais para determinar o sucesso ou o fraco de um processo de F&A e não podem ser negligenciados. Sob essa perspectiva, o presente artigo tem como objetivo explorar o processo de aquisição de uma empresa do mercado de pagamentos brasileiro, investigando as principais mudanças e impactos na estratégia e na estrutura organizacional e a percepção e adaptação dos funcionários aos novos elementos culturais desta empresa decorrentes de tal processo. A pesquisa foi conduzida tendo como base, fontes documentais tais quais relatórios e apresentações internas da empresa e; entrevistas com executivos dos níveis operacional, tático e estratégico, que vivenciaram o processo de aquisição tanto na empresa adquirida quanto na adquirente. Os resultados evidenciaram que elementos culturais da instituição financeira adquirente foram rapidamente incorporados à empresa estudada. A estratégia e a estrutura organizacional da empresa sofreram alterações em sua forma de solucionar problemas gerenciais, melhorar indicadores estratégicos de desempenho e aumentar a sinergia entre as duas empresas. Palavras-chave: Estratégia. Estrutura Organizacional. Mercado de Pagamentos. Fusões e Aquisições. AbstractPlanned as operations to expand and diversify markets, in order to take advantage of business opportunities, mergers and acquisitions (M&A) are considered one of the most recurrent forms of organizational changes, whose impacts affect the most varied aspects, including strategic decisions, organizational structure and corporate culture. All these aspects are essential to determine the success or weakness of a M&A process and can not be neglected. In this perspective, this article aims to explore the process of acquiring in a company from the Brazilian payments market, investigating the main changes and impacts in the strategy and organizational structure and the perception and adaptation of the employees to the new cultural elements resulting from such process. The research was carriet out through documentary sources, such as internal reports and presentations, and interviews with executives at the operational, tactical and strategic levels who experienced the acquisition process both in the acquired company and in the acquirer. The results showed that acquirer’s cultural elements were quickly incorporated into the acquired company. The strategy and organizational structure of the acquired company undergone changes as a way to solve managerial problems, improve strategic performance indicators and increase the synergy between the two firms. Keywords: Strategy. Organizational Structure. Payment Market. Mergers and Acquisitions.

The statistical analysis of „Safety” feature for payment cards with contactless payment function, cash and mobile payments in Poland. Results of own research

During the last two decades, numerous innovative mobile payment services have been introduced to both developing and developed economies. Many mobile payment applications have been launched by mobile network operators. Although the Polish market of mobile payments is in the initial phase of development, it is one of the pioneering and leading in Europe and globally. The mobile payment industry in Poland is expected to reach US$ 26,893.9 million by 2025 (Poland Mobile Wallet 2019). The main purpose of this article is an attempt to answer the following question: how does “safety” feature influence consumer attention to use: payment cards without contactless payment function, cash and mobile payments?

The statistical analysis of availability feature for payment cards with contactless payment function, cash and mobile payments in Poland. Results of own research

Presently money is shifting from its analogue past to its digital future. The digitization of payments is transforming what both consumers and businesses expect from financial services. Although the Polish market of mobile payments is in the initial phase of development, it is one of the pioneering and leading in Europe and globally. The mobile payment industry in Poland is expected to reach US$ 26,893.9 million by 2025 (Poland Mobile Wallet 2019). The main purpose of this article is an attempt to answer the following question: how does “availability” feature influence consumer attention to use: payment cards without contactless payment function, cash and mobile payments?

The use of statistical methods in the analysis of mobile payment market in Poland

Payments are an inherent element of economic activity (León and Ortega 2018). However, the evolution of payment instruments and the way individuals and businesses make daily payments has undergone enormous change in human history, particularly due to main innovations in payment systems in last decades (Gandhi 2016). The last innovation in payment system concerns mobile payment. The development of mobile payments market can have a positive impact on economic growth (Leon and Rodriguez 2012). Although the Polish market of mobile payments is in the initial phase of development, it is one of the pioneering and leading in Europe and globally. The main purpose of this article is to analyze, which feature (convenience, speed, availability, ease of use, safety) of mobile payments could be the most important for users from Poland.

Supranational transfer of digital innovation in agribusiness through payment market mechanisms

The task of creating a single supranational payment market is to ensure its maximum independence, which correlates with the tasks of the competitive leading economic development of countries - the transition to a digital technological structure. To increase the efficiency of the generation of payment innovations with their subsequent diffusion into the agricultural sector, to strengthen the economy’s resistance to risks, a transfer of innovative institutional, organizational and informational forms of activity is necessary. The strategy of integration of payment markets of interstate economic associations in time and space should be based on the consolidation and symbiosis of innovative technology platforms of sovereign payment systems of the participating countries. For this, a conceptual model of a supranational transfer of digital innovations to the agricultural sector through the transmission mechanisms of payment systems is proposed. The model characterizes the mega-economic system, which provides for the heterarchical and hierarchical interaction of payment systems of donor countries and recipient countries in the framework of economic associations, in which the transfer of forms of innovative development to the agricultural sector is carried out. Digital innovations are transferred to the subjects of the agricultural market horizontally and vertically. The transfer of digital innovation occurs through institutional, organizational and informational communications with the parallel creation of structures for the subsequent evolution of the model.

The state of the Russian payment market: digitalization and the impact of COVID-19

The purpose of the article is to assess the state of the Russian payment market and the impact on it of two main factors - the COVID-19 pandemic and the development of the digital economy. Objectives of the article: 1) highlight the stages of development of the modern payment market in Russia; 2) identify the dynamics of the payment market of the Russian Federation (infrastructure for the provision of payment and other financial services, the number of non-cash payments, the use of cash); 3) to establish the impact of the COVID-19 pandemic and the development of the digital economy on the state of the Russian payment market. As a result of solving the tasks, the following was established. There are three stages to assess the Russian payment market. Analysis of data on the infrastructure for the provision of payment and other financial services showed that since 2010 there has been an annual decrease in the number of banks. The structure of non-cash payments is changing: the number and amount of transactions using payment cards are growing, the number and volume of money transfers are decreasing, and cash is being phased out. The impact of the COVID-19 pandemic and digitalization on the state of the Russian payment market reflects trends that are being strengthened by the pandemic and are shaping a sustainable trend.

Трансформация роли регуляторов финансового рынка: постановка исследовательской задачи

Rapid socioeconomic development has produced a widening gap between economic theory and reality. As a result, it has become increasingly difficult to objectively assess whether financial regulatory policies adopted by nations worldwide are aligned with the fundamental objectives of stimulating financial market growth and promoting competition, and whether these policies are based on a realistic marketpicture. Such policy assessments have become particularly challenging for the payments industry and in regards to the regulation governing emergent financial market players from other industries (e.g. Big Tech). Coupled with the radical shift in the role of regulators themselves, this phenomenon raises a variety of scientific questions. Over the past few years, participants in the financial industry, primarily in the payment segment around the world, have, in practice, faced changes in the approaches of central (national) banks to market regulation. In our opinion, the key change lies in the new role that regulation is acquiring: now it not only reacts to market changes by setting a regulatory framework for them, but also becomes the central source and determining instrument of market changes. In this article, we substantiate an approach to the study of the directions of changes in the functions of macroregulation as a single mechanism in relation to a single object, in contrast to the studies available in the scientific literature within the framework of individual segments or infrastructures as well as the practice of regulation. The payment market used as an example is due to the fact that, by now, it is on this market that the changes studied manifest themselves to the greatest extent.

PSD2 influence on digital banking transformation: Banks' perspective

The European Union government has forced banks to open and make their customer information accessible with their permission, for other players in the financial market to use and take part of that business, in order to make the banking industry more innovative, stimulate new ideas in the payments market and better regulate existing legal frameworks for payment and banking services across the EU. This paper analyzes the impact that the revised PSD2 Directive has on the digital transformation of banking across the European Union.

Consumer Propensity to Adopt PSD2 Services: Trust for Sale?

We study consumers’ attitudes towards sharing payments data with incumbent and new providers of payment and account information services, and using their services. This is important, in order to understand the possible impact of the revised Payment Services Directive (PSD2) on the functioning of the retail payments market. We do so using a representative panel of Dutch consumers. We obtain a number of results. First, consumers’ propensity to give consent for payments data usage is highest if the data user is their own bank. Only a minority would give consent to the usage of payments data to make a financial overview with personalised offers. Second, an explicit financial reward can tempt more people to use this service and to demand the service from a BigTech instead of one’s own bank.

The Economics of Cryptocurrencies - Why Does It Work?

The impact of the introduction of cryptocurrencies in all economies are discussed here. The advantages of using cryptocurrencies as well as the drawbacks of traditional digital payments are covered. Cryptocurrency aimed to revolutionize the digital payments market; however, it does give rise to many questions as to its cost, reliability, and the future competition amongst the cryptocurrencies as well. In this paper, I try to answer the basic questions arising due to the introduction of cryptocurrencies, as well as the economic problems it presents.

IMPACT OF INNOVATIVE TECHNOLOGIES ON THE DEVELOPMENT OF CASHLESS PAYMENTS IN UKRAINE

The article summarizes the role of innovations in cashless payment market of Ukraine. According to the analysis of recent research and publications the main trends that are characteristic for the development of the world cashless payments market are highlighted. The basic generations of development of cashless payments have been displayed and the key characteristics corresponding to them have been defined. The main trends in the development of payment instruments and payment infrastructure in the domestic market during recent years are identified on the basis of statistics. Attention is paid to the number of payment terminals, active payment cards and contactless payment cards. The total share of cashless payments in the sphere of settlements is presented as well as the forecasts for the development of the Ukrainian market of electronic payments for the coming years based on the data of international statistical platform. The article provides the general overview of e-commerce sphere and payments through mobile POS-terminals. The key players of the domestic FinTech ecosystem have been identified and the introduction of innovative payment products that are developed by these players and international FinTech corporations has been analyzed. This products include such ones as: mWallet, mReward, eWallet, mGift, mRetail that are provided by Wallet Factory and MOSST Cash, MOSST Reader that are developed by MOSST company. The results of introduction of innovative product – NFC Donation Box by FinTech company Agency 21 were given as confirmation of the effectiveness of innovative technologies in cashless payments. The research describes the peculiarities of introduction of Google Pay and Apple Pay on the financial market of Ukraine. The basic problems that are inherent in the domestic sphere of cashless payments are investigated and the possible ways of their solution are suggested. During investigation amid of all problems, the attention was focused on the three major: security of payments, level of development of payment infrastructure and government support of innovative product developers. Moreover, the investigation of Visa company that describes the world problems of implementation of cashless payments in national economies are analyzed with appropriate ways of resolving these obstacles. The role of the three major economic entities such as national governments, local governments and innovative product developers in resolving problems has been carefully described and active steps that can reduce the impact of these problems in the process of building of cashless economies were highlighted. Keywords : cashless payments, payment infrastructure, innovative payment technologies, payment instruments, e-commerce, payment cards.

Assessing the development of the European retail payments market from a historical perspective

Changing consumer expectations are shaping the retail payments market at the global level. Within the European Union, the renewed regulatory framework, the revised Payment Services Directive, gives a further boost by fostering innovation and competition in the European retail payments market. In this evolving payment landscape, assessing the current state and forecasting potential development paths may benefit from a look at the past. This paper reviews past developments, discusses potential regulatory implications, and outlines a vision of future developments in the European retail payments market. It concludes that an evolutionary path is more likely than a revolutionary one. Regarding the future regulatory framework for retail payments, it proposes that the movement from entity-based towards more activity-based regulation should be continued.

Exploring Consumers Adoption of Mobile Wallet in Kolkata

Technological advancement in digitalisation has changed the way business is done nowadays. The mobile payments market in India is growing at a rapid pace, as a result of growing smart phones and internet penetration. The present study aims to identify the factors that influence consumers in adopting Mobile Wallet and various risk and challenges faced by the users of Mobile Wallet. A structured questionnaire was prepared and data was collected from 120 respondents and the obtained data were analysed using ANOVA to get the statistical result. It is found availability, safety and accessibility plays an important role in adoption of mobile wallet.

Banks in the face of regulatory changes in the payment services market

The article is a review of the book by professor Stanisław Kasiewicz entitled PSD2 – krytyczny przystanek na drodze do nowej ery bankowości. The book discusses the potential impact of the amended EU regulations related to the payment services market on the Polish banking sector. The book includes considerations on regulatory policy in the field of financial innovation as well as the desired directions for its improvement. The book also provides analysis of how the development of financial innovations can impact the future of the Polish payments market. Simultaneously, the key areas in the context of adapting banks to the new market reality under PSD2 have been identified by the author.

Enhancing party identification in payments messaging with the Legal Entity Identifier

Like other areas of banking, the world of payments suffers from a high cost of regulatory compliance and outdated methods to ensure accurate and reliable data for legal entity identification. The use of the Legal Entity Identifier (LEI) as a key element in legal entity identity management within the payments life cycle can help solve these issues. Including LEIs in the payments life cycle provides verified, authoritative information about the exact legal entity involved in payments transactions to the parties involved in the process. The Payments Market Practice Group considers the migration to the ISO 20022 payments messaging standard, and use of the LEI within that migration, a key opportunity to rethink how and what reference data are sourced and used for legal entity identification, and to make real enhancements to such identification and messaging processes for the payments community.