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Research Outline

Prepared for Corrigan N. | Delivered June 24, 2020

Payments Market Analysis

Goals

To provide a market analysis of the payments markets and its various sub segments, specifically the companies that make payments on behalf of their customers. For example, P2P payment apps (C2C), bank bill pay solutions (C2B payments), procure to pay/payments automation software (B2B payments). However, this analysis should not incorporate e-commerce solutions, as that does not fit within the definition of paying an account.

The required information is as follows:
1. Solution facilities, B2B, B2C, C2C, or B2B payments;
2. Geography;
3. Types of bill payments it supports (focus on utility bills);
4. Bill ingestion mechanism (automatic, uploaded, Manual entry);
5. Market size for each segment ;
6. Number of bills processed per month through a payment company; and
7. Economic units used on the bill on each bill for the payment companies.

Early Findings

Background

  • Urjanet is a data account aggregator that specializes in getting data from utility providers. They have over 7,000 utility connections globally. Urjanet's product has the end-user link their account to Urjanet's platform by giving their utility provider credentials, a workflow similar to linking bank accounts to a Venmo, Personal Capital, or Mint. Urjanet's customers are businesses; who can access this data through a RESTful API.
  • Urjanet does NOT pay the bills.
  • The platform collects the necessary data to make the payment; what the payment is for, the amount owed, the payment date, and other vital account information. This enables its customers to automate the bill-paying process.

Payments Market

  • McKinsey's September 2019 Global Payment Market report states the market is worth $1.9 trillion in revenue annually and is currently recording a sustainable growth rate of 6%. This is against a 2018 forecast CAGR of 17.5% for the years 2019 to 2025 to reach a value of almost $9.6 trillion, which was thought by some industry experts to be unsustainable.
  • The Asia Pacific region dominates, accounting for $900 billion of the market's value.
  • The market segments based on type are: credit transfer; direct debit; check payment; and cash deposit.
  • The market segmentation based on application are: banks; financial institutions; and others.

North America Market

  • For the past four years, revenues in North America have increased 2-3% faster than the GDP, due in part to rapid transaction growth. The shift away from payments by cash or cheque has also contributed to its growth.

Utilities Payment Market

  • The most common form of payment for the utilities market remains the cheque, with many commentators noting the slow process of the utilities companies in offering digital payment options.
  • The continued use of legacy technologies has, in many ways, hindered its growth, as has the long investment cycle, and heavy government regulation.

Payment Market Trends

  • In the B2B and B2C markets, there has been a trend toward providing access to digital payment options. One of the issues impeding this trend is the high capital investment that is likely required by (in a number of instances) public utility companies.
  • This defense has been criticized by some experts who argue, utility companies have certain advantages, such as access to different networks and access to partnership opportunities.

Summary

  • In our first hour of research, we have focused on laying a foundation for a comprehensive payment market analysis by starting first with the broader payments market before focusing on the relevant segments. We have also scoped the necessary information to provide a comprehensive report that meets the project goals.
  • There is a considerable amount of information available in the public domain on this growing market that suggests the majority of the required information will be available. We recommend continuing as set out in the proposed next steps below.