Monetisation of data in payments industry

Furthermore, it continues to attract new players across the globe who challenge and innovate constantly. In terms of fundamental shifts that are occurring:

• Payments tend to converge and blur towards seamless integration with mainstream trade and commerce; we call it the “uberisation of payments”, where payment is not an explicit action, but it is passively embedded within the entire customer experience;

• Payments have moved from niche to prime time focus, now attracting the big names like Google, Amazon and Apple, and also large money private equity companies like KKR, Bain, Advent, Hellman & Friedman

• Payments fintech and innovation are not just ideas, but are now proven in large scale multi billion market cap companies such as Square, Kabbage and Adyen.

Fintech has squarely injected new value into the finance, banking and payments industries forever and for the better. Innovation so far has resulted in new propositions, lower friction, better customer experiences, enhanced choice and personalisation, and overall more customer value add.

This all gets even more interesting when combined with deep and wide data utilisation, as then far larger opportunities open. Companies, often more fintech than traditional ones, are now successfully collecting and analysing mass data and monetising their business further. Technology advances such as API interconnectivity both internally and across partners’ organisations, access to real time monitoring of weather, traffic and other environmental factors, plus rapid advances in Big Data, Amazon Web Services (AWS), Machine Learning and Artificial Intelligence with complex automation are all reaching new levels of capability.

The most favoured data monetisation techniques today are profitability optimisation from more granular consumer data, and more upsell/cross-sell through higher quality consumer behaviour knowledge and predictive capabilities. When all this is combined by smart operational businesses, then new revenue streams, better margins and optimised costs show through – the gap between traditional businesses and the next smart generation is growing wider day by day.

Think about it, some companies are still trying to rationalise/refine their products and offerings so the customer experience is acceptable and the infrastructure modern enough to be cost effective to compete and be adaptive to new demands. To do this they have multiyear programmes and budgets of several hundreds of millions if not billions to get there. At the other extreme, you have companies who offer today attractive products and services with customer uptake ramping up exponentially; they are focused on the monetisation of the data around it, along with partners, to take the offerings to another league of value and convenience. Companies like Amazon, Square, Google etc. are spending the same budget levels as others but on fundamentally different things, they are investing and accelerating away.

So the big question then is where will the traditional incumbent organisations who are trying to reinvent themselves and the fintechs eventually end up? Our view is it will ultimately settle down with some key “old plus new” key partnerships, plus a lot of fall out and failed business prospects for the rest. The opportunities and rewards are enormous for those that openly embrace the new needs and models emerging. The only constant as we all know, is change.

About Adrian Hausser

Adrian co-founded PayX and is CEO. He is an international executive leader with over 30 years Payments Industry experience working for organisations including National Australia Group, CEKAB, Danske, TXN solution Integrators, ACI Worldwide and VeriFone.

About PayX

PayX, established in 1996, is an independent and global Market Analyst and Consulting Services Company specialising in the Payments Industry. PayX customers include many of the top tier Banks, Processors, Software Companies, as well as top tier players in the investment community such as Institutional Banks, Private Equity and VC.