6 reasons why payments rule

By Nicolas Huss, CEO • Visa Europe

October 08, 2015

It takes Visa just six milliseconds to authorise your contactless purchase of your morning coffee. Most people don’t even think about how their payment is made. But, for anyone taking time to think about it, here’s six reasons why the business of payments should command a higher level of attention.

High potential

In short, the journey toward a cashless society has only just begun – When 70% of payments in Europe are still settled in cash, that tells me one thing – We have a long way to go and lots of work to do. And so much potential to fulfil.

High growth

What other segment of the financial services industry can report figures like an average 9% growth in transaction volumes per annum? One of the most exciting aspects of payments is that such growth is driven by the speed at which consumers and business are adopting new technology.


This is where it gets really interesting, because the innovation is emerging from everywhere, and all sizes of organisation. Perhaps we tend to think of innovation in payments as the natural domain of the start-up, and this is certainly bourne out by the 2,000+ payment startups on the Angel List. But look at the Fintech 50, of which 1 in 3 are payments specialists – And that’s before we get to Apple, Samsung, Google. Everyone in payments is an innovator.

High value

All this growth and innovations hasn’t escaped the notice of investors. Take a close look at how they value payment-related fintech businesses. According to analysis from AT Kearney, the P/E ratio of fintech payment businesses is twice the market average – and up to 25x for some. And, at the pinnacle of the start-up pathway, looks who’s up there in the so-called unicorn sector – start-ups valued at $1bn or more. Square is valued a $6n while P2P currency start-up TransferWise has attracted $1bn in investment.

The fact is, everyone wants a piece of the payments pie. The first half of 2015 saw 192 fintech mergers and acquisitions worth $18.9 billion, according to Berkery Noyes. That’s 14% more deals than the same period in 2014. Six of the ten biggest deals were payment related – with three breaking the $1billion barriers

High touch

From high finance to the zero moment of truth, as Google describes it. On average, a consumer makes 800 payments a year – 800 opportunities for interaction. That’s also 800 opportunities to enrich data. Innovation around the transaction, that enhances the experience, provides so many more opportunities than just customer satisfaction.

High Impact

Many forward thinking retailers also see opportunities way beyond the touch point too. They are starting to view payment as a strategic imperative. It can be a business enablers. Payments is one of the most critical steps in the customer journey. It provides a disproportionate contribution to the overall user experience. We can we can all think of a few instances when the hassle of paying for something has prevented us from buying it. Tackle the queues and checkout processes, maybe even remove them and revenues automatically increase.

So, just think about six of your favourite retail and e-commerce experiences. Just imagine these without an easy embedded payments solution. It may be Uber, Amazon, Booking.com, buying a bus ticket or riding a train. I hope that got your attention.

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