Analysis

The evolution of the payments value model

How are customers redefining the way payments players make money?

We are seeing a shift in the payments value model from point-of-purchase to one more broadly focused on how and why people pay. We look at the impact this is having on the payments economic value equation.

Payment is integral to a customer’s purchase experience and the bottom line of many financial institutions. As companies continue to move to digital, the payment experience has become increasingly standardised, requiring companies to look beyond transactional fees for added value. The payments ecosystem is shifting to take advantage of this change.

In this report, we look at the disruption of the traditional payments model and current payment value drivers. We explain what we believe is the payments value formula of the future, and what the value drivers will be in the future digital-first economy.

We feature a case study from Standard Bank in South Africa to showcase some of this thinking in practice. It is based on interviews with John Anderson (Head Card Scheme Management) and Brad Gillis (Head Payments Africa Regions).

The payments value drivers are changing; companies need to proactively make investments to remain competitive, differentiated, and relevant.

The evolution of the payments value model

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