;)
Post a Comment »The Future of Payments
What do energy, telecom and payments have in common?
Very few
Most people immediately scoff at the bold statement, but hear me out. Energy has seen a massive disaggregation in the. The era of vertically integrated monopolies came to an end in ’05? Continued move towards separation in each segment of the energy value chain. Vertically
As a result of advances in regulatory policy, technology, competition, etc… starting as an integrated value chain, it became disaggregated into five segments – extraction, processing, wholesale, delivery and retail . About 10 years ago, we saw this further disaggregate into …
Best e.g. Delivery split – transmission (big pipes and wires) / distribution (little pipes and wires) (first this happened with gas, then electricity)
On the retail side, it’s splitting up to cater to 2-3 different markets (e.g. large businesses vs. mass market consumers)
Some companies choose to operate in some or all of these segments, but the era of vertically integrated monopolies is over. In order to remain competitive, players must specialize to cater to customer needs
As players seek growth, some will try to grow vertically (re-verticalization), e.g. oil & gas majors
Another strategy will be horizontal specialization -
Payments: Market Sizing
Firstly, this is not total throughput. That would be approximately 50 times larger. This is simply the revenue opportunity in the payments space. Note the offline space is approximately 10 times larger and
And if the question is how much room for electronification is left in payments, then note that currently of all the offline transactions that take place today, over 80% are still conducted in cash.
Blah Blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah