Former executive at Automatic Data Processing Inc (ADP)
- How is the digitisation of B2B payments impacting the roles of business software providers, card networks and issuing banks?
- Market sizing and segmentation for payment flows associated with payroll advances, corporate paycards, digital wallets, earned wage access and more
- Competitive positioning across major card networks such as Visa (NYSE: V) and Mastercard (NYSE: MA), business software providers such as ADP (NASDAQ: ADP), SAP (NYSE: SAP) and Oracle (NYSE: ORCL), and issuing banks such as Chase (NYSE: JPM)
- 3-5-year performance outlook and challenges for creating a global solution
How would you describe the market opportunity, given we’re discussing some of the largest businesses and industries in the world and they seem to be converging around who will own the operating system for businesses in the future? Where does this kind of market opportunity sit within the broader scope of B2B payments and business software? What notable innovations or trends have you seen driving this convergence?
How would you assess the pandemic’s impact on the relative positioning of players, including the card networks, business software providers and issuing banks?
Where are we in the adoption cycle? How might adoption differ across size, segments or even geographic regions?
How would you frame increasing inflation, rising interest rates or a potential near-term recession in this discussion? Does today’s macroeconomic backdrop affect adoption rates in any meaningful way?
How would you go about sizing the market opportunity and potentially segmenting it?
Is there any way to think about segmenting the market by the payment flows, whether by virtual cards or real-time payments networks and so on?
Can you comment on the earned access piece? What underlying forces are driving that explosive adoption? What set of circumstances for the underbanked population creates the need for an early wage access product? How might adoption trend?
You mentioned the extra nuance of the hourly worker, but do you see any nuance across industry verticals? Earned wage access seems a very good product fit for the restaurant industry, but what are your thoughts around industry-specific competition?
What group of players has the best positioning in terms of earned wage access economics? Is it focusing on the business software players or will there be more of a stretch from card networks or the issuing banks?
How do these partner- and competitor-ship relationships evolve over time? What is the breaking point if players such as ADP are still relying on issuing banks and card networks, but have the potential to disintermediate as technology advances around these transactions?
Do you have any incremental thoughts about additional M&A from any of the players involved? We’ve seen aggressive acquisitions in much of the B2B payment space, especially from Visa and Mastercard. What consolidation are you expecting over the next 3-5 years?
Which specific targets or monoline businesses could you see being walled up and verticalised?
Can you comment on the relative positioning of the Visa and Mastercard players? You alluded to American Express needing to figure out its own strategy in this space. How might competition evolve among these three?
Do you see a distinct advantage between Visa and Mastercard, or is it agnostic at this point?
How do competitive dynamics differ, if at all, when assessing the smaller end of enterprise sizes? You said there isn’t really demand from businesses with under 20 employees. What’s the progress and competition in the lower end of the market?
The cross-border and global payments piece still represents a significant challenge for this type of payment. What structural issues make it so challenging? Who is leading or lagging in terms of achieving a more integrated cross-border or global payments system in this type of market?
What’s your outlook for potential market share winners and losers across the spectrum of different player groups? I understand we’re in the early stages of adoption for the modernisation of this industry, as well as it being such a large pie to begin with.
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