Specialist
Former VP at American Express Co
Agenda
- Operating environment for B2B payments, highlighting digitisation trends and various revenue opportunities
- Sub-segment analysis and vertical-specific use cases
- Competitive positioning of major card networks – Visa (NYSE: V), Mastercard (NYSE: MA) and newer entrants
- 3-5-year sector growth outlook with sensitivity analysis around the impacts of a recessionary environment
Questions
1.
Could you provide an overview of the B2B payments sector, highlighting 2-3 key trends or drivers worth monitoring?
2.
How do you see the 40% of B2B transactions through cheques trending over the next 3-5 years? What will be the velocity of the remaining digitisation? Was it very easy to get from 80% to 40% for cheques, and now this later 40% is comparatively more difficult to digitise?
3.
You noted B2B payments having a TAM of USD 100tn-120tn. What is the tangible revenue opportunity for payment flows of the major card networks, and what are some of the strategies they’re exploring to monetise them?
4.
What structural issues are preventing the heavier transfer of B2B payment flows to the card spend that you highlighted?
5.
How do the underlying economics of B2B payment transactions differ between a card-based spend and something on the ACH [automated clearing house] or AP/AR [accounts payable/accounts receivable] auto side?
6.
Where does the concept of real-time payments networks fit into our B2B payments discussion? You mentioned that this would perhaps be an alternative channel to explore, to avoid that kind of card spend.
7.
Do you see any meaningful competition for real-time payments between Visa’s Direct and Mastercard’s Send products? Are they making any substantial inroads to develop meaningful product offerings?
8.
What is the decision criteria for assessing different B2B payment service offerings? How would you force rank deciding factors when choosing among vendors?
9.
Do you see any obstacles to adoption of real-time payments, in the sense of the timing of payments? It seems businesses might have an appetite to stretch out payments over a certain period of time so that it could be addressed on more of a quarterly, monthly or recurring-type basis, and cards will be able to facilitate that. Is that a meaningful obstacle to further adoption of real-time payment networks as it relates to AR/AP, or would there be potentially less of an appetite for immediate remittance on the payments or instant payment facilitation?
10.
Where is the most significant risk of fee pressures relative to card networks and the areas they operate in, especially considering product structures across B2B payments and how the market is in its early stages and will mature?
11.
How are you assessing regulatory risks for B2B payments? There’s been some general legislation introduced that’s starting to increase competition among card networks on the consumer side, though maybe not necessarily B2B payments.
12.
Might there be potential anti-trust actions against card networks with respect to B2B payments, or will it largely be ignored?
13.
How should we think of the broader B2B payment landscape and its sensitivity to economic cycles? What segments might be more sensitive vs resilient?
14.
Do you think the value pitch for B2B payment offerings such as AR/AP ones becomes stronger in a recessionary environment, given the cost savings that can be achieved through these systems, and the exploration by CFOs to reduce headcount?
15.
Do you see any particular verticals exhibiting out-sized adoption rates or maybe even lagging with the broader AR/AP automation trend?
16.
How should we think about business lending and its role in the broader B2B payments landscape?
17.
Do buy now, pay later and similar instalment loans have a compelling use case in B2B payments? I’ve seen reports where there is a claimed use case, but it’s had some popularity in the consumer side lately.
18.
How should we think about the evolution of cross-border B2B payments and services? Who are the primary players and what different go-to-market strategies do you see among them?
19.
Where does the application of blockchain technology and the broader concept of decentralised finance fit into the B2B payments discussion? Concepts we’ve been discussing such as instant settlement or payment facilitation through different rails are strengths that many blockchain evangelists are touting.
20.
Is there anything additional you’d like to highlight regarding B2B payments?
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