Specialist
Former VP at American Express Co
Agenda
- B2B payments landscape – market size, industry growth rates, and potential impact of the coronavirus pandemic
- Relative B2B payments strategies of Visa (NYSE: V), Mastercard (NYSE: MA) and American Express (NYSE: AXP)
- Amex's leverage as a business card issuer to develop a B2B payments platform and potential impact of integrations with trade platforms and payables software providers
- Outlook for 2020 and beyond, including potential M&A
Questions
1.
Could you give an overview of the key trends and drivers we should be monitoring across B2B payments?
2.
To what extent is the coronavirus pandemic and the ensuing economic downturn impacting the B2B payments market and its growth expectations?
3.
Could you estimate the market size for B2B payments and its growth rate? Visa’s investor day mentioned USD 185tn in new payment flows, of which USD 120tn was B2B. The company splits that out across traditional card-based solutions, cross-border, accounts receivable and payable, etc. How would you segment the B2B opportunity?
4.
What are your estimated growth rates across the segments you described? Which opportunities are addressable over the next 3-5 years vs longer-term?
5.
How would you describe the revenue opportunity in B2B payments for Visa, Mastercard and American Express over the next 3-5 years? How could these companies perform from more of a financial perspective?
6.
Could you elaborate on the revenue potential of monetising payment data flows, such as the lending models that might be derived from them? Which players are most likely to benefit? Could players adopt offerings similar to those from Square Capital or PayPal’s SMB lending business?
7.
What challenges still need to be cleared to accelerate B2B payment expansion? What are some potential catalysts that could accelerate growth?
8.
Could you compare Visa and Mastercard’s and American Express and Discover’s B2B payment approaches? You mentioned that the first two are pursuing an aggressive infrastructure play, whereas the latter pair are product-focused. How do their offerings and go-to-market strategies differ? Who is ahead of or behind the competition?
9.
You mentioned that Visa, American Express and Mastercard are all partnership-focused. To what extent do these players offer distribution services to companies such as Intuit, SAP and Sage Oracle? What bottlenecks might exist regarding take-rate share from B2B payments? How much end-user demand is there for integration between payment services and accounting software?
10.
Do you think it is more likely that B2B payments will evolve to be facilitated mainly in partnership with accounting software providers or the banks? What factors might drive the future towards one channel or the other?
11.
Could you comment on the quality of Visa’s B2B Connect? What timeline could this offering gain traction on?
12.
How much M&A activity could the B2B payments sector experience? Who do you think are some potential acquirers, consolidators and acquisition targets?
13.
What might be Coupa’s strategy, as a procurement software vendor that approaches B2B payments as more of a SaaS platform, and which companies can use to update their payment capabilities without updating their ERP?
14.
How do you think about other potential areas of opportunity in payments, such as B2C, G2C [government- to-citizen] and G2B [government-to-business]?
15.
What is your 1-5-year outlook for B2B payments, including how we should think about potential winners or losers across the companies we’ve discussed?
16.
Are there any industry assumptions about B2B payments you think we should challenge? Is there anything commonly misunderstood by the investment community which you can clarify?
