KBW’s Latest Symposium Illustrates Mobile Payments Market Changes

March 6, 2019         By: Steven Anderson

Recently, Keefe, Bruyette and Woods (KBW) dropped word our way about its recently-conducted event, the Cards, Payments & Financial Technology Symposium. A series of meetings and presentations about various developments in just about every aspect of the mobile payments space, KBW also sent on a few key takeaways from the event, and the impact these will likely have on mobile payments.

First, there’s support for the mobile payments market thanks to several macro trends currently in progress. While it’s not all sunshine and roses, there are plenty of points pushing a positive outlook. “Some moderation” is expected in growth rates in 2019 as compared to 2018, and there are mixed signals in the cross-border volumes, but for the most part, things look at least reasonably bright.

Second, business-to-business (B2B) payments are looking like a fantastic opportunity in the making. Between the size of the market and the improved efficiencies mobile payments can represent, there should be hefty growth here. Businesses want improved efficiency, and can commonly afford to get it, so for those who can provide it there’s a real potential win afoot, especially as digital payments adoption increases.

Third, while mobile payments have struggled in the US somewhat, there’s a clear demand for a “seamless” checkout experience, especially among the millennial and Gen Z consumers who are driving the disposable income stakes right now. Mobile payments could be the secret to this checkout, as we’ve already seen to some extent already.

Finally, we have a look at the earlier-noted payment facilitator (PF) model. With independent software vendors (ISVs) going to PF models, there’s a very real possibility for market shakeups here. It’s bad news for merchant acquirer firms, but good for some firms, particularly Global Payment Network.

Taking all these facts together, it’s clear that KBW’s projections about there being plenty of opportunity are likely accurate. It’s also nothing we didn’t really know already from watching the field, but having an authority like KBW come down on this side just lends the argument some weight.

Ultimately, the symposium showed a lot of new opportunities for growth in the sector, and some downsides present as is commonly the case in nearly any market. Competition will be intense, but even niche players should have at least some room to run.