Not all payments are created equal: segmenting the payment landscape

Gottfried Leibbrandt

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This paper proposes a segmentation of the payments landscape by size of payments and geography.
The characteristics and underlying customer needs for each of these segments as well as their dynamics over time are analysed.
Fundamentally different needs and requirements in each segment are not easily satisfied by a single system.
In payments ‘one sizes may not fit all' and the segmentation could be a useful tool in designing new systems.

Abstract

ABSTRACT

The payments landscape is changing. Checks and cash are declining and being replaced by electronic instruments; a range of new players are taking aim at the role and position of banks; and new technologies such as Bitcoin/Distributed Ledger are even challenging the nature of money itself. An often-heard argument is "a payment is a payment", implying that a new player with a superior technology or customer proposition, if successful, would be able to ultimately replace all existing payment instruments/systems. This paper argues that the current payments landscape consists of segments with inherently different characteristics that require different approaches. Most dynamics occur within such segments, rather than across them.

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