Strategy Consulting services in payments, merchant acquiring, digital banking and lending
Fintech Start-ups
- Building business operating models, financial models and product propositions across cards, merchant acquiring , digital banking and lending verticals
- Developing regulatory business plans for banking , lending, issuance and acquiring licenses
- Introductions to Visa & MasterCard and support for scheme license applications
Firms in rapid growth phase
- Identifying and establishing third party partnerships based on client mandate
- Supplier identification and commercial negotiations with banking and card payment system providers and processors
Commercially established Financial Institutions and Merchants (involved with card payments)
- Financial benchmarking studies to identify revenue / expense drivers which may be out-performing or under-performing relevant industry benchmarks across cards issuance and acquiring , digital banking verticals
- New market entry strategy (market sizing, competitor analysis, segment-product gap analysis)
Areas of Expertise
Cards & Digital wallets issuance advisory services
The global electronic payments industry has a combined turnover of US$ 43 Trillion, accounting for 30% of the personal consumption expenditure. With Digital Challenger firms in Europe introducing new branchless banking models and paperless on-boarding services, and the introduction of Open Banking powered by PSD2 legislation, the card and digital wallet issuance verticals will continue to be a hotbed of payment innovation.
CardAlpha Consulting can assist traditional financial institutions and fintech firms take full advantage of digital trends and “open banking “ and launch truly innovative payment instruments by offering the following services
- Market sizing
- Consumer segmentation and needs/gaps analysis
- Proposition development
- Financial modelling based on industry benchmarks
- Supplier selection including third party processors
- Introduction to Visa and MasterCard schemes and tailored support for scheme license applications
Merchant Acquiring
Merchant Acquiring – Building or managing an acquiring business requires a careful consideration of Target verticals or MCCs, Merchant size (depending of turnover), type of retail environment – instore, web based or unattended (vending, parking, transit), payment interface – contactless, QR code based or CHIP/PIN or MO/TO/EC, pricing strategy, distribution channels, merchant underwriting and risk management . Merchant Acquiring is a complex but a rewarding business if there is proper management focus and investment on sales channels, underwriting, product innovation, creating value added proposition bundled with core acquiring products. CardAlpha’s consulting services help benchmark acquirer or payment facilitator performance against global and regional benchmarks , identify areas of strong performance and opportunity areas of improvement. Recommendations for adapting strategy or tactical product/distribution/operations levers will be designed to accelerate advantages or eliminate problem areas , identified under the benchmarking study.
CardAlpha can assist in the following areas :-
- Merchant vertical sizing
- Acquiring proposition and product development
- Financial modelling based on industry benchmarks
- Planning for mPOS deployment
- Deployment of VAS for competitive differentiation
- Building go to market strategies for succeeding in the Small/Micro Enterprise merchant vertical
Financial benchmarking
CardAlpha’s operating model utilizes benchmarking studies to identify areas of excellence or improvement in existing payment propositions and delivers targeted recommendations to improve the Client’s operating and financial models in line with global or regional benchmarks.
For new Firms, CardAlpha can deliver go to market strategies backed with propositions, target operating models and financial projections to reduce time to launch and improve chance of early commercial success.
Benchmarking analysis are available for card issuance, merchant acquiring and consumer lending verticals.
Market entry strategy
CardAlpha Consulting can assist in developing an optimal path towards entering a new geography with a Client's existing set of products and services. Services will include :-
- Market landscape study identifying market size, verticals, segments, key players
- Identifying key competitors and characteristics
- Revenue pool estimation
- Gap analysis based on target verticals/segments
- Articulating different business models for launching
Select list of Client projects
Client : Europe's top challenger banking institution and Fintech Unicorn
Successfully implemented Visa & MasterCard scheme licensing and commercial negotiations for international market expansions. Adviced and co-executed alongside the management team on a set of initiatives relating to their licensing, commercial deals and strategic expansion into new products and geographies. Built client's internal knowledge assets and transferred best practices in successful management of debit and prepaid card portfolios to internal finance and operations team.
Client : Private Equity firm based in UK (portfolio company turnaround)
Worked alongside PE Partner and Management team of a portfolio company (in a merchant acquiring business) to identify areas of opportunity and gaps in current value chain and operating model. Identified new business verticals and operating models for strategic expansion with a focus on expanding payment facilitation business.
Client : Private Equity firm operating in Eastern Europe (PSP acquisition)
Commercial due diligence on behalf of PE firm on TargetCo to better understand TargetCo's target market, business model and operating model, strength and weaknesses and areas of opportunity. At PE firm's request, put together a 90-180 day action plan post buyout to improve competitive positioning of TargetCo by recommending initiatives across product, process, technology parameters.
Client : Global Mobile point of sale (mPOS) solution provider (Europe based)
Value chain analysis of the Merchant Acquiring business + mapping entry costs of entering full scale acquiring business
Client : Top 5 UK retailer with annual card payments volume in excess of £ 10 Billion (UK based)
Building strategic rationale for entering direct payments processing business under PSD2 and Open Banking legislation
Client : Private equity firm with portfolio companies in card payments and acquiring (UK based)
Mapping global acquiring payment trends and delivering an detailed description of the digital payments infrastructure in the Indian market
Client : Fintech firm active in cross border payments (UK based)
Value chain analysis of the global payments business + deep dive on the merchant acquiring value chain
* Client identies not disclosed in order to maintain confidentiality