A new study from Juniper Research (www.juniperresearch.com) has found that Visa and Mastercard’s distinct evolutionary strategies in digital payments will underpin the success of a market expected to increase from $3.8 trillion globally this year to more than $5 trillion by 2020.
The report pinpointed Mastercard’s two-pronged approach; the company is developing partnerships with third party wallets from players such as Apple and Samsung, while also introducing its own API-based wallet. Juniper says that Visa’s attempts to reduce friction in online payments through the implementation of one-click login (Visa Checkout) will increase conversion rates and overall online customer spend. Meanwhile, the study identified best-in-class players across the digital payments ecosystem, placing the following companies at the head of their respective Juniper Leaderboards: digital wallets: PayPal; PSPs (payment service providers): First Data; and telco payment providers: Vodafone.
Juniper says that that PayPal’s decision to enable in-store, NFC payments using HCE (Host Card Emulation) was a potential game-changer for the U.S. digital wallets space, enabling the company to leverage its strength in online payments. The research also defined a series of key strategic approaches for players across the digital payments market. For example, Juniper says that PSPs need to be able to offer merchants a range of options, including hosted payment pages and API integration, thereby allowing them to choose how much control they wish to exercise over the process.
“To succeed in an increasingly competitive environment, it will be essential for PSPs to provide merchants with an array of flexible, localized solutions with transparent pricing structures,” says research author Dr Windsor Holden.