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Digital payments firms: Their KPIs, value propositions and success factors

  • Digital payments firms are targeting growth in transaction value, user numbers and product/service innovation

  • The key values delivered by these companies include seamless execution, fast approvals and customer responsiveness

  • Payments fintechs attribute their success to user-friendly platforms, seamless execution and innovative offerings

Digital payments firms: Their KPIs, value propositions and success factors
Rabail Adwani
Rabail Adwani

Equity Research Analyst

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Contributors
Rohit Kumar
Rahul Shah
Tellimer Research
2 August 2022
Published byTellimer Research

Our proprietary global survey of 215 fintechs (including 56 digital payments firms) helps us position digital payments in a broader emerging markets context. Payments fintechs are focused on increasing transaction value, user numbers and product/service innovation. Relative to other fintechs, they are less focused on credit defaults, profitability and brand strength.

The top customer-value propositions cited by payments firms include seamless execution, fast approvals and customer responsiveness. These top values are broadly aligned with the aggregate results from other fintech sub-sectors. However, payments fintechs placed less importance on pricing transparency and delivering unique offerings.

Meanwhile, the main drivers of success for these firms are user-friendly platforms, seamless execution and innovative service offerings. Compared with fintech firms in other sub-sectors, payments firms give less credit for their success to funding access and operational efficiency.

Targeted KPIs: Transaction value, user numbers, product/service innovation

According to payments fintechs, the key performance indicators they track are transaction value, user numbers and product/service innovation. These top KPIs are aligned with the aggregate results of our fintech survey. However, payments firms are less focused on financial performance than their peers in other sectors, notably in relation to credit defaults and profitability. Somewhat surprisingly, they also place less emphasis on brand strength.

In our previous survey (2020), customer satisfaction, product/service innovation and market share topped payments fintechs’ targeted KPIs. While digital payments firms are still keen on lifting market share via transaction value, their emphasis on building customer satisfaction to gain loyalty has lessened.

Transaction value

This is the most frequently targeted KPI and one of the metrics commonly used by investors to assess payments fintechs. Firms actively targeting transaction value growth include PalmPay (Nigeria) and MobiKwik (India).

User numbers

Growing the user base is key to generating scale and opening the door to cross-selling/up-selling opportunities. Payments fintechs focusing on growing their customer base include Airtel Africa (South Africa) and JazzCash (Pakistan).

Product and service innovation

Product and service innovation enables payments fintechs to reach their customers more cheaply and effectively. It also helps these companies to be more relevant to their customers, for example by offering them greater convenience and/or a better user experience. Firms that cite these innovations as key to success include PesaPal (Kenya) and Starpay (the Philippines).

EM payments fintechs: targeted KPIs

The customer-value proposition: Seamless execution, fast approvals, customer responsiveness

The top values provided by payments fintechs are seamless execution, fast approvals and responsiveness to customer needs. These are aligned with the aggregate results of our fintech survey, albeit that payments fintechs place less emphasis on pricing transparency and on delivering unique offerings.

In our previous survey, product quality, security and faster approvals topped the list of key values for payments fintechs. However, these firms now cite security and branding less often, while the importance of speed has increased.

Seamless execution

Users increasingly demand that payments fintech-operated platforms and mobile applications should operate without any delays or interruptions. Firms that cite seamless execution as their key value include MoMo (Vietnam) and iBoxPay (China).

Fast approvals

Payments fintechs can bypass the legacy systems used by incumbent firms that require human interaction. They may also be less constrained by compliance checks. Firms highlighting fast approvals as their key value include Gojek (Indonesia) and Clip (Mexico).

Responsiveness to customer needs

Many incumbent firms are failing to address customers’ specific needs (due to difficulties in tailoring products/services), which is creating opportunities for payments fintechs such as NextPay (Vietnam) and NayaPay (Pakistan).

EM payments fintechs: key values

Factors for success: User-friendly platforms, seamless execution, innovative service

The top factors credited by payments fintechs for their success to date include user-friendly platforms, seamless execution and innovative service offerings. Relative to other fintechs, fast transaction speed is considered more important. Meanwhile, payments fintechs place less emphasis on funding access and operational efficiency as success enablers.

In our previous survey, the top payments fintechs’ success factors were innovative service offerings, product quality, and targeting the financially excluded.

User-friendly platform

Payments fintechs need to create an easy-to-use and seamless interface where operations are self-evident or easy to perform. Firms citing this as a success factor include Yeahka (China) and Vinatti (Vietnam).

Seamless execution

This is the most-cited value proposition by payments fintechs and also one of the key success factors. Firms citing seamless execution as their success factor include EasyPaisa (Pakistan) and Masary (Egypt).

Innovative service offerings

Innovation is a key pillar for payments fintechs’ success. It can, for example, allow firms to improve their service offerings and, hence, enhance the consumer experience. Firms that are striving to innovate include Payfazz (Indonesia) and PaySky (Egypt).

EM payments fintechs: success factors

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