Payment Competitive Intelligence Case Study: The Australian Market

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Payment Competitive Intelligence Case Study: Navigating the Australian Payment Rail Market


Our client, an innovative player in the financial technology space, sought to launch a new payment rail in Australia in July 2022. Anticipating a significant market impact, they must thoroughly understand the competitive landscape. They aimed to assess their competitors’ capabilities and limitations in Australia. Then, determine the optimal market entry timing.

What Was Happening

Australia’s payment market was poised to transform with emerging technologies and evolving regulations. Key players were leveraging these changes, but the landscape was complex. Our client needed quality competitive intelligence into competitor offerings, performance expectations for new payment methods like PayTo, differentiators, and pricing strategies. Another article: Foresight and Unleashing the Financial Frontier: The Evolution of Banking and Fintech.

Key Questions

  1. Products Offered: Understanding the range of payment methods, additional services, and competitors’ unique products.
  2. Expected Performance of PayTo: Assessing the readiness, fallback plans, and performance metrics of the new PayTo system.
  3. Differentiators: Identifying competitors’ key differentiators and perceived competition.
  4. Pricing: Analysing competitors’ pricing models, transaction fees, and support costs.

What We Did

Our approach involved a multifaceted market analysis, employing quantitative and qualitative research methodologies. We conducted competitor interviews and spoke to competitors on a more informal basis. We analysed market reports and engaged in scenario planning to forecast potential market developments.

  1. Competitor Analysis: Detailed examination of competitor offerings, strengths, weaknesses, and market positioning. We assessed what the competitors were doing and going to do and how they tackled the regulatory problems. We got into their heads.
  2. Market Readiness Assessment: Evaluating the readiness of the market for PayTo, including documentation, integration with partners, and operational capabilities.
  3. Regulatory Review: Understanding the impact of Open Banking regulations. And how they could affect market entry.
  4. Financial Modeling: Assessing the cost implications for various payment methods and the impact on their business model.

Read more: The Fintech United Kingdom Fifty Movers And Shakers in 2022

The Results

Our comprehensive analysis revealed significant challenges for our client’s market entry:

  1. Market Position of Competitors: Existing traditional players were deeply integrated with Australian banking institutions, giving them a competitive advantage.
  2. Regulatory Barriers: The then state of open banking regulations in Australia presents significant barriers to entry for new disruptors. If the delay in bringing Open Banking to fruition was extended, it could be a financial problem for our client.
  3. Technological Readiness: Competitors were more advanced in implementing and adapting to the PayTo system.
  4. Cost Implications: The financial modelling indicated that competing on price would be challenging given the existing players’ established relationships and economies of scale. Our client had already started recruiting and appointing expensive talent within Australia, so this insight was revealing and perhaps upsetting. 

Our recommendations

We advised our client to delay their entry into the Australian market based on our findings. The existing competition and regulatory and technological challenges created a dangerous environment. A new disruptor would need help and significant funds to gain a foothold. And they had very little influence on the regulator who was holding all the cards. We suggested they focus on markets with less established competitors and wait for Australia’s more favourable regulatory environment.

Payment Competitive Intelligence Case Study

This strategic decision allowed our client to reallocate resources more effectively. They avoided a costly and unsuccessful market entry. Eighteen months later, they moved to Australia under more favourable conditions. And finally, we advised using competitive intelligence before putting a spade in the ground.

Read more: The Open Banking Initiative is Growing, But What Are The Challenges For The Sector?

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