Industry Research

Part
01
of two
Part
01

Vertical Payments Industry

The vertical payment industry is a part of the real-time payment market which enjoyed great growth as many opportunities for growth exist, especially in the areas of security and contact-less payments.

OVERVIEW

  • Vertically focused applications, including payment applications, enhance the customer experience and are more efficient for businesses.
  • The last decade has seen drastic growth and evolution, with new providers, platforms and tools launched every year.
  • Vertical companies that offer services that are targeted specifically to customer needs will flourish, compared to companies that have more generic offerings and experience less turnover.
  • Value-added models that monetize data-driven campaign engines, such as vertical offerings for industries are becoming more popular for the benefits they offer all parties involved.
  • Real-time payments present businesses with an opportunity to gain and retain business by offering a secure, efficient commerce experience.
  • Combining business application with the ability to process payments creates a more efficient, integrated process that lets the merchant serve their customer more effectively.
  • Vertical SaaS companies overall have enjoyed a tripled market size over the last decade and have a $1.3 billion higher enterprise value.
  • In 2019, vertical SaaS providers will succeed as they will be able to address customer's needs within their niche.

GLOBAL REAL-TIME PAYMENT MARKET

GLOBAL REAL-TIME PAYMENT MARKET FORECAST

OPPORTUNITIES FOR GROWTH

  • Retail and e-commerce will continue to be the largest market.
  • The next five years will see mobile payment processing emerge as a prominent part of the industry.
  • Off the shelf vendor solutions are gaining in popularity because of their lower operating costs as compared to in-house developed technology.
  • With the growth of e-commerce and fraud, there is an opportunity for companies that can address fraud mitigation and management.
  • Hardware-level security is not used by many mobile wallets and banking applications, showing an opportunity for growth in this area.
  • Contact-less payments are becoming a preferred way to pay as they are hassle-free.
  • 41% of US citizens say their smartphone or tablet is their "most important shopping tool," making this a key area for growth.

GROWTH FACTORS

  • The high percentage of smartphone users, cloud-based solutions, customer demand for immediate payment solutions, and merchant need for quicker settlements all offer growth opportunity.
  • The internet growth rate has and will play a key role in the growth of the digital payment industry.

RESEARCH STRATEGY:

We began our research by getting an understanding of the vertical payment industry. As we were doing this, we noticed that there were few mentions of the vertical payment industry specifically, but a side note when talking about the real-time payment markets.

In an attempt to get more specific information, we searched for industry studies and found many studies that addressed the payment industry as a whole, but only one that covered vertical payments. We consulted Market & Markets, Market Research, ACI Worldwide, and Research & Markets to obtain market research. Therefore, we found an accessible report on the global real-time payment industry with market forecasts.

In addition, we found a report from Market and Markets that addressed the vertical payments' market. Unfortunately, it was a paid study, and we could not access it. Also, we found a free study that specifically addressed the vertical market, but it did not cover the market size or forecast.

In an effort to get concrete statistics, we went to Statista and searched for the market specific to the US. We were only able to locate a global market for real-time payments and various statistics for credit card processing that did cover the US. They are attached as google docs (here and here) as they might be beneficial.

We searched through PR Newswire, Modor Intelligence, Bloomberg, and Business Insider, and Trust Radius for relevant news or reports. Again, we were able to find information about the benefits of using vertical payments, but not specific market amounts. Through this research, we were able to locate many areas for growth and included those. We also found information pertaining to the vertical application industry as a whole and gleaned some information that was useful. We did not find any accessible information on vertical payments, but again found information for the real-time payment industry.

Next, we consulted Financial Times in search of any research that might be published in articles and found one article that mentioned vertical payments, but it was a premium article and we could not access it.

We believe that this market is relatively new and gaining in popularity, thus the lack of concrete information. The paid information located would provide a deeper look into the market. By expanding our scope to include the real-time payment industry on a global scale, we were able to answer the question.
Also, we included opportunities for growth in the market, as we were able to locate those in the market research and studies we were able to access.
Part
02
of two
Part
02

Health & Wellness Software

The health and wellness software landscape includes software designed for general health & wellness businesses, software designed for corporate wellness programs, and software that is geared to specific types of wellness practices such as yoga, spas, gyms, and chiropractors. Below, we look at each area individually to provide an overview of the types of software available to small businesses in the wellness industry.

Software Landscape

  • There is a great deal of software available for small businesses in the health & wellness industry; however, most of it is focused on a particular area of wellness rather than being software that would work well for a variety of disciplines. The two exceptions to this are MindBody Business and Wellness Living, which both offer customization for businesses focused on yoga, fitness, integrated health, and more.
  • Most companies listed as competitors of MindBody Business were designed for a particular wellness area such as fitness, gyms, or martial arts studios.
  • Many of these businesses are accessible to small businesses because the monthly charge is based on the number of clients/records.

General Health & Wellness Software

  • MindBody Business is business management software designed for businesses that focus on wellness. In addition to offering services that most businesses need such as marketing, online booking, and point of sale transactions, it also offers wellness specific features such as branded apps and web tools; fitness performance software; and business listings. Additionally, the company offers products specific to yoga, fitness, integrated health, and spas.
  • Wellness Living is business management software and tools for wellness businesses. The software offers typical business management tools but also has software specializations for a large variety of wellness business including yoga, crossfit, personal training, dance, massage, traditional and alternative medicine, and pole dancing.

Gym/Studio Software

  • Zen Planner is business software designed for gyms and studios. The software offers billing, marketing, tracking, apps for members and staff, scheduling, and more.
  • GymMaster is business management software for gyms and clubs. Features offered include membership apps, point of sale, online booking, communication tools, website integration, and more.
  • Perfect Gym offers a wide variety of services including club management, point of sale, mobile app, client portal and payments. Specific to the wellness industry, the software provides online booking, retention tools, and online class payments.

Alternative Medicine

  • ChiroTouch is a specialized software designed for small and large chiropractor offices. The software helps with notes, payments, client management, patient check-in, scheduling, and more.
  • Unified Practice is software for acupuncture offices. The features offered include medical charting, scheduling, online forms, appointment reminders, billing, reports, and educational databases.
  • HealingRadiusPro is software designed for Reiki practitioners. In addition to typical business management software, the software provides a business listing on their online marketplace, review management, and staff management.

Corporate Wellness Software

  • WellSteps is a business wellness program that works with companies of all sizes. They have a program for companies with less than 100 employees that provides personal health assessments, rewards tracking, screening reminders, behavior change campaigns, and more. The company also posted a blog on why small businesses are a great fit for employee wellness programs.
  • MeYouHealth provides software for small businesses to operate an employee wellness program. It includes a variety of features such as a mobile app, reporting, health assessments, education, weight loss and smoking cessation programs.
Sources
Sources

From Part 01
Quotes
  • "The global real-time payments market was valued at US$ 6.24 Bn in 2017 and are likely to witness steady growth, growing at a CAGR of 14.5% during the forecast period from 2018 to 2026"
  • "Real-time payments help financial institutions, consumers, merchants, and society by providing superior visibility into payments, enabling better cash management and by helping businesses to better manage their day-to-day operations by improving liquidity"
  • "Technological advancements in mobile technology and high-speed internet networks have changed the way consumers interact with services and are boosting the demand for speed in the interbank systems. As a result, increasing proliferation of smart devices is one of the major factor driving the rapid adoption of real-time payments worldwide."
  • "The global real-time payments market, based on end-user vertical was led by the retail & e-commerce sector in 2017. Real-time payments are presenting retailers and e-commerce businesses with an opportunity to serve, win, and retain their customers through more efficient, secure and engaging commerce experiences"
Quotes
  • "The real time Payments market is expected to grow from USD 6.8 billion in 2018 to USD 25.9 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 30.6%. "
  • "The major growth factors expected to drive the growth of the real time payments market include the high proliferation of smartphones, adoption of cloud-based solutions, customers' demand for immediacy of payments and quicker payment settlements, and the government initiatives. "
  • "The retail and eCommerce vertical is expected to have the largest market size and grow at the highest CAGR during the forecast period. The huge demand for instant payment settlements from retailers and merchants has led to the maximum adoption real time payments solutions and the associated services. Real time payments solutions provide a competitive edge to retail and eCommerce businesses by offering them a cheaper and faster mode of payment. Moreover, customers prefer online shopping due to the increasing integration of mobile devices in their shopping habits."
  • "In August 2018, ACI Worldwide partnered with SPAN Enterprises, a cloud-based software company, to boost payments and enhance the customer experience in the transportation industry by deploying ACI's Official Payments, an IRS tax payment system. "
  • "In September, Fiserv agreed to acquire Elan Financial Services, a unit of U.S. Bancorp. Elan Financial Services is a provider of debit card processing, ATM managed services, and MoneyPass surcharge-free ATM network. The acquisition would enable Fiserv to strengthen its presence in the arena of debit card processing and expand its mobile and digital payments offering for consumers and businesses. "
  • "In June 2018, PayPal acquired Simility, a leading fraud prevention and risk management platform, for USD 120 million. Paypal aims at expanding its fraud prevention and risk management portfolio for merchants, following this acquisition. "
Quotes
  • "The real time payments market is expected to grow from USD 6.8 billion in 2018 to USD 25.9 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 30.6%. The major growth factors expected to drive the growth of the market include the high proliferation of smartphones, adoption of cloud-based solutions, customers’ demand for immediacy of payments and quicker payment settlements, and the government initiatives."
  • "The retail and eCommerce vertical is expected to have the largest market size and grow at the highest CAGR during the forecast period "
  • "Major vendors in the global real time payments market include ACI Worldwide (US), FIS (US), Fiserv (US), Mastercard (US), Worldline (France), PayPal (US), Visa (US), Apple (US), Ant Financial (China), INTELLIGENT PAYMENTS (Gibraltar), Temenos (Swtizerland), Wirecard (Germany), Global Payments (US), Capgemini (France), IntegraPay (Australia), SIA (Italy), Obopay (India), Ripple (US), Pelican (UK), Finastra (UK), Nets (Denmark), FSS (India), Montran (US), REPAY (US) and Icon Solutions (UK)."
Quotes
  • "This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares. "
  • "Over the next five years, mobile payment processing systems are expected to become a prominent part of the industry. The new technology has already gained a foothold in some industries but will become more widespread over the next five years as developers improve their interfaces, consumers grow comfortable with the new technology and industry players prove they are more efficient and convenient than their many alternatives. "
Quotes
  • "Many organizations are enjoying the benefits of lower operating costs as a result of deploying off-the-shelf vendor solutions."
  • "There are clear signs that the adoption of off-the-shelf vendor solutions is enabling many to deliver on these objectives. "
  • "Across all enterprises, 44% of organizations reported that the operating costs of their payments business had increased over 2014– 17, while 13% had experienced a decline. This has been particularly acute in Asia, where 47% of banks and 46% of merchants report cost growth."
  • "Organizations that have seen their costs fall by 5% or more report that 36% of their core payment applications are off-the-shelf vendor products (including where customized in deployment) and 35% are in-house developed. Among those that have seen the highest cost growth, internally developed software accounts for 41% of their infrastructure."
  • "Many organizations also expect to enjoy operating efficiencies, with 78% of banks and merchants and 82% of billers expecting to see cost reductions due to real-time payments. "
Quotes
  • "Total transaction value in the Digital Payments segment amounts to US$962,027m in 2019. "
  • "Total transaction value is expected to show an annual growth rate (CAGR 2019-2023) of 8.6% resulting in the total amount of US$1,339,005m by 2023. "
  • "The market's largest segment is Digital Commerce with a total transaction value of US$874,424m in 2019. "
  • "From a global comparison perspective it is shown that the highest cumulated transaction value is reached in China (US$1,563,675m in 2019). "
Quotes
  • "Value-added models are becoming popular in the mobile payments arena. Companies are starting to monetize data-driven campaigns engines."
  • "Some of the value-added offerings take the form of white-label applications development for vertical industries. This type of model is expected to proliferate given the benefits it brings to all parties."
  • "The key to successful m-payment applications is the ability to make them pervasive, so users grow to rely on them. Partnerships with ecosystem participants from all sectors (banks, retail, service providers and public sector) are essential to building a ubiquitous network of acceptance points. In addition, having a well-defined pipeline of compelling use cases is key for mobile payment providers to leverage the ecosystem to grow their user base and drive transaction volume."
  • "With smartphone usage on the rise and a plethora of mobile apps, consumers and businesses are using mobile devices in new and innovative ways. There is already a dynamic competitive environment for mobile banking, and now for mobile payments."
Quotes
  • "Vertically-Focused Applications Enhance Customer Experience"
  • "It has become increasingly difficult for merchant services providers to compete without an integrated, vertically-focused solution. Combining business applications with payment processing capabilities creates a frictionless, integrated experience and allows an SMB or merchant to more effectively serve its customer base."
  • "Regardless of the vertical, providing a comprehensive solution, underpinned by a fundamental understanding of an SMB’s core business requirements, creates a stickier and more valuable customer relationship."
  • "Vertically-focused, integrated payments providers are well positioned to gain share of the large, growing and highly fragmented merchant processing market. "
  • "Meanwhile, the growth of e-commerce, movement of fraudsters online, and ease with which consumers can make payments and dispute transactions are creating opportunities for companies that specialize in fraud mitigation and management. "
Quotes
  • "The global digital payments market was valued at USD 3,417.39 billion in 2018, and is expected to reach USD 7,640 billion by 2024, recording a CAGR of 13.7%, during the forecast period of 2019-2024."
  • "Money and the idea of its exchange through payments have evolved drastically after their inception. From metal coins to paper, from bank accounts to e-wallets, money has taken various shapes, sizes, and forms. Over the last decade, the payment industry has recorded a robust growth, with new providers, new platforms, and new payment tools being launched almost every year."
  • "The market studied is expected to flourish, owing to the robust proliferation of the internet. The internet penetration rate has been recording a healthy growth over the past few years, and is expected to continue traversing the same trajectory, owing to increasing investments by internet service providers."
  • "Security is of paramount importance in digital payments. With a multitude of digital transactions taking place via smartphones, the chances of a security breach exist, especially when most of the mobile wallets and banking applications do not deploy hardware-level security, to make online transactions more secure."
  • "Digital payment is all set to be the preferred mode of payment for US citizens. For instance, 41% of all shoppers said that their smartphone or tablet is becoming their ‘most important shopping tool. Moreover, mobile payment is the preferred mode of payment among millennials."
  • "When comparing online/e-commerce (no card present) payments with card-in-hand payments, digital proved to be the higher growth category, accounting for growth up to 23%, over the last year."
Quotes
  • "Contact Less Payment Method to Emerge As One of the Preferred Option"
  • "Contactless payment is an alternative payment channel. It uses short-range wireless technologies, such as radio frequency identification (RFID) or near field communication (NFC), to securely complete payments between a contactless card and contactless-enabled PoS terminal."
  • "Driven by hassle-free and convenient experiences, contactless payments are witnessing robust adoption in countries, such as the United Kingdom, Australia, Canada, and Singapore. For instance, in the United Kingdom, the number of contactless transactions reached 2.86 billion in 2016, thereby, indicating a growth rate of about 174%."
  • "The mobile contactless user base increased from about 20 million in 2015 to 144 million in 2017. Thus, with the increasing acceptance of mobile and digital payments, contactless payments are anticipated to record growth. Moreover, the adoption of contactless cards is projected to transform the landscape of traditional payments, as these cards act as significant threats to EMV cards and the magnetic stripe technology."
  • "United States to Account for the Most Significant Share in North America- Digital payment is all set to be the preferred mode of payment for US citizens. For instance, 41% of all shoppers said that their smartphone or tablet is becoming their most important shopping tool. Moreover, mobile payment is the preferred mode of payment among millennials "
  • "E-commerce sales in the region are also increasing, with the improvement of digital payment experience. This increase also reflects consumers' increasing comfort with online shopping, coupled with their increasing use of mobile and hand-held devices."
  • "When comparing online/e-commerce (no card present) payments with card-in-hand payments, digital proved to be the higher growth category, accounting for growth up to 23%, over the last year."
  • "Competitive Landscape- The market is moderately concentrated. The competitive rivalry in the market studied is moderate, as a good number of players prevail. Despite the existence of several companies in the market studied, firms are required to keep innovating their products, in order to gain a sustainable competitive edge over their rivals and provide product differentiation. "
Quotes
  • "Behind the scenes, payment processes and stakeholders remain similar. But providers are forced to make payments as frictionless as possible as online shopping surges: E-commerce is poised to exceed $1 trillion — nearly a fifth of total US retail — by 2023."
Quotes
  • "In this past decade, the market size for vertical SaaS companies has tripled. Previously, many developers and thought leaders thought industries like agriculture, home health care, industrial, etc. wouldn’t quickly jump on board with new, mostly cloud-based software. Much to their surprise, they have."
  • "One study found that vertical SaaS companies have a $1.3 B higher enterprise value than horizontals and are more profitable by about 30 points on an EBITDA margin basis."
Quotes
  • "Our second forecast for SaaS trends in 2019 is Vertical SaaS. Whereas Horizontal SaaS focuses on clients across any sector and industry, Vertical SaaS is completely customizable, targeting clients within specific industries and supply chains. Some examples are healthcare BI software, retail analytics software, or modern logistics analytics. Companies who are looking to benefit from specialization are finding Vertical SaaS to be a cost-effective, industry-specific option that allows them to refine the customization of certain features."
  • "Why the Vertical SaaS trends are going to have such an impact in 2019? Vertical SaaS providers also have the ability to adapt features according to client demand and industry, and effectively address customer needs within their niche. This results in more flexibility and upselling opportunities, and lower customer acquisition costs. "
  • "A higher standard: In 2019, a higher quality service from industry-specific vertical SaaS providers will emerge, as each developer aims to distinguish itself from the ever-increasing crowd."
Quotes
  • ""The retail vertical is expected to dominate the payment security market.""
  • "The popularity of online shopping is increasing in the retail industry. Retail merchants regularly face a challenge in managing consumer's sensitive data related to payment cards and complying with the regulations. "
  • "This vertical is one of the most targeted verticals by cyber-attackers because of the potential payouts and huge number of monetary transactions made via VISA, MasterCard, and other payment processing networks. This necessitates substantial investments in payment security solutions by this vertical, making it the highest contributor in the payment security market."
Quotes
  • "Vertical SaaS companies also see less churn – customers dropping their product – because their products are so hyper-targeted that customers become unable to live without it. Contrast that with horizontal SaaS companies, whose Achilles heel has always been that their products are so generic that switching cost is lower than expected."
  • "TAM, of course, will always be a concern. That’s why entrepreneurs building vertical SaaS companies need to provide services and software that address a customer’s entire business operations – the “full stack” – in order to maximize total revenue opportunity and revenue per customer as a means of offsetting the cost of sales at a lower price point."
  • "That’s why businesses strive to increase revenue by offering simple, full-stack solutions that lower the total cost of ownership and make their employees’ jobs easier."
From Part 02
Quotes
  • "Manage your business, from wherever you are. With integrated point of sale and the ability to sell contracts, the business app is more versatile than ever."
  • "Built-in payments have never been easier, whether you’re at the front desk, on the go or anywhere in between. Select from a range of point-of-sale hardware to suit your business needs."
  • "Get your own branded mobile app, and keep your customers more engaged."
Quotes
  • "With member management software, integrated marketing, enhanced retention and member self-service capabilities, you have everything necessary to spend less time behind your desk and more time changing lives in your community."
Quotes
  • "GymMaster is gym software designed to make it easy to maintain detailed records of your members and their memberships, book classes and trainers, process and track sales, and communicate en mass with the right members at the right time."
  • "GymMaster’s Access Control System provides an easy to implement and convenient way for members to access your facility giving you added security and peace of mind. Our network-based reader is designed as a low-cost and reliable way to provide access control for your members."
Quotes
  • "Make online booking convenient for your fitness club members. Our Client Portal integrates with your website to streamline all personal training, fitness facility, and class bookings on any device. Members can also manage all aspects of their accounts including registration, contract renewals, payments, and more."
  • "Our Business Intelligence module is powered by machine learning algorithms. We deliver fresh insights on how many gym members may be expected to leave your fitness club at any given time. This data is based on club member actions taken, their preferences, and how similar members behave."
Quotes
  • "Well, once your business is claimed with us, it will appear within HealingRadiusPro online marketplace of wellness centers and independent therapists. That means when potential clients search for holistic health solutions in their area, your name will pop up in the listing page! They'll then be able to view your website, hours of operation, services and treatments, read reviews from other clients, and book an appointment with you instantly."
  • "On the business management side, you will have access to a wide range of simplistic and easy-to-use features. Online booking, staff management, and contact management are just a few examples of the tools you'll be able to use for a more relaxed and stress-free work experience. What are you waiting for? It's time for us to handle the work for you so that you can get back to doing what you enjoy most."
Quotes
  • "Participation rates are generally higher, and the level of engagement in wellness programming is better in small businesses. In small businesses, wellness programs are easier to organize and easier to administer."
  • "Small business leaders can generate strong social support for wellness programming. Because they are more visible, their participation in the wellness programs is seen by all. Lastly, small businesses that have leadership support for wellness more often have effective and well-functioning wellness committees."
  • "Stated another way, workplace wellness programs can have a larger impact on employee absenteeism than they do on healthcare costs. Small businesses are the perfect place to benefit from reduced absenteeism."
Quotes
  • "We will help you assess employee and cultural health. We will assign a dedicated account manager who will organize all meetings, send messages, provide marketing materials, and other tools to help your program be successful. We will send campaign materials to a coordinator for distribution and provide campaign incentives. We will provide regular reports after major events and an annual report at the end of each program year. The WellSteps Small Business Solution is for groups with 100 employees or fewer."
Quotes
  • "Designed to boost all aspects of well-being, Daily Challenge enables members to improve their physical and emotional health, develop their sense of community, bring well-being to work, bolster their financial well-being, and explore their life goals. For members who want to customize their challenges, there are nearly 50 specialized well-being programs, from stress management and sound sleep to smart snacking and simple yoga."
  • "MeYou Health offers a customizable reward center that accommodates enrollment- and engagement-based rules. We can ship out gift cards, physical goods, fitness devices, nicotine replacement therapy, and/or send completion files for incentives like premium discounts, deductible credits, HSA contributions, etc. Employees can easily keep track of their progress toward these incentives in the reward center."