Understanding buyer and seller behaviour for improved payment product development

Abstract

Every payment professional has tried this at least once: a full segmentation of payment solutions. One often sees arbitrarily chosen dual segmentations based on the properties of the different payment solutions. Examples are online vs offline, prepaid vs postpaid, guaranteed vs non-guaranteed, micro vs macro amount and business vs consumer payments. Such segmentations may provide a clearer view on what the world of payments has to offer, but they fail to provide insight into the key drivers of transactions: the behaviour of buyers and sellers. A better understanding of their behaviour provides the direction for optimising the use of existing payment services, improving existing services and developing new payment services. This paper introduces the concept of ‘transaction contexts’ in order to understand key determinants for the transactional behaviour of buyers and sellers, thus providing an all-encompassing framework for payment product development and management. This framework is applied to some practical examples.