AE Impact Story: Understanding Payment Trends

Aim of the Project

In Barbados, consumers can pay for goods and services using cash, debit cards, credit cards, cheques, or direct debits (automated payments) from their bank account or online services that link to their credit/debit cards. Our client wanted to understand why the use of certain payment methods was declining while others were increasing, as some of the popular payment methods were more time consuming and posed security challenges, and it, therefore, was not intuitive why they were so popular.

What we did

The payment market has four major players:

  1. Consumers – they determine which payment methods they prefer to use to conduct their business
  2. Merchants – they determine which payment methods they are going to accept within their companies
  3. Financial institutions – provide the various methods of payments to both consumers and merchants, and therefore partially influence what is available in the market
  4. Payment processing companies – provide and operate the platforms on which the payments are transacted; in Barbados these include both private companies and Government-operated clearinghouses.

Each of these players could be making strategic decisions that influence the use (or non-use) of the available payment methods. Background analysis ruled out the payment processing companies as potential influencers, as they had not changed any of their fees, rules or processes in the time period under investigation. To determine how the other three players could be contributing to the observed trends, we conducted a survey with consumers, a survey with merchants, and stakeholder interviews with financial institutions. The findings of all three exercises were analysed and collated into a summary report that highlighted the main factors that explained the changing use of payment methods. The results were then presented to both our client and some of their key external stakeholders.

Impact of Project

In light of the findings, our client revised their corporate strategy to better encourage the use of the payment methods they preferred, and developed a supporting marketing campaign. Their approach therefore spanned both marketing and product design, and early indicators suggest that their efforts have started to result in the market changes that they desire.