Would OBeP be iDEAL for the UK Market? A Guide for the Decision-Makers

by Zilvinas Bareisis, December 7, 2010

Abstract

eWise and VocaLink have announced a partnership to develop eWise payo, an Online Banking e-Payments (OBeP) solution, and they plan to launch it in the UK during 2011. This report explores the feasibility of such a solution in the UK.

The growth of e-commerce around the world has resulted in a proliferation of online payment methods. Cards remain the preferred online payment method in many countries; however, a number of markets around the world have adopted solutions which enable consumers to pay for goods and services online via their online banking facilities (e.g., iDEAL in the Netherlands).

In a new report, Would OBeP be iDEAL for the UK Market?, Celent explores the feasibility of OBeP in the UK, by first reviewing the market and then assessing OBeP using Celent’s proprietary framework to evaluate a new payment solution.

“OBeP can be a very attractive payment instrument for all major parties, including consumers, financial institutions and merchants,” says Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group and author of the report. “In the UK, given the dominance of cards and, increasingly, PayPal, financial institutions hold the key to the success of eWise payo. Their consumer and merchant relationships and willingness to invest in shifting consumer payment habits will be crucial in creating the necessary network effects.”

The report is intended for anyone interested in:

  • The UK e-commerce and payments markets
  • A taxonomy and examples of various OBeP solutions around the world
  • Celent's new proprietary framework to evaluate a new payments solution
  • Application of this framework to evaluate OBeP and eWise payo
  • Advice to UK financial institutions considering payo adoption

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Digital Britain

6

 

The UK Payments Market

10

 

Paying Online in the UK

13

 

What’s Next for Banks?

18

Introducing OBeP

20

OPeP in the UK: Introducing payo

26

New Payment Solution Evaluation Framework

29

Applying the Framework to Evaluate payo

34

 

Would UK Consumers Get payo?

34

 

Would UK Consumers Use payo?

35

 

Would UK Merchants Accept payo?

43

 

Would UK Financial Institutions Offer payo?

46

Conclusion and Recommendations for Decision-Makers

49

Leveraging Celent’s Expertise

51

 

Analyst Access

51

 

Support for Financial Institutions

51

 

Support for Vendors

51

Related Celent Research

53

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