Page 169 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

While the timing of when merchants receive their funds may vary by scheme, it would be advantageous if
each provider could settle into to a single wallet or account (MNO, bank, etc.). One key issue that payment
systems have to consider is what types of entities are, and are not allowed to handle and hold, settlement
funds, even temporarily.

2.1.12 Value Added Services

In many cases, the core payment services themselves may not be particularly profitable for the providers,
particularly for certain classes of merchants and/or transaction types. Merchant service providers, and even
the payment schemes themselves, may offer a variety of ancillary products and services to leverage their
merchant relationships. Examples of value added/ancillary services include merchant loans (often facilitated
by data generated by electronic transactions and the ability to tap into settlement flows for payment), POS
equipment sales and rentals, customer loyalty programs, data analytics, marketing services, as well as payroll
and other business services.

2.1.13 Analytics

In general, value-added analytics (versus simple reporting) can be performed by the merchant service providers
or by third parties otherwise ancillary to the merchant services value chain. Data mining/analytics is usually
an "offline" function that can take place after the actual transactions, and by specialists that just need access
to the transaction and other relevant data.

3 Merchant and Payment Acceptor Segmentation

The following is a segmentation scheme for merchants/payment acceptors in a developing marketplace. Some
of the segments represent poor merchants, others are larger enterprises. All of them serve poor consumers.

Note that all segments may have both face-to-face and remote commerce transactions; some will have prepaid,
post-paid, and/or "pay as you go" models. This is why "eCommerce" or "mobile commerce" is not called out
as a separate segment: rather it is a channel used by some merchants within each of the segments.

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