This document analyzes the remote payments market, including forecasts for growth in Italy and worldwide. It discusses major players and company positioning, noting it is still a fragmented market with no major public companies. The document evaluates four investment options for entering the remote payments market: making the product internally, buying a company, partnering, or taking an equity stake. It notes the pros and cons of each option and estimates their potential values based on modeling Italian market growth scenarios. The best option is determined to be partnering to gain sales channels and co-branding benefits while lowering investment and integration costs.

1. Remote payments
Market analysis and investment options for Corporate
April 2010
Analysis by: Davide Zari

2. Remote Payment - Market
Sentiment
Players
Market
Company positioning
Gartner, Forrester, Innopay etc forecast a growing market, also in Italy
Forecast period ranging from 1 year to 2-5 years
Growing news and market research since 2008, with a clear hype recovery
Still a fractioned market, with small medium specialized players (Paybox 12 $Mil), some veritcally integrated
No public traded specialized international player, early stage market
Really vertical solutionss or full mobile value chain coverage
Italy mob transactions
World mob transactions
Contactless nearer Company core competency vs remote payment
Possible new development in CRM and Risk management
0.01 Bil $
70 Bil $
Mobile payments news trend
Not an Italian market right now
Promising but uncertain growth rate
Payments
FVC
Cards
Contactless
Virtual
Remote
CRM
Risk management
Analysis by: Davide Zari

3. Remote Payment – Investment options
Option
Pro
Cons
Value €Mil (*)
MAKE
BUY
PARTNER
EQUITY PARTNER
Total control
Brand
Decreasing costs
Greater income
Bigger investment
Full market risk
> Time to market
Time to market
Sales channel
Lower investment
Lower income
Maintenance management
Brand
Integration costs
Time to market
Sales channel
Lower investment
Co branding
Lower income
Maintenance management
Integration costs
Time to market
Sales channel
Brand
Greater benefit from market growth
Up fron investment
Full equity risk
Know how difficult mapping
Integration costs
(*) Real option model over four analyzed options, italian market growth scenarios 10, 25 and 50% ytoy on 3y timeframe
Product development
License reselling
Revenue sharing
Equity participation
0,1
0,33
0,43
0,24
BEST OPTION
Analysis by: Davide Zari