The Misaligned Opportunity in Payment

Key Takeaway

  • Retail payment technology is most talked about as it’s most visible. However retail payment has the least opportunity
  • The most opportunity is behind the scenes with B2B payment as it’s the largest sector of payment and the technology is the most behind.

Retail Payment

This is the area that has received the most coverage. Whether it’s C2C or B2C, the target audience are everyday individual users. As I have written in the past, we will not have 10 apps for finance, but more like 1 or 2. In the US, This sector of the market is not as fragmented as the B2B, and we are starting to see the effect of aggregation. The aggregation theory according to Ben Thompson:

Source: Aggregation Theory by Ben Thompson
Source: Aggregation in Payment from Fintech Rumination
Facial payment

Business payments


The merchant side of the B2C payment tries to answer the question of how do merchants accept payments? There are a number of parties involved, so I will use a graph to illustrate the landscape:

Typical credit card payment flow diagram. Source: Jas Shah

Current Trend:

The pandemic has jumped ahead the shift to e-commerce by 5 to 6 years in the US. Despite such shift, Fintechs are disrupting successfully in both online and offline payments.

E-Commerce Retail Sales as a % of Total Sales. Source: US Census Bureau


I see a number of opportunities in this sector:

  1. Payments getting cheaper, easier, and simpler for both offline and online transactions.
  2. The unbundle to rebundle of the payments markets: PaaS (Payment as a Service) -> FaaS (Fintech as a Service) -> Market place

B2B Payment

Last, there is the B2B payment, which is the largest sector of payment in terms of volume, currently ~$127 trillion worldwide, and expected to reach 5 times the B2C and retail market combined over the next decade. Yet the technology is the most behind in this sector. This is why this area has the most opportunity!

Source: Goldman Sachs


Though the shiny new tech in payments tends to be in the retail space, but the opportunities are actually behind the scenes in the B2B space. The focus in payments will likely stick with the retail sector, even after this article is published ><. I believe we will finally see more behavior change and disruption to the B2B market, partially thanks to the unfortunate pandemic.


  • Ben Thompson’s aggregation theory — LINK
  • Goldman Sachs’ B2B report — LINK
  • Amazonization in Retail Payment — LINK



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Ming-Chieh Lee

Ming-Chieh Lee


passion for #fintech #payments #RTP real time payment #Banking as a Service #digital strategy #blockchain