Due Diligence of a Payment Gateway Platform
The client needed to determine whether a Payment Gateway Platform and associated proposed operational business model would be feasible and sustainable.
The overall objectives of the engagement was to conduct a technical and market due diligence investigation, as well as a market survey to determine the feasibility of the market penetration rates projected in key target customer constituencies.
The following key questions needed answering:
- Market size, competitive structure, competitive threats, key success factors, and barriers)
- Evaluation of the payment gateway platform in terms of its robustness, adequacy, functioning and the major risks and opportunities available in respect of the platform and business model being assessed
- Market positioning in relation to the target market’s decision making process.
- Sustainability of business model
- Market survey to determine feasibility of marketing penetration rates
- Uptake drivers and inhibitors
- Potential subscribers over the first 12 months and over 5 years of operation.
BMI-T used both primary and secondary research as part of the evaluation. The market study comprised of primary research of the consumer market. Interviews were conducted with consumers in metro areas, peri-urban and smaller urban areas. One of the key focus areas were to test the likeliness for the uptake of various payment applications and platforms. The survey results provided the client with a sense of what share of the customers’ spending they could hope to achieve, in the face of alternative payment methods.
Thereafter BMI-T conducted the due dilligence review of the buisness plan, inlcuding an evaluation of the competitive environment, technology platform, and regulatory constraints.
BMI-T was able to provide the client with an assessment of the technology platform and operational business model, enabling the funder to make a ‘go or no go’ decision on whether to participate in the project.