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Dear Reader,
I’m delighted to present to you our first annual State of the Industry Report (or, as our Insights team calls it, the “SOIR”!), produced in partnership with CMSPI’s Insights Advisory Council (IAC). The foundations of this report have been in place for several years now. We’ve long been of the view that the economics of the payments industry are truly unique, making them ripe for a deep dive. After all, which other industries out there exhibit huge barriers to entry while being fast growing, highly complex and two-sided with network effects galore? Additionally, while there are several excellent industry publications out there, the merchant perspective is often missing: the large majority of analysis comes from the industry itself. From these embers, the SOIR was born. The report is designed to be an educational hub for everyone, including both newcomers and the “payments geeks” of this world (of which I am shamelessly one). While there is a lot of information here, I think the SOIR’ s core narrative can be summarized very simply: the industry is highly concentrated and therefore effective regulation is essential to improving efficiency and productivity. Many different approaches to excessive market power have been tried by regulators globally, with varying levels of success. We are now in the fortunate position that we can look at what’s worked and what hasn’t worked. I’m hoping merchants, industry stakeh olders, and policymakers around the globe find this document enlightening, and my wish is that we can eventually use these learnings to agree on some core principles for payments industry oversight and intervention moving forward. I’d like to thank everyone involved in producing this report – from our fantastic Insights team to our thoughtful and deeply knowledgeable IAC members. Some true industry experts have built this report and I hope you enjoy reading it as much as we enjoyed putting it together. Kind regards,
Callum Godwin Chief Economist
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