If you owned stock in major BPO companies in 2013, you’re happy, as most of them outperformed the S&P stock market. But you’re a really happy stockholder if you invested in payment transaction companies — those returns are almost twice as sweet as most of the other BPO stocks!
As a group, payment transaction providers’ performance was a spectacular success. Check out these awesome numbers:
- Eight payments companies’ growth rates ranged from 53-71%.
- 11 of 13 top BPO companies grew at 3-48% — and that’s in a strong year for BPO and with the stock market rebounding. (The two exceptions are WNS and Syntel; their stock appreciated the highest in the BPO market.)
How did the payments providers manage this outstanding performance?
The reason for the payments group’s dramatic growth is that these providers have what every BPO provider looks for — a transactional platform. The area where companies can create highly successful BPO platforms is the payments space. Providers can charge per transaction and do so in the as-a-service model that many customers want. The economies of scale in such platforms can be very lucrative; with more volume, the product becomes dramatically more profitable.
Although other BPO players invested significantly in trying to get to this transactional market, the fact is it’s difficult to build a platform or as-a-service model that truly works. Platform and as-a-service success requires an industry or a function that lends itself to the model. Attempts to do this in other areas to date have not been as successful or profitable as the payments space.
Are there other areas where the platform model could be as successful?