Merchant Payments Ecosystem: business as usual? - Part 1

A few weeks ago, payment experts, thought leaders, solution providers and merchants headed to Berlin to connect with other payments enthusiasts at the Merchant Payments Ecosystem and discuss the current industry developments.

How are traditional card acquirers, banks, PSPs, ISOs and payment networks capitalizing on industry opportunities? Are they doing enough to help merchants create a more customer-centric experience, and increase loyalty & retention at the same time? How do they face regulatory challenges?

We were also there to get the industry pulse, hear the latest industry updates & expert insights in the field and get inspired for the year ahead. Here are some takeaways from event attendees and speakers:

Silvia-Mensdorff-Pouilly, ACI Worldwide:

2017 is the year of open payments; whether it’s Open APIs, open partnerships, or opening up choices for the customers. While there was a lot less blockchain-buzz than in previous years, probably because the industry realises that blockchain has other use cases first before payments, I was most interested in hearing more specifics on how payments players will enact their collaboration plans. There have been a lot of generic statements about the benefits of collaboration, but at this conference I heard a lot about how we can work together to enable a new fast and open payments ecosystem. I think my favourite point came from my friend Mark Ranta; when it comes to payments, how open is too open? Turns out customers don’t want entirely frictionless payments experiences - strong authentication, authorisation control and ID innovations will be the key in helping them maintain a sense of trust and control in a post-PSD2 world.

Wolfgang Berner, ACI Worldwide:

Of all the trends that are currently shaping – or re-shaping – payments, none is more significant than the rise of the Internet of Things (IoT). We often talk about the payments ‘ecosystem’ and the complexity that exists between its many participants, but the complexity will expand exponentially as millions – no, billions – of devices become internet capable in the next few years. This is going to create space for new forms of payment and new partnerships within the payments ecosystem, and MPE 2017 was a hotbed of discussion on exactly this topic. New players and incumbents alike, shared their thoughts on open payments, the effect of European regulations (such as PSD2), and mobile payment trends. One common thread that tied these, sometimes divergent threads, together was APIs. For the up-and-comers, as well as incumbents, the ability to harness and utilize open APIs (application programming interfaces) is seen as the key to unlocking innovation in 2017 and beyond.

Kaushik Sthankiya, DOCOMO Digital:

This year’s MPE was, as always, a highly productive, engaging and thought-provoking event. One key takeaway for me, amongst many, at MPE is the increasing shift of payments to a more “digital by default” methodology. An increasingly diverse commerce environment is providing consumers, merchants, brands and payment providers with unprecedented opportunities and choice in the way payments are made for goods and services. This is all taking place within a regulatory environment, which is becoming more and more liberalised, creating competition and also new opportunities.

The adoption of digital payments across multiple channels highlights the need for merchants and providers to operate at scale and ensure they interact safely, and securely to drive mobile commerce. The size of the opportunity for Direct Carrier Billing (DCB) alone, as Ovum predicts is USD 180 billion in revenue which mobile network operators can unlock by working together to break down barriers.

At DOCOMO Digital we enable a generation of mobile commerce ecosystem where our vision is to connect 5 billion people to our platform by 2020. We achieve this by leveraging our extensive experience from Japan and connecting network operators, merchants, regulators, financial institutions and our partners globally to enable a connected commerce life. DOCOMO Digital plays a key role to efficiently bring together ecosystem partners to safely and securely unlock new opportunities for consumers.

There were some fantastic use cases at the show in Berlin of how payments are more and more centered on enabling commerce on any connected device. I’m excited and also expecting to see a lot more payments-related innovation and frictionless commerce to emerge over the coming years.

Tsuyoshi Notani, JCB International (Europe) Ltd.

“Omnichannel” was one of the keywords among speakers and attendees this year. The merchants need to support every payment method: face to face and CNP, card and mobile, contact and contactless, global scheme and alternative scheme, as currently the consumer`s choice is globally diversified. What opportunity does the merchant face? It is a promised area for the merchant to capture the sales outside Europe. What is the challenge? It is how merchants can implement their payment system efficiently and reasonably. On this background, the PSPs and ACQs, which can enhance the global access for merchants, are strong positioning in merchant payment ecosystem world. I feel it was also reflected in the MPE Awards. JCB, as a global scheme brought from Asia, has confidence in the European market growth through the commerce connected with Asia and emerging market. I hope MPE is also getting connected with a more global area to encourage the payment market.

Cyril Dougier, MyBank:

MPE is traditionally an event focused on card challenges and innovations. But this year, as the PSD2 and Instant Payment regulations are looming, the topic of payment initiation, straight from the bank account, has been at the heart of many presentations and talks.

It may have been addressed as a regulatory matter or as a threat to the incumbent practices, but I would like to retain from the event, first and foremost, how, thanks to online credit transfers, the industry will be able to improve reliability and security of the payment chain or improve customer experience.

As demonstrated during the MyBank speech, presenting successful online credit transfer use cases, PSD2 and instant payment are a revolution, but a revolution creating a world of opportunities for the whole payment industry.