EVO Payments International has recently acquired Sterling Payment Technologies, a North America / Europe card payment acquirer and processor. How does this acquisition fit into your business agenda of expansion for 2017?
EVO sees integrated payments as the future of card present commerce, and the recent acquisition of Sterling Payment Technologies significantly augments our capabilities in terms of product, technology and sales around the integrated payment channel. Ten years ago Sterling was one of the first to pursue this channel in the U.S.
We firmly believe the adoption of integrated payment solutions will accelerate in markets outside of the U.S. in the near to intermediate term. And through our EVO Snap* platform, EVO has the ability to rapidly export Sterling’s technology and products to all of the markets in which EVO operates.
What is EVO Payments’ current market reach and what industries are most attractive to your business case in terms of revenue?
In terms of geographic markets, EVO has the ability to process in 50 markets around the world and in over than 130 currencies. In terms of industries, EVO’s exposure is highly diversified across nearly all industries.
Relative to growth opportunities, we focus more on specific channels than industries. We are clearly focused on integrated payments and omni-channel solutions. We also see our geographic footprint as an ongoing opportunity to support multi-national merchants across multiple markets.
Speaking in terms of regulation for the EU space, PSD2 impact on payment businesses has been widely discussed. In this context, what is the main business opportunity that this respective initiative has brought over to you?
This aligns with our ISV investment and focus as the market opens up and PISPs develop through Europe over the next few years. We have adopted an agnostic approach to ISVs, dealers, PSPs and integrated solutions providers and other referral sources, including financial institutions, as the payments world continues to become differentiated. This simply endorses that strategy. The EBA guidelines of stronger authentication do, however, potentially alter the payments landscape and we are watching this space with interest.
PSD2 is likely to result in a proliferation of payment methods as many consumer-facing brands will take advantage of the new freedoms. Many of these will be local solutions to local problems and could well cause added confusion for merchants for little immediate benefit. We think merchants will look to their payment gateway partners to guide them through the complexity. This demonstrates the strategic importance to EVO of the Intelligent Payments Group (IPG) acquisition, which provides EVO an in-house gateway solution to offer to our European merchants.
A recently-issued research study predicts that around 3 billion people around the world will use digital banking services by 2021. How is EVO Payments International positioned to take advantage of this ‘in-the-making’ trend in global payments?
We continue to see a move to digital banking and associated payments with the growth in face-to-face, app-based digital solutions and substitution of card present to card not present payments. With our EVO Snap* solution, integrated with our own eCommerce gateway (following our recent acquisition of IPG) and our investment in ISV integrated solutions, we are well positioned to capitalize on this ongoing trend. Additionally, over the last 10 years we have invested in digital boarding and CRM solutions, which allows our partners and customers to access our services digitally and without the need for paper contracts – again responding to differentiated demand from our customers and partners.
What is the most important factor potentially determining the continued success of the card payments market (and which it should follow) to resist the menacing alternatives wave?
Card payments have always benefited from the ubiquitous nature of the major card brands. Consumers desire convenience and simplicity, and the global widespread acceptance of the major card brands means transacting in one country can be, in nearly all instances, identical to transacting in a completely different part of the world. Alternative payments tend to be specific to a given payments channel or geography. These limitations will always have an impact on the pace of adoption.
We don’t regard alternative payments as a menace. In many parts of the world, Germany, for example, most online transactions are conducted with methods other than cards and, while this brings complexity, we are well positioned to help our merchants accept electronic payments of any type. It’s true that there could be a long-term threat to cards from PSD2 if it sparks the reinvention or rejuvenation of national debit schemes, but we don’t see an appetite among European banks to go down this road. For the time being, Visa and MasterCard will not be threatened.
In addition, through European interchange pricing legislation, we are seeing a harmonisation of alternative payments pricing and international card payments, again supporting the continued growth of the ubiquitous international cards brands. Furthermore, the cost of accepting card payments in Europe has now fallen so far that there’s no real benefit for alternative payments trying to undercut Visa and MasterCard. To succeed, they will need to innovate on customer experience.
How do you see the payments market evolve by 2020 and the resulting trends that may emerge?
Consumers will continue to spend more money online rather than in a card present environment. Merchants will continue to want simple payments solutions that allow consumers to transact across all channels in a seamless manner. Card present transactions will be conducted through increasingly integrated payment solutions, in which payment acceptance seamlessly interacts with a merchant’s broader business software, simplifying business management and increasing productivity. These trends are global but will move at very different paces in different markets.
Which are your key takeaways from the Merchant Payments Ecosystem Conference, Berlin and how do you see these shaping the future of the payments ecosystem?
The digital agenda continues to grow, as does the legislative framework, which benefits the industry overall as measures to combat fraud still require focus and attention. There’s a recognition that to meet the fast changing needs of digital shoppers and merchants, acquirers/processors need to be both very large (to get economies of scale) and very agile (to innovate at the same pace as their customers). The needs of merchants that 10 years ago were very homogenous – everyone got the same terminal and was happy with that – are increasingly heterogeneous today. Each digital solution requires a payment service integrated with its own digital commerce platform(s) to support its own specific business processes.
In response, participants must continue to simplify and normalise integration into processing platforms, surrounding the core transaction processes with APIs accessible to communities of software developers with deep vertical domain expertise and with the ability to bring new features to market in much more frequent code releases. This is partly about technology but also will require a cultural shift within the organisations themselves.
EVO has already moved faster than most of its competitors in this direction.
We have the EVO Snap* API that gives our customers access to all our platforms globally. We have also built partner-focused sales and service teams in the U.S. and Europe that are actively building ecosystems of developers that can embed our services into their tightly targeted software products.
As an aside, there is a possibility that Visa and MasterCard are on the point of fixing 3DS with a combination of AI and biometrics. If true, this will have a big impact on fraud as well as a big impact on the proliferation of vendors of anti-fraud solutions.
About Nicole Mantow
Nicole is General Manager of EVO Payments International in Cologne and especially responsible for Sales, Product Management, Marketing & Communication as well as HR. After her university degree in business Nicole began her professional career in the telecommunication and in the consulting industry.
Prior to joining EVO in 2016 she held leading roles for many years at Concardis, being responsible for Sales and Marketing.
About EVO Payments International GmbH
EVO Payments International GmbH (‘EVO‘) is the European subsidiary of EVO Payments International LLC, headquartered in New York, US. As Principal Member of Visa and Mastercard, EVO offers international solutions for debit and credit card acceptance and transaction processing for physical points of sale, ecommerce and mail-order retailing, and ATMs. In addition to card acceptance, EVO provides a full suite of services including further non-cash payment methods, fraud prevention systems and other services which ensure easy, quick and secure handling of payments.
EVO’s payment solutions are supported by an experienced team of professionals and a best-in-class technology platform. EVO has become the exclusive provider of card acceptance solutions and Global Transaction Banking (‘GTB’) for leading financial institutions – including Deutsche Bank in Europe and Postbank – and has repeatedly earned recognition as “best acquirer for international merchants”.
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