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Expert opinion

Merchant Payments Ecosystem: business as usual? Part 2

Monday 3 April 2017 | 10:10 AM CET

Everybody loves to buy, no one likes to pay

Seven weeks ago, payment experts, thought leaders, solution providers and merchants headed to Berlin to connect with other payments enthusiasts during the 10th edition of the Merchant Payments Ecosystem (MPE) and discuss current industry developments.

Among the topics covered - the good, the bad and the RESTless APIs, the Internet of Things (and how in this context, everything will become a payment device), instant and open payments, big data and omnichannel, how to prepare (or panic, depending on the approach) for the 2018 PSD2 compliance deadline - to mention but a few. All these against the backdrop of industry and/or consumer expectations surrounding the payments process itself, which needs to be an invisible, hidden, seamless, frictionless and painless element. What a challenge, given the fact that “everybody loves to buy, but no one likes to pay” (Christian Bucheli, SIX Payment Services).

Payments and their cultural dimension

In spite of the fact that, when it comes to consumer expectations regarding payments, many attributes could still be added to the list above, throughout the discussions it was a more or less directly acknowledged fact that there is a very large gap between these consumer expectations versus the experience delivered today.

In this context, there is one important factor to keep in mind, which was also addressed by various speakers and moderators: payments remain a cultural thing, in spite of proposed measures or regulations to bridge standardisation and interoperability gaps across countries that still maintain strictly national markets in relation to payments. This is why:

• taxis still do not accept cards as a payment method in Berlin, while beggars in the Nordics invite you to contribute with donations via QR codes on their badges. And apparently, they are not the only ones:

Photo credits: Christopher Rae, VP of Global Operations @VerimatrixInc.

• historically speaking, The Netherlands has paved the way for merchant innovation as a result of regulation, according to Silvia Mensdorff-Pouilly, ACI Worldwide: "The Netherlands is a small country, but we`re big in trade (we got big in trade in the Golden Age). One of the things that enabled us to become great was actually regulation. Around the Netherlands there were lots of sovereigns and kings, and if it pleased the king, he would make a law on a whim and take all your money. Merchants were looked down upon, and trade was not something that was regarded. On the other hand, laws were made that protected money and goods and enabled merchants to innovate and collaborate and that meant that money all over Europe flowed into the Netherlands and built the great Golden Age."

• Sweden leads the race to become a cashless society, while India is one of the most cash-reliant countries.

The main point? You cannot force customer behaviour, you need to respect it. There are various practices people feel safe with: paying with cash, cards or alternative/ local payments. In the words of Felix June, Verifone, there will always be various communities of behaviour, but at the end of the day, the challenge for the industry is to anticipate those and enable them in a very productive way, instead of trying to impose future directions (regulation anyone?).

PSD2 - changing the business completely

Inevitably, PSD2 has also generated a great deal of reactions during the event, either on stage or during the networking breaks. The general feeling is that yes, this regulation will change this industry fundamentally and very soon:

“Business is changing completely, as we`re moving into a world where the Googles, the Facebooks, the Apples, the Alipays, Tencents have started to shape the business, where the PSD2 is going to open up the banking infrastructure to give them the ability to run the payments networks, where retailers can obtain payment institution licences”. In the future, “the interplay between regulation and the business models that we are used to will be critical to forming any strategic view of the payments business.” David Birch, Consult Hyperion

For other event takeaways, please check the video below (courtesy of Payvision)  or our previous article on the same topic.

MPE – business as usual?

It goes without saying that the success of an event is measured by many markers: the number of attendees, the relevance of the presentations and the range of topics addressed, key takeaways, networking opportunities, the number of smiles outweighing the frowns, great coffee etc. But what I find it particularly interesting and highly relevant about this event (and feel free to argue) is the following: the answer to the question “what makes an event successful?” lies especially in the audience experience and the series of post-event reactions via social media (which, in this case, is still strong after 45 days).

Topic-wise, there is new thinking in the payments space, generated by PSD2, however there are many pieces that still need to be put together. This is why “if this conference is still going to be here in another 10 years’ time, it will be a conference about completely different business” - David Birch.

About the author:
Adriana Screpnic is Editor-in-Chief at The Paypers. Adriana has been actively involved in covering online payments-related topics for nine years now, taking on diverse and challenging tasks ranging from news editing and market research to writing in-depth analyses and feature articles and becoming involved in large-scale, industry-specific research & contents creation projects.

 

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