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Expert opinion

Viva MRC Vegas! – Key highlights from this year's event

Friday 5 April 2019 | 08:33 AM CET

Once a year, MRC re-writes tradition and proves that what happens in Vegas actually becomes the driver for a full year of payments innovation

As members of MRC, we were happy to see another MRC Vegas event turn out so well. It was bigger than ever and provided a great opportunity to learn, catch up with many old industry friends, as well as make new ones.

What dominated the agenda

The use of PSD2/SCA will become mandatory as of the 14th of September 2019, applying to payments that are either entering or leaving the EU border. This means it will impact both US, non-EU, and EU card issuers and acquirers alike. Stakeholders had 18 months to prepare for SCA, however, there is no end-to-end understanding of SCA or how it works in reality. As Mark Beresford (Edgar Dunn) has written in his latest blog, there are some similarities between PSD2/SCA and Brexit. It is hard to be fully prepared and the implementation of PSD2/SCA can damage reputations as Brexit can potentially (and has partly done already) can do.

Another topic being discussed was the new Mastercard rule impacting the free trial subscription model (AKA negative option billing) for physical goods, a popular sales method in the US. As of the 12th of April, merchants will have to send their customers a message at the end of a free trial – either by email or by SMS – with information, including the transaction amount, payment date, and explicit instructions on how to cancel. Then, for every other payment related to the subscription in the future, the Merchant must send a receipt for the transaction. Charges appearing on the cardholder’s statement must include the merchant’s website URL or the phone number where the purchase was made. This new rule will both lower chargebacks and protect consumers, so it will be interesting to see if this best practice will be applied to digital goods as well.

On the topic of cross-border ecommerce, LATAM was one of the regions most addressed. According Philip Bock, CEO and Founder of Allpago, this market is expected to grow to 80 billion USD by the end of 2019. The three key markets are Brazil (42% share of LATAM total ecommerce market), Mexico (17%), and Argentina (12%). Offering local payments and understanding tax and regulations are key in these markets.

MRC Technology Awards

According to the 2018 H2 ThreatMetrix Cybercrime report, the volume of ecommerce bot attacks is growing rapidly year-after-year – fraudsters are harnessing the speed and convenience of automated bots to mass-test stolen identity credentials in order to perform successful account take-over. Other use cases are business logic abuse and fake account creation.

Not surprisingly, the two winners of the MRC Technology Awards, Cequence and Arkose Labs, operate in the space of bot attack protection. Cequence (category established) offers bot risk management. Cequence Security’s delivers automated software solutions to protect the web, mobile, and API application services that hyper-connected organizations rely on in order to support business processes and customer engagements.

The winner of the start-up category, Arkose Labs (backed by PayPal and USVP), developed a technology that prevents bots from creating or attacking accounts. The company offers a 100% Service Level Agreement (SLA) that includes a money-back guarantee for customers in the event their solution does not prevent an automated attack.

MRC CEO Paul Kuykendall and the Cequence Team, winners of the MRC Technology Awards

Payment companies to watch

At MRC we had the opportunity to speak with three innovative payments companies who support merchants selling internationally, while managing the complexity of having to integrate a multitude of payment service providers and different sets of payment methods. After this integration, merchants need to manage the complex payment stack and that creates challenges for the customers experience, operations, settlement, reconciliation, and reporting. And these players help them accomplish this.

Modo Payments developed Modo's /Checkout API. This solution provides merchants the flexibility to work with multiple payment service providers, networks, and payment methods and provide merchants with the ability to understand their total cost of payments on a transaction-by-transaction basis. The /Checkout dashboard gives merchants a single and comprehensive insight into their payments stack for the full lifecycle of a transaction, from initiation to settlement, and reconciliation with errors and chargebacks.

ProcessOut, a French startup, developed ProcessOut Telescope. This is a payment monitoring and smart routing solution. It helps merchants monitor and optimize their payment performance bydetecting and decreasing failed transactions, as well as reduce payment fees. They serve companies like Dashlane and Vente Privee.

Rapyd, a fintech-as-service start-up, has built a suite of services — currently numbering five: funds collection, funds pay-outs, currency transfers, ID verification, and card issuing. They apply a fixed pricing for payments: 3.5 percent plus 30 cents for funds in and USD 1.50 plus one percent in cases of currency exchange for funds out. Last month they launched Rapyd Checkout that enables merchants to accept cash, bank transfers, local cards, and e-wallets through 500+ locally preferred payment methods. They offer single settlement and reconciliation processes in one file with payments in 170 supported currencies.

In sum, MRC Vegas 2019 was a tremendous success, with engaging talks, ample conversations, and a vibrant atmosphere. This innovative space yielded productive insights into what trends will shape the payment space in the year to come, as well as the players that are entering the market or are developing within the market. As always, it has been an education.

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