Can You Accept Global Payment Standards?
I hadn’t expected the sport of fencing to feature at the recent nexo standards annual conference in Berlin. When François Mezzina of nexo member, Total, however, used the sport to explain to the international audience of schemes, merchants, processors, acquirers and other payment stakeholders why international standards for payments acceptance were so important, it all fell into place.
When competing in national tournaments, fencers use their mother tongue to punctuate their bouts: ready, fence! And so on. At international competitions, however, French is universally adopted – en guarde! – enabling all parties to exchange in the same way and thus compete equally. The verbal exchanges are so important to the sport that using a standardised form of communication is a necessity.
The same goes for global payment acceptance. A standardised way for all global stakeholders to exchange payment data is necessary if a truly international and harmonised payment infrastructure is to be created. This sentiment was echoed by Matthias Hönisch, Head of Cards Business Unit at the National Association of German Cooperative Banks, during his keynote presentation. When asked to explain what a payment is, Matthias summarized it well… ‘a payment, is a payment, is a payment’. What Matthias is saying here rings true to us all.
A payment means many things to many people. Today, a transaction can be accomplished with cash, cards, a mobile, online…the list goes on. Indeed, when we consider how many transactions are made globally using different currencies, devices and payment methods, the task of standardising the exchange of payment acceptance information seems intimidating. Yet the more options become available, the more we need a common baseline that can facilitate today’s global economy.
How to be omnipresent?
Commerce will change more in the next five years than it has done in the last 50, stated Jonathan Vaux, Executive Director of Innovation and Partnerships at Visa in his presentation to delegates.
He is right. Consumers are becoming increasingly empowered and influential in how, when and where payment transactions are made. For many, time is a currency more valuable than money itself. New generations are demanding more convenience from their shopping experience, to save them time. Today’s customer journey typically incorporates multiple channels such as a website, followed by a visit to a shop and then finishing off with a purchase made via an app. In such a diverse omnichannel landscape, merchants need to respond to consumer demands quickly if they are to ensure that they remain current and competitive in a fierce market for their attentions.
The omnichannel theme featured heavily throughout the day’s presentations. Olivier Nora, Vice President Operations, Southern Europe at Verifone questioned how can we maintain the richness of existing services and accelerate our development of the omnichannel approach.
His answer? Standards.
With a different way to pay in every country, myriad payment devices and domestic protocols to consider, the payment industry stakeholders that really want to deliver seamless, borderless and cost-effective omnichannel services must look to standards as the great facilitator.
Delegates were also treated to a deep dive into a payments success story – a partnership between three payment industry leaders, who, by using nexo’s payment acceptance messaging protocols and specifications, were able to create a powerful, cross-border payment platform for acceptance and acquiring, which today supports 35,000 live devices across Spain, France and Belgium.
During the session, Carrefour, Crédit Mutuel and Ingenico explained how today’s fragmented global payments acceptance infrastructure is hindering innovation in the payments world. ‘The sheer volume of domestic schemes and regulations is the biggest obstacle to overcome’, explained Frédéric Collardeau, Chief Operation Officer and Development manager at Market Pay (payment institution of Carrefour Group). For companies such as Carrefour, adhering to differing country regulations means working with new suppliers in each region. The result? Rocketing costs and big delays in getting to market.
The three companies explained how building their platform on nexo’s ISO 20022 messaging protocols enabled them to create a dedicated, standardised payments infrastructure that provides fast, interoperable and borderless card payments across multiple countries, saving money, accelerating product cycles and enabling more innovative services to reach consumers.
PSD2: Industry pain point or global opportunity?
No payments conference is complete without a discussion on the Revised Payment Services Directive (PSD2). It comes as no surprise that the PSD2 panel ‘Reinventing payments in the digital age’ was a lively affair.
Moderated by Alan Moss, Vice President of Product Marketing at Verifone, the panel session addressed a wide range of topics that will be front of mind for payment stakeholders across Europe and beyond. What does PSD2 actually mean? What problems is it trying to solve? Are the banks happy to make the updates that are required within the new directive? How does it help the merchants? In reality, does PSD2 present an opportunity or is it just another regulation headache? What was clear from the discussions is that for many, while PSD2 represents an opportunity, the resultant transformation is not happening quickly enough. The work done by associations such as nexo in standardising the landscape will help to facilitate global understanding and accelerate integration of regulations, including those set out by PSD2.
The thread that ties it all together
The thread that ties all of these elements together is the dire need for global standardisation. Jim Mortimer, Head of International Propositions at Vocalink (a Mastercard company) highlighted the challenge this need poses to banks that have been using the same proprietary standard for many years. It can be tough and expensive to migrate to a common standard. This is precisely why nexo exists. Our association is an international facilitator; its mission is to support all card payment acceptance stakeholders by establishing a standardised and universally beneficial way to apply ISO 20022, through a portfolio of implementation specifications and messaging protocols.
By collaborating with all stakeholder groups in the payment acceptance chain and likeminded associations such as the European Card Stakeholders Group, which is in charge of cards standardisation in the Single Euro Payments Area (as presented by Esteban Martin, Vice President, Industry Engagement with the European Market Development Unit at Mastercard), nexo is delivering greater efficiency, choice, flexibility and more opportunities for all stakeholders in the market.
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