Are super-apps redefining commerce?
Are merchants really interested in payments?
What defines the ‘new era of retail’?
Will increased access to ‘plug and play’ card acceptance solutions among small and medium-sized merchants democratize payments?
And will globalized payment acceptance require merchant support of local payment methods?
These are just some of the questions discussed by delegates over three high-energy days at this year’s Merchant Payments Ecosystem (MPE) event in Berlin.
Designed to connect leaders, influencers and innovators from the entire payment industry, this year’s gathering provided powerful insights into the entire payments ecosystem, with merchants’ views strongly represented, 280 of them among the list of delegates.
Little did our team who attended realize that a coronavirus pandemic would make this the last such gathering for some months – just as well it was such a good one, packed with ideas and inspiration, which we’ve summarized below!
Innovation and trends in point of sale
Globally, we are at the beginning of a journey that is leading to an expansion of touchscreen device acceptance. This increase in adoption is currently being led mainly by merchants new to payments but is expected to eventually replace today’s point of sale (POS) and pin pad infrastructure.
The way we currently think of payment devices is fundamentally changing, as the market shifts to enable any devices to accept payments. Sam Shawki, CEO of mobile security start-up MagicCube, explained how its technology can turn any touchscreen into a payment device, while Risto Savolainen, CEO of payments software company iAxept, told how its app on android devices allows a contactless card to be used by turning the consumer’s phone into an acceptance device for card-not-present transactions.
France Leduc, meanwhile, is Head of Engineering and Operations at Mobeewave, whose groundbreaking platform allows any mobile app to accept in-person payments without additional hardware. He discussed at MPE his company’s recent experience of bringing its payment-on-screen solution to market, in cooperation with Samsung. In the same vein, William C. Nichols, vice-president and general manager, AEVI Americas, talked to Fintech Futures about how to become a software-driven acquirer, see here.
Netherlands-based financial news source Paypers highlighted at MPE the need for merchants and acquirers to evolve to meet the new age of mobile payments, with card transaction growth forecast to slow. According to Evelien Witlox, Head of ING global payments, the consumer is driving this change, with new technology the enabler: “It’s really a joint journey driven by consumers and then made possible by technology.”
Strategies for keeping up and getting ahead
Given the significant changes taking place in the marketplace for both acquirers and merchants, the view was aired that we must put merchant and shopper at the center of the payments ecosystem, a principle we agree with and indeed live by at AEVI.
Acquiring 2.0 is a concept still being defined, and the role of traditional independent sales organisations (ISOs) and acquirers is changing. Competition has been a main cause of margin squeeze. Andreas Habersetzer, Executive Director, EMEIA Financial Services for consultancy EY, reassured at MPE that there is still money to be made in merchant acquiring, but highlighted a shift.
If you haven’t read our blogs yet, we also talked recently about this move from being pure payment processor acquirers to merchant service providers, thus moving from hardware to software revenue-driven acquiring. This development comes with two main challenges.
- The first lies in educating the sales force so that they can have a different type of conversation with merchants – one that is focused on value-added services and how these will meet their needs as a business. It’s about inventory management, staff management, loyalty, etc., and payments is now low on the list.
- The second challenge is the packaging of these value-added solutions to remove complexity for merchants. One-size-fits-all approaches have frustrated those that value more tailored services. If you’re selling a solution, you need to understand each particular industry, what its typical problems are and how to solve them as part of a more consultative sale. Andreas Melan, Head of IKEA Group Payments, commented that: “Quite a few acquirers don’t know what to charge”.
At AEVI, we help merchant solution providers, merchant acquirers and ISOs to step into such next-gen acquiring and deliver bespoke solutions to their merchants, guiding them to understand their merchants’ markets – see our research on the beauty, retail, hospitality and services spheres.
Achieving cross-border payments
Speakers and delegates also stressed the increasing globalization of payments, and the fact that providers need to support companies in their quest for new markets. Andreas Melan, also talked about the reality of cross-border payments and the still long road ahead. The brutal reality is that this remains a very complex and challenging area for retailers – a bit like a headache desperately waiting for the paracetamol to kick in!
Global expansion requires knowledge of country specifics like regulation, the nature of competition and local payment methods. While an undoubted opportunity, this adds to the challenges faced by payment service providers (PSPs), whose cost base is increasing as a result of burgeoning regulation.
AEVI helps to deliver a consistent consumer payment experience across all countries and channels. Get in touch to see how our acquirer-agnostic platform can help you consolidate all your transactions into one gateway, giving you more control and a better overview. We recently published a research report on the merchant acquiring market in France, Italy and Spain, which you can read here.
All in all, then, huge amounts of inspiration at this year’s event. The world after COVID-19 may, of course, be different to what has been discussed, and this uncertainty makes it even more important for payments companies to be flexible and ready to adapt to oncoming changes. One thing that is certain, though, is that you can bet we’ll be signing up to attend the next one, post-COVID-19!