As any seasoned treasury or finance practitioner knows from experience, organizations dealing with numerous banking partners must account for a broad and constantly shifting range of protocols when it comes to processing payments. For instance, if a business has relationships with six or seven banks spread across the globe, it could easily be looking at 25-plus variants of payment formats. 

In a recent PaymentsJournal podcast, Jon Paquette, Executive Vice President of Solutions and Product Strategy at TIS (Treasury Intelligence Solutions), and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, discuss the best practices for dealing with multi-bank connectivity and payment processes.

The Challenges of Automation

Given the variances that occur across different banks and regions for financial messaging formats, remittance data fields, regulatory reporting standards, etc., dealing with multiple banks can become very complex for organizations to manage. And it’s not just the bank connections themselves that need to be managed, but also the systems that leverage those connections. According to Paquette, operators of ATMs or payroll systems up to TMS and ERP users would all benefit from using an efficient model that allows those systems to tap into a unified connectivity structure that enables straight-through process automation.

Of course, it will never be feasible for an organization to use just a single bank relationship globally. One reason (out of many) is for insuring against bank failures. “Corporates that have relationships with non-globally systemic important banks are multiplying their number of bank relationships for fear that their deposits may not be insured beyond the $250,000 level,” Bodine said. But as the number of bank partners and underlying accounts rises, “the ability to manage all these different portals, protocols, and interfaces becomes a major obstacle.” 

Bank connectivity drives a great deal of process automation within finance. Payments are a critical piece of the puzzle, but organizations also use inbound bank reporting to automate financial records and accounting entries. Treasury, for one, relies substantially on bank data as fuel for its cash forecasting and cash positioning functions. And without a unified connectivity strategy, it can be difficult to maintain visibility across each regional finance center or shared service center, as well as across various entities, business units, and bank groups. 

Breaking Down the Silos

Paquette points out that it’s difficult to maintain consistent controls without straight-through processing in place, to make sure that all the subsidiaries are executing payments in the same way. A lack of standardization can introduce extra risk to the payment process, which becomes a significant issue for some organizations as data management strategies take on greater importance. Without a holistic bank connectivity solution, banks often end up operating in data silos.

“If you have a multi-ERP technology structure, for instance, you’re likely using different systems in different regions, and you’re connecting your banks to those localized systems,” Paquette said. “You end up with data trapped inside localized silos that are driven by the systems in use across those regions. Having a more comprehensive connectivity strategy (i.e. all banks or ERPs feeding into or connected by a central system) helps to break down those data silos.” 

As companies are growing, trying to implement automated processes can result in extra confusion, a lack of control, and a lack of visibility. It can also become chaotic for finance to manage rapid growth as things change within the business – such as what is caused by multiple acquisitions of companies each with their own preexisting set of bank relationships and back-office systems. And without a definitive strategy in place, many companies focus on the big targets – such as the main cash management banks – but tend to overlook the outliers because they add too much complexity. 

“As a result,” Paquette said, “these partial implementations don’t serve the organization the way that they were intended to.” The end result is even more siloes and continued inconsistency with reporting and visibility.

Weighing In-House Solutions

When it comes to solving the above issues, some organizations focus on developing strong in-house resources to unify their banking landscape. If a company has a large and experienced IT team with ample bandwidth, this can definitely be accomplished. But there’s always a bit of a balancing act: Is it really worth IT’s time and effort to manage a project of this magnitude in-house, or is it more cost-and-time effective to hire an external resource and focus on something else internally? Often, internal strategies appear to be the better solution early on, but end up incurring huge IT maintenance costs – not just for initial development, but also for ongoing upkeep. Accounting for those internal costs makes the business case stronger for adopting a specialized, externally managed solution. 

“If you’re working with five to seven banks, there’s already enough complexity to start thinking about hiring a specialized provider for your connectivity strategy,” Paquette said. “It allows you to put in place a centralized connectivity hub where the provider is connecting your different bank relationships in a multi-protocol fashion.” That way, as your company expands to encompass potentially dozens of banks and hundreds or thousands of accounts, a strategy and solution is already in place to accommodate the growth.

“If you have a mix of protocols like API and host connections, all those can connect into that centralized hub,” Paquette continues. “That gives your business just one point of entry into their bank relationships. If you’re connecting ERP systems, payroll systems, and a TMS, one connection to that hub can give you access to your entire bank portfolio within each system, versus thinking about each individual connection and managing those back and forth. We find this to be a really effective strategy.” 

With a decentralized finance structure and regional shared service centers that operate autonomously, getting visibility into those processes can also be a challenge.

“The example I like to use is with the ISO 20022 protocol,” Bodine said. “There are now 60 different implementations of this so-called standard. That’s just one example of why you would not want to manage this in-house. Organizations simply don’t have the bandwidth to do this, in my estimation. You would want to partner with an organization like TIS that really knows what they’re doing here.”

Once a company has a connectivity hub in place, major simplifications can ensue. With a single payment instruction format sent into that hub, the software can conduct the transformations into the ISO variants and pick up all the geographic nuances. It also alleviates any strain on internal IT teams to constantly maintain and update those variants in-house.

Key Questions

Treasury, finance, and IT teams aiming to take their organization through a global payments transformation or banking process overhaul should ask themselves a few questions: 

• Is there a global process owner for payments? Today, many organizations are seeing their treasury teams serve as the global business owner of the payments process, driving how the business will make payments and putting scalable models in place to fuel growth. If no “global owner” exists, aligning on who the owner should be will help establish responsibility for creating a standardized and unified strategy to orchestrate them over time.

• Do you understand all the ways that your business makes payments? “Map all the different ways your business is making payments across treasury, AP, expense reimbursements, payroll tax payments, etc.,” Paquette said. “It needs to be a full mapping of how those payments are made, what systems are involved, what geographies are encompassed, and what existing controls are in place.” 

• Do you have consistent payment guidelines? If not, using an approval process that’s dictated down from the treasury level that can then be adopted within the business is a great strategy. This pays dividends when the organization can bring in standardized approval processes via automated workflows through a payment hub.

• Are there gaps in your visibility? “We speak with many businesses where treasury wants to achieve a greater view of what’s happening for control purposes or even just for cash management purposes,” Paquette said, “just to know what’s happening on a day-to-day basis.” Often, one of the best places to start is by examining bank connections.

The post Managing Multiple Bank Connections: A Primer for Payment Processors appeared first on PaymentsJournal.

As the U.S. banking industry moves toward embracing real-time payment systems, a recent survey underscores the importance of strategic planning, the challenges faced by legacy systems, and how collaborating with trusted partners can help organizations navigate this transformative journey.

This fourth annual survey from the U.S. Faster Payments Council, Glenbrook and Volante, a cloud payments modernization partner to financial businesses, asked the opinions of 427 market participants, 60% of whom work for a financial institution or a facilitator. This year’s survey recorded the highest level of satisfaction with the industry’s progress toward the adoption of faster payments. Across the industry, 51% of respondents—including 61% of financial institutions—say they are satisfied.

Implementing RTP^® and FedNow^®

The most significant development in real-time payments has been the introduction of FedNow in July 2023. That followed the launch of Nacha’s Same Day ACH in 2016 and The Clearing House RTP Network in 2017.

Among financial institutions, plans for these services are robust, with 88% of the survey respondents saying that they will implement FedNow and/or RTP within the next two years. RTP has been implemented more, with 61% of FIs saying that process is underway or complete. FedNow, less than a year old, has been or soon will be implemented by 44% of respondents. Only 12% of the FIs say they plan to wait more than three years to implement these payment services—or won’t implement them at all.

The survey also asked about future deployment strategies. For FedNow, 44% said they will support send and receive services initially, with 48% planning to add send services eventually. Only 8% said they will remain a receive-only organization. The figures are similar for RTP: 50% say they will support send and receive services initially, with another 34% adding send eventually. This leaves only 16% expecting to be a receive-only organization long term.

Reaching for Outside Help

For companies planning to use RTP and FedNow, 46% say they will connect to both via a third-party provider, compared with 32% who say they will connect to each system directly. The preference for working with third-party providers is understandable, as the integration and operations of these systems can be resource-intensive.

To help ease the barriers to adoption, many FIs have been turning to technology providers that focus on simplifying deployment and operations. Outsourcing the entire operation can also reduce overhead, allowing institutions to focus on innovation and opportunities to monetize faster payments. Other important considerations that respondents mentioned included software-as-a-service business models, providing scalability without extensive hardware upgrades and resilient disaster recovery services.

In addition to a faster time to market and lower operating costs, the survey respondents noted that they were interested in many of the value-added services that third-party providers can offer. Among them:

• Enabling proxy/alias (e.g., phone number) for payment initiation
• Confirmations sent to sender and receiver
• Enabling a QR code
• Recurring/automatic payments
• Appending additional remittance data

Changes Over Time

Over the four years the survey has been conducted, the top challenges with faster payments has changed little in the rankings. This year’s survey found that interoperability is considered to be “very important” by 71% and “somewhat important” by 21% of those surveyed. That total of 92% has been largely consistent over the four annual surveys.

On the other side of the coin, lack of ubiquity/interoperability continues to be the most common concern. Roughly 57% of financial institutions and business respondents mentioned it as an issue.

This is the only concern that earned such a strong consensus among these two groups. On other topics, the two groups had some severe disagreements. High upfront implementation costs were the second most common concern among bankers (59%), whereas only 33% of business respondents saw this as a top challenge. Similarly, 40% of financial institutions see “insufficient readiness to manage risks in a real-time environment” as a top concern, compared with only 10% of businesspeople.

Only 27% of respondents say they see an increase in fraud related to their faster-payments operations. Although that’s not a large number, it’s important to note that it has doubled from 13% in 2020.

There is overwhelming support for including dispute resolution as an inherent feature of faster payment systems (81%), similar to what’s done by credit card networks. This support has increased by 10 percentage points over the four years of the survey.

The survey also asked about cross-border payments. With regards to the RTP Network, 39% of the respondents say they are either using or plan to use its cross-border payment capabilities. Some 50% said they are unsure if they will use it, and only 11% said they will not use the feature. With FedNow, 77% said the system should offer cross-border faster payments.

Conclusions

The survey portrays an industry in the early stages of transitioning to a real-time operating environment, particularly for FedNow.

Real-time payments are quickly becoming a necessity for financial institutions to offer so they remain competitive.

The industry needs the freedom to evolve its existing systems and operations through innovation that can complete the transition to a new level of service and a new way of imagining the payments business. Along the way, trusted partners can provide the support and insights to clarify strategy and support complex transitions.

Download Volante’s U.S. Faster Payments: The state of the nation report to learn more about the evolving landscape of faster payments.

The post Payments Processing Survey Shows Progress for  FedNow, RTP appeared first on PaymentsJournal.

Bank connectivity and payment processes are critical operations for any business. With the introduction of multiple banking relationships, payment processes have become increasingly complex, requiring more internal knowledge and even external expertise.

In a recent PaymentsJournal webinar, Jonathan Paquette, Senior Vice President of Solutions in the Americas at TIS (Treasury Intelligence Solutions), and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, delve into the most common hindrances to bank connectivity and payment strategies, the consequences of not optimizing bank connectivity and payment management on a global scale, and key strategies in implementing bank connectivity and payments effectively.

Common Challenges to the Implementation of Efficient Bank Connectivity and Payment Strategies

According to Paquette, companies typically have multiple bank relationships. Each bank has its own protocols, payment methods, and formats. Bringing all of these elements together under one single and unified connectivity strategy poses a significant challenge. To address these connectivity protocols, organizations have resorted to using outside resources or relying on their internal knowledge base to manage all of these elements.

Another issue is the complexity of systems. The implementation of global bank connectivity and payment processes requires them to be integrated into a back-end system.

“A lot of companies are multi-ERP,” Paquette said. “I think at the minimum a company is going to have an ERP system, likely a TMS. Also, a payroll application, and each one of those systems is going to need to leverage that communication to the bank or have their own independent communication channel to the bank, too. So that’s a big consideration for a lot of companies.”

Paquette added that a designated person who is well-versed in these matters will be best suited to put connectivity strategies into place.

Lack of internal knowledge is another issue organizations face. It becomes increasingly complex to maintain different formats and the various connectivity protocols among the vast number of banking relationships. The revolving door of banking relationships and the IT bandwidth required to support those changes add more complexity to the process.

“And I’ve been very outspoken with our large corporate clients about the need to have external expertise because I’m finding that even some of the largest corporations in the world don’t have the resources to do this type of thing,” Bodine said. “And it is just a bear to manage all this.”

The Consequences of Not Implementing Connectivity Processes Fully

It is not recommended that organizations attempt to implement connectivity processes in a partial or fragmented way. Doing so could lead to a host of problems. Paquette has seen this firsthand, revealing that route inevitably leads to a partial automation of the process. Cash management banks might process 60% to 70% of their transactions via bank connectivity and payments and decide that this requires a tremendous amount of work, thereby ending it there. However, the remaining 30% to 40% still needs to be processed manually. This introduces the possibility of human error as well as security risks.

There is also the question of data aggregation and analysis. Many times, the data is siloed into different sources.

“If some things are flowing from the ERP straight through processing and others are going through an e-banking portal or some other system, right then you’re suddenly finding yourself with all these sort of data silos,” Paquette said. “No way to bring all these data points together for analysis purposes and to make your business better.

“So, all the usual ones, excessive costs, the maintenance and the upkeep of multiple different processes come into the fold as well.”

Said Bodine: “I was writing recently about the costs and the downsides associated with halfway strategies, as I like to call them, and people sort of do the bare minimum and then they forget about it. But they’re not focused on continuous improvement like a full API first strategy or ISO standards to the extent that they are standards, but those are super important.”

Key Strategies for Optimizing Connectivity

The solutions to enhancing the implementation of connectivity will greatly depend on the level of complexity within the business. For example, if it is a treasury operation with one or two banking relationships, then one or two systems would be recommended to connect with. It can potentially be managed in-house as well.

“If you do have resources that are really knowledgeable about this or maybe just the opportunity to bring in some process redesign consultants or bank connectivity experts who can help you get everything connected up through whatever method you might have,” Paquette said.

“Maybe your ERP has a connector and can centralize all this information in.”

For companies that have more than 100 bank relationships worldwide, outsourcing is recommended for this task. With that many banking relationships, it’s inevitable that inconsistencies will be high. Maintaining different formats daily to execute transactions will be a daunting task. Many of these strategies can be reined in by using a connectivity hub where most tasks would be managed by a specialist in a unified place.

TIS Helps Companies Understand Their Payments Process

Paquette noted  that it’s vital for companies to understand the way they make payments. It is important that organizations get familiar with how their ERPs send files to the banks, know the inventory of all the e-banking portals available, and be familiar with the manual payment processes that are occurring.

One recommendation he makes to clients is to map out all of these variables. Businesses must process payments in an efficient, secure, and cost-effective manner. Finally, once all of these details are mapped out, organizations must determine what knowledge base they possess internally. If they are missing elements of that knowledge base, the next step is to seek external expertise.

The post Bank Connectivity and Payment Processes Must Follow Best Practice Protocols appeared first on PaymentsJournal.

Despite technology’s move to the cloud over the past decade, many payment processors still use old, outdated platforms that are inflexible and costly. 

Payment processing companies such as PayiQ, a division of Quisitive, are creating new payment processing platforms that use cloud technology. These systems provide everything traditional payment services do but also leverage cloud-based architetcture to make transactions faster, more secure, and automated.  

During a recent PaymentsJournal podcast, Dan Devlin, Senior Vice President of Solutions & Strategy at PayiQ, Tom Byrnes, Senior Vice President of Marketing at PayiQ, and Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research, discussed the many benefits of cloud-enabled payments processing and how it better positions specific industries, including retail and food service, amid economic and demographic headwinds. 

What is Cloud-Enabled Payments Processing? 

Cloud-enabled payment processing has two main components. The first is processing payments quickly and reliably. Cloud technology helps with this by spreading servers out across multiple locations, so if there’s an issue in one geographic area, the system can still work without disruption. This also helps with response time because there are multiple routes that can be optimized in real time for the transaction data to travel.  

Cloud architecture is designed with the latest security protocols in mind, which help protect it from threats such as hacking and data breaches. In PayiQ’s architecture, its cloud-enabled platform also acts as an integrated order processor in addition to handling payments. This means the platform allows merchants to consolidate both payment and order information in one place, creating a single lens into both transaction and individual order data that makes it easier and more efficient for them to run their businesses. 

“In the past, if a merchant wanted a report of their transactions, it would be a time-consuming and custom project,” Devlin said. “Traditional payment processors had to create a special report to get access to that data, and downloading those reports was a difficult, frustrating, and often expensive process for merchants.”  

With modern cloud-enabled technology, accessing and downloading such reports is both much easier and faster. This is especially true for public clouds such as Azure, which can enable merchants to get reports far more quickly and efficiently. 

Using Data as a Value-Added Product 

Payment processing technology is generally based on pre-Internet technology stacks that are just starting to move into the information age. This can be seen most clearly in the operations of independent sales organizations (ISOs), which are specialized third-party companies that partner with credit card processors and acquiring banks to sell payment processing services to merchants.  

ISOs have been slow to adopt new technologies—the industry has traditionally relied on paper-based processes, such as filling out applications and contracts, and using Excel spreadsheets for record-keeping.  

PayiQ recently commissioned an independent national survey of ISOs and found that the process of getting new merchants on board—vital for this sector—is slow and expensive, often requiring a lot of people. 

“For most ISOs, the average onboarding process alone takes three people, as much as three to 11 days, and anywhere from hundreds to thousands in overhead,” Byrnes said. “While every account is different, the longer boarding times can be attributed to incomplete applications, higher risk profiles, or issues that emerge during the underwriting process.”

To help improve this situation, PayiQ has designed a platform that can support a suite of automated tools that make the onboarding process, chargebacks, and residual management fully digital, faster, and less expensive. What’s more important, the platform allows merchants to see the behaviors and product preferences of every customer that pays with a card across all channels, including in-store transactions. This data can help merchants personalize their communication with customers to better align with their business goals and objectives. 

“Because we sit in the payment flow, when somebody pays for something, our platform sees whether that card has ever been presented in our system before,” Byrnes said. ‘If not, we grab it, do a mathematically secure one-way hash (cryptographic encryption), secure the card as an identifier in a cloud, and then pin all the transaction and order data to that card to create an individual-yet-anonymous profile for each customer.”  

Value-Added Products in Payments Processing 

The phrase “omnichannel payments” has become a buzzword, but most of the companies claiming to do it are not living up to the hype. 

What helps PayiQ be omnichannel, as opposed to other payments processors, is that it tracks payments and orders not just in digital or mobile channels but also across brick-and-mortar locations. The company provides real-time tracking of behaviors and purchase preferences of all card-paying customers across every channel, including online and offline, even for orders that are placed online but are for in-store pickup.  

“Despite the rush to online buying that we all made during the pandemic, roughly 86% of all goods and services are still sold in a brick-and-mortar location,” Byrnes said. “That is a massive blind spot for the current crop of “omnichannel” tracking systems that really only focus on digital transactions. With PayiQ, you can see online and offline in real time, even if an order comes in online for pickup, which is increasingly common now.” 

Data Security is Critical

In today’s economy, processing payments is table stakes and PayiQ believes that innovation comes from  creating value-added products that harness the data from those transactions and makes it actionable. 

While the company offers data capture and analytics as a value-added product by providing a single view of the behavior of previously anonymous customerss across online and offline channels, security features are just as important. 

Cloud-enabled processing is secure because the system is designed to allow access only through payment transactions with specific credentials. At PayiQ, the sensitive payment data is instantly tokenized, or encrypted, to make it unusable to hackers. Merchants can access the data in a secure-but-anonymous form that doesn’t reveal sensitive customer or payment information.

“Handling changes in regulations is extremely important because they’re changing so rapidly,” Keyes said. “Data needs to be taken care of very carefully, and it’s difficult for merchants to do because they’re busy selling stuff. Having support with handling regulations can really help businesses thrive.” 

Value-Added Benefits for Merchants 

Having a cloud-enabled payments processor also carries additional industry-specific benefits, particularly for the retail and restaurant sectors. To understand these benefits, it’s first important to know that these industries are going through two seismic shifts.

The first is that the pandemic has changed how consumers shop. Many have turned to digital channels for their everyday needs, making it hard for businesses to make personal connections with their customers.  

“What I’ve seen is an explosion of what is known as the unattended space,” Byrnes said. “On a recent trip to Southern California, I saw automated kiosks selling sandwiches at the airport and a toiletries kiosk at my hotel. Also, the third-party delivery services for meals or shopping that have become so common keep the personal customer data and order information. That’s a domain that has always been with the merchant.” 

In both cases Byrnes cited, the customer is at an extra level of removal from the merchant. “That impacts their ability to engage and develop a meaningful, long-term relationship with that customer,” Byrnes said. “In the case of even a delivery system, the delivery company keeps the personal data, the order data, (and) not the restaurant—and that’s a huge problem for them because it reduces the frequency of direct touches or engagement with a brand that is critical to providing the kind of customer experience that builds lasting loyalty.” 

The second big shift lies in demographics. In the 2020s, the population movement will be profound. Baby Boomers are a large generation that is now retiring from the workforce in huge numbers.  It is being replaced by smaller generations, and that’s resulting in fewer workers to go around, according to Byrnes. What’s more, Millennials are not like their parents were. They are more technologically sophisticated, educated, and brand-centric, plus they are aware of the value of their personal information “All of a sudden, you’ve got merchants struggling to find employees and new ways of connecting with their customers to deliver a consistent brand experience. To fill the that gap, they are starting to put more technology between them and their customers,” he said. 

Ultimately, merchants are trying to navigate these changes while maintaining a strong connection with their customers. As demographic trends continue to change, new technologies  will likely be doing the same amount of work with fewer people. An advanced cloud-enabled payment processor designed to deliver customer insights with advanced security can help merchants move in that direction. 

The post Cloud-Enabled Payments Processing Helps with Demographic Headwinds  appeared first on PaymentsJournal.

Every business has a certain number of necessary friction points—such as requesting billing and shipping details—when it comes to payments. But too much friction can drive even the most patient customers away.

In its “Friction – Friend or Foe?” ebook, Ekata looks at how merchants can optimize the friction they apply in their payment processing and strike the right balance between preventing fraud and valuing the customer experience.

Types of Friction

Friction is essential in the customer experience journey. It slows down the process, helping merchants ensure that a transaction is safe and secure. Deciding on a friction strategy is equal parts science and art. Friction can be introduced anywhere in the transaction process—during the account sign-ups, when a credit card is added, or when the customer selects a shipping address. But according to Ekata, “the strategic differentiator when it comes to preventing fraud without creating undue friction is identity verification.”

Whenever possible, companies have customers set up an account so their identity can be verified. This can involve strong authentication measures, such as multifactor authentication, which requires customers to provide multiple pieces of evidence to verify their identity, including a password and a one-time code sent to their phone. Strong authentication can help reduce fraud by making it more difficult for hackers to gain access to accounts or steal sensitive information.

Identity verification doesn’t need to be the same for all customers. In fact, according to Ekata, “the merchant who rises to the challenge—protecting themselves and their consumer, whilst ensuring a fast and easy transaction—is the merchant who deploys a comprehensive, layered identity verification solution; one that boasts an array of dynamic, intelligent ‘step up’ escalation methods. By applying the ‘right friction’ when needed, faster payments can be facilitated while fraud is deterred.”

Right friction is arrived at by doing risk-based authentication, which adjusts the level of authentication required based on the perceived risk in the transaction. For example, if a customer is making a large or unusual purchase, the payment system may require additional authentication steps to ensure the legitimacy of the transaction. Customers who have shopped with a merchant before or are less risky based on their information may skate through with minimal friction, while riskier customers are asked to jump through more verification hoops.

Guest Checkout: A Necessary Risk

Customers who don’t want to go through the effort of signing up for an account with a merchant tend to go through the guest checkout process. Guest checkout, however, does come with its own risks. In fact, identity verification is not as easy, and chargebacks are more difficult to identify as fraudulent. According to Ekata, a retailer can ship a purchase to an address that was provided during guest checkout, then a few weeks later see a chargeback for that very purchase, with a consumer’s claim that nothing arrived. The merchant, in this case, loses revenue. Depending on the cost of the item—and the frequency with which this occurs—chargebacks from guest checkout purchases may end up being costly for merchants.

That said, there’s also a risk involved in not letting through customers who want to use guest checkout, along with the potential loss of revenue from declining those customers.

The best solution for guest checkout is verifying the customer’s information without concluding whether the information is actually associated with the customer, according to Ekata.

Eliminating Unnecessary Friction

While the above-mentioned types of friction are important in preventing fraud, other types are not. Some user interfaces are clunky, unclear, and frustrating to work with. Reducing such friction can involve designing a user-friendly interface, providing clear instructions, and minimizing the number of steps required to complete a payment. By streamlining the payments process, businesses can reduce customer frustration and increase the chances that a transaction will be completed.

Minimizing unnecessary friction can be as simple as identifying friction that isn’t absolutely necessary and removing it. An example might be double-checking an address and sending an email validation link.

It’s also helpful to invest in a faster processing bank or payments system, which automates authentication tools. According to Ekata, “this might be moving away from manual review processes for all transactions and adding faster, automated solutions that speed up good transactions and add friction to potentially bad ones.”

One last approach is giving customers who see their payments rejected a last chance. “This could mean training a team of skilled agents to make account remediation calls, allowing users to transact in a monitoring state that restricts their access to your product; or using third-party data providers for document verification, biometric analysis, or linkage-based data verification,” Ekata noted in its ebook.

Conclusion

There are several ways to maximize friction in payments to reduce fraud and optimize the customer experience. These include implementing strong authentication measures, using risk-based authentication, designing an easy-to-use payment process, and ensuring that payment systems are secure and up to date. Businesses can do this in-house, but it may be easier to farm such functions out to a third-party company.

Ekata’s Identity Engine can validate the legitimacy of customers’ information (name, email, phone, IP, physical address) and determine how those data points appear in other digital interactions. Using the Identity Engine, the Ekata Transaction Risk API generates validity markers and identity scores, which help merchants do risk-based authentication.

The post Too Much Payments Friction Can Lead to Customer Chafing appeared first on PaymentsJournal.

In a world of instant payments and high consumer expectations, businesses need to process and resolve payments as quickly as possible. That’s why Dojo, a UK-based payments technology provider that works with more than 50,000 businesses globally, sought to provide payments processing services to its business clients that would be faster than the existing industry average.

To do so, Dojo required a co-location and digital infrastructure platform partner that could provide the security and fast interconnection required for a scalable, high-performance, multi-cloud environment. This infrastructure would need to access services on Oracle Cloud, Amazon Web Services (AWS), and Google Cloud, and securely connect this physical infrastructure to Dojo’s cloud-based applications.

In this recently published case study, Dojo described the process of partnering with digital infrastructure company Equinix to connect with all these different platforms and create an infrastructure that enabled Dojo to deliver best-in-class payments processing speed to its business clients.

Creating a Multi-Cloud Strategy

In order to meet the increased demands of the businesses it works with, Dojo needed to create a multi-cloud strategy for its digital payments processing platform. This required both hosting physical, on-site entry points for various payment networks such as Visa and Mastercard, as well as point-to-point encryption devices and hardware security modules (HSM) for processing security operations based on digital payment regulations.

Dojo processes payments from a vast network of 70,000 card machines and, thus, required secure, instant communication between its hosted cloud providers and its on-site hardware. As such, the company contracted with Equinix to build a hybrid multicloud infrastructure. Dojo deployed systems in two Equinix data centers, where it could securely operate its physical devices and have speedy access to all the applications stored in the public cloud.

From there, Equinix’ Fabric software enabled Dojo to connect on-site applications to secure cloud on-ramps with high-speed, single-digit latency in order to accelerate customer payments processing. Equinix further provided direct, dedicated carrier-grade network links that connected the two data centers.

Dojo also used the Network Edge software service from Equinix so it could expedite the deployment of Cisco CSR 1000V virtual routers in both the London and Frankfurt data centers to speed and scale connectivity to the public clouds virtually and without additional hardware.

Dojo’s front-end credit card payment services then became accessible to customers via AWS and Google Cloud, which connect to the company’s payment network switch and clearing processes on Oracle Cloud via Equinix Fabric with Oracle Cloud Infrastructure (OCI) FastConnect.

Faster, More Reliable Payment Service Delivery

Dojo’s partnership with Equinix enabled the company to deliver faster, more reliable, and more secure payments processing capabilities to its customers. By creating a high-performance, scalable digital infrastructure, Dojo was able to attract larger business clients, including those that process tens of thousands of payments daily. Dojo was able to serve these new clients without any lag in speed or performance, providing them with a seamless payments processing experience. Such scalability is vital for Dojo to expand its client base.

Furthermore, Dojo can scale its services as needed due to the high-speed connection between the Equinix data centers in London and Frankfurt and Oracle Cloud, AWS, and Google Cloud. This enables Dojo to conceivably serve any business of any size – no matter how large – effectively with quick payment processing services. This infrastructure also can power Dojo’s expansion globally and serve businesses in any number of geographies, since Equinix operates data centers in more than 240 locations around the globe.

As an environmentally conscious company, Dojo also prioritizes sustainability and renewable energy sources. Equinix also shares the same commitment and uses 100% clean and renewable energy to power its global platform, making it not only an optimal strategic business partner to Dojo, but a partner that shares the same ideals as well.

“Equinix is the Rolls-Royce of data centers and digital infrastructure platforms. It provides our customers and us with the reliability, security, and performance we require to accelerate and scale our payment services internationally to stay ahead of the competition,” explained Nick Fryer, Chief Technology Officer at Dojo. ““The connectivity between Oracle Cloud, AWS, and Google Cloud is crazy fast.”

Equinix (Nasdaq: EQIX)  is the world’s digital infrastructure company™. Digital leaders harness Equinix’s trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.

The post Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing appeared first on PaymentsJournal.

Mobile payments are becoming increasingly popular on college campuses. Not only do they offer a convenient way to order food and pay for delivery, but they can also be used to make dining hall reservations and take advantage of loyalty and rewards programs. In addition, mobile payments can help to reduce the risk of fraud and theft. When used properly, mobile payments can provide a secure and convenient way to make purchases on campus. Where does Hangry come in?

Transact Campus acquired Canadian startup Hangry in a move to strengthen their portfolio of services providing transactional services in campus environments. The acquisition brings Hangry’s services already provided through a partnership in-house as detailed in the news release:

“The Hangry platform is built to serve the specific needs of the campus ecosystem and is fully integrated with the Transact platform. To date, Transact has processed 24 million mobile order transactions totaling over $200 million using the Hangry solution. The mobile-first platform delivers a robust application that is custom-branded for schools.”

Hangry brings additional services such as loyalty and rewards as well as other advances that Transact can add into their student-focused portfolio that seeks to take advantage of technology that students are accustomed to using:

“’We are excited to welcome the talented Hangry team and to combine their innovative R&D culture with the continued successes of our Campus Commerce solutions at Transact,” said Nancy Langer, CEO at Transact. “The acquisition will enable us to build on Hangry features and functionality as well as incorporating them into the wide array of Transact solutions that already provide a leading mobile-centric experience for millions of students.’”

Hangry’s services have been offered through partnership to Transact customers, which provides the opportunity to integrate those services into Transact’s permanent portfolio in an accelerated fashion and for those already working through the partnership to continue utilization without interruption.

Overview by Jordan Hirschfield, Director, Prepaid Advisory Service at Mercator Advisory Group

The post Transact Campus Acquires Canadian Startup Hangry appeared first on PaymentsJournal.

Payment processing is an essential part of any business. Forward-thinking merchants are pursuing omnichannel experiences that will yield the highest number of conversions in the most efficient way. However, many merchants still rely on legacy payment processors. Software developers need to create the next generation of modern and agile payments processing technology to help merchants achieve their goals. 

To learn more about why choosing an agile fintech payment processing partner is good for both merchants and software integrators, PaymentsJournal sat down with John Buchanan, Senior Vice President of Sales at AFS, and Don Apgar, Director of Merchant Services Advisory Practice at Mercator Advisory Group. 

Modern software is difficult to integrate with legacy processing 

One problem with legacy payment processors is their incompatibility with modern technology. “Legacy systems are often built with the original concept of payment processing in mind,” explained Buchanan. “We’re talking about any industry that has been around since the ‘60s and ‘70s.” Legacy platforms are often disjointed and extremely limited. Even with the onset of EMV chips, legacy platforms still relied on “dumb” terminals – plastic machines with rubber keys. 

These days, customers have variable preferences for how and where they want to pay: curbside, in-line, at the table, etc. “Today’s solution must be omnichannel,” Buchanan continued. “Software developers need to build technology that enables merchants to meet their consumers where they are ready to transact.”  

Unfortunately, the term “omnichannel” is sometimes misrepresented as simply having multiple payment processors. But if the various channels do not communicate with one another and consolidate payment data, those extra features will not add enough benefit to justify their inclusion. “You’ve got to make sure that it’s not just a legacy platform with a bunch of flashy collateral,” said Apgar. “It’s got to be built for a purpose.” 

How to determine if a software provider partnership will work 

For merchants hoping to partner with a new software provider, Buchanan listed several questions to ask to ensure an optimal choice: 

• What will the merchant’s experience look like?
  • What is the onboarding process? 
  • Do you get instant API credentials? 
• Can you leverage existing hardware options to avoid PCI compliance issues? 
• What additional payments functionality will you get?
  • Split payments? 
  • Recurring billing? 
  • Inventory management control? 
  • Profitability reporting? 
  • Mobile wallet acceptance? 
  • Tokenization? 
• Will the software link to a development portal with API documentation? 

No matter what, software developers will need a direct line of communication to work through all the needs of their customers and their software. “A hands-on approach from an implementation perspective is equally as important as making sure that you are leveraging the right functionality and that you are building it in the most efficient way,” explained Buchanan. 

Apgar further elaborated: “The biggest mistake that we’ve seen is that software developers will do a use-case analysis and say, ‘Okay, well, not everybody needs everything.’” Essentially, developers do not design their systems against potential future needs. “Even if you don’t need the feature, it’s important to make sure you connect to a platform that offers it, because you never know what tomorrow is going to bring,” Apgar continued. 

The possibilities of an agile fintech payments processing partner 

Payments processing is always going to be important, and upgrading payments processing systems is ultimately in any merchant’s best interest. Whether a merchant wants to monetize their payments or offer more pricing options, it is all about moving money. “It’s going to be inevitable that you’re going to have to ‘rip and replace’ a bit when considering the merchant’s perspective from the payment processing side,” noted Buchanan.  

Merchants may feel hesitant to make such a wholesale shift because of the friction it will temporarily cause. “There is never a good time to rip and replace,” Apgar clarified. “But the longer you wait, the harder it gets, and at some point, you have no choice but to throw in the towel and start over because you just can’t iterate your platform anymore to add new features.” 

Fortunately, specialized payments partners like Agile Financial Systems (AFS) can help. “Agility is the cornerstone of everything that we do [at AFS],” said Buchanan. “We built the APEX platform with an emphasis on our ability to remain agile, creating custom solutions for merchants across a multitude of demographics.” The APEX platform offers innovative financial solutions that fit the payments landscape of today and tomorrow, providing efficiency and improved payments experience across the board. 

“Customers are shopping in more ways than they ever have before,” Buchanan concluded. “It is critical that merchants are meeting their customers at their preferred point of purchase, without sacrificing efficiencies, customer experience, customer conversion rates, or other merchant processes in general. When customers are ready to buy, our merchants need to be there to meet them.” 

The post Why Partnering with an Agile Payment Processor Is the Smart Move  appeared first on PaymentsJournal.

There are many different card processors out there, each competing for merchants’ business. While it’s important to consider things like fees and transaction rates, it’s also important to choose a provider that offers excellent customer service. After all, if something goes wrong with a transaction, you’ll want to be able to talk to someone who can help you resolve the issue quickly and efficiently. And if you ever have any questions about how to use the system, you’ll want a customer service representative who is patient and knowledgeable.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Report: Smart Point-of-Sale Terminals: A Rapid Transformation of Payments Acceptance

Reasons U.S. Small Businesses Choose Primary Card Processors

• 39% of companies chose a primary card processing provider because of lower total cost.
• 31% of companies chose a primary card processing provider because of superior customer service.
• 30% of companies chose a primary card processing provider because of better reporting systems.
• 28% of companies chose a primary card processing provider because of the ease of setting up the processing service.
• 27% of companies chose a primary card processing provider because of the speed of setting up the processing service.

About Report

Mercator Advisory Group’s most recent report, Smart Point-of-Sale Terminals: A Rapid Transformation of Payments Acceptance provides insight into this exciting new technology, and what every merchant needs to know about it.

‘Smart terminals’ is a relatively new term in the payments lexicon, but one that is becoming more widely discussed among merchants of all sizes, types, and categories. The strategy that drives orchestration is nothing less than a paradigm shift in the way that merchants view payment service providers. Rather than conduct due diligence to select a “best-of-breed” service provider for each functional area within payments, orchestration allows merchants of all sizes and scales to offer their customers a smooth shopping experience, be it digital, in-person, or other channels. The growing diversity in payment methods, including contactless and e-wallets, creates an environment where having the right partner is paramount towards achieving your payments and overall business goals. The right payments partner will equip a merchant with the necessary capabilities to operate in this rapidly digitizing business environment, where automation and frictionless experiences are vital in ensuring customer satisfaction and loyalty. Similarly, in order to help merchants provide these services, processors and other payments stakeholders must update their own services and products to keep up with the latest demands of the consumer market and regulatory requirements.

“This is a highly relevant and impactful report,” stated the author of the report, Shreyas Shaktikumar, Senior Analyst in the Merchant Services and Acquiring practice at Mercator Advisory Group. “We are following this trend among a number of similar technology trends that are making payments a frictionless and invisible part of our everyday activities.”

The post Reasons U.S. Small Businesses Choose Primary Card Processors: appeared first on PaymentsJournal.

THUD! That’s the sound of the 900-page 2022 Nacha Operating Rules & Guidelines book being dropped onto an engineer’s desktop. SIGH …That’s the sound of engineers as they work to understand and memorize the first, oh, 300 or 400 pages of the book while building the payment system the company is asking for. HEAVY SIGH … That’s the sound of the engineers realizing that they must recode part of the application because of something new they learned on Page 645 of the guidelines. FLIP … That’s the sound of calendar pages turning as, six months to a year later, the payment system is finally up, running and connected to … one bank. 

Current Payment Systems

Banks’ back-end systems are complicated, heavily regulated, and more than likely set up sometime in the ‘90s. Knowledge of how to integrate with those systems has been lost to time. For companies taking a DIY approach to marshaling payments, this results in a lot of hand coding for engineers who likely didn’t know what they signed up for – not to mention added risk to the company and its customers.  

All of this is to say that building a payment system is hard – really, really hard. Companies typically go the route described above, assigning an engineer or two who has never dealt with payments before to build a payment system; or they hire a few dozen accountants, give them an Excel spreadsheet, and tell them to log into the bank’s online system and process and record each payment by hand. Either way, the work doesn’t scale efficiently – it effectively doubles, triples, quadruples and so on with each new banking institution the company connects with. 

This has been the status quo for many years, but the process of building a DIY payment processing system is not keeping pace with today’s fintech reality, where virtually every company in every industry has a need to move money around quickly and efficiently. 

Indeed, companies tend to build what’s right in front of them. “I have this bank, and I need to build this integration.” They don’t think about abstracting the process across multiple banks and the differences between Bank A and Bank B (and, soon enough, Bank C and Bank D …). 

In fact, 84% of respondents to a recent survey said they face payment operations problems, including slow payments, a high rate of payment failures and data quality errors. The impact is huge, both in terms of employee frustration and loss of productivity, but also increased risk and the potential for lost revenue. It’s clear that something needs to change, with 99% of the decisionmakers surveyed responding that upgrades to payment operations would be helpful. 

The Advent of Payment Operations Platforms

A new technology category is emerging that will help companies move and track money: payment operations. With a payment operations platform, companies will be able to automate every step of the payment process by integrating with the organization’s banks, structuring their accounts, and managing their general ledger through APIs or a web app.

The advent of the payment operations platform is analogous in a way to the emergence of the public cloud. Twenty years ago, new companies bought a data center rack and added servers as needed. Now, public clouds are the default. If you are racking servers, you are a couple of decades behind the times – and wasting far too many IT resources on managing those servers. And so it will go with payment operations. Companies of all sizes and across all industries will be able to automate payments using modern software and APIs, resulting in significant gains in productivity, faster payments, reduced risk, fewer errors, better customer service and greater insight into finances.

Signs of the Fintech Times

There are few companies that won’t benefit from a payment operations platform, but there are several telltale signs that the automation and domain knowledge that come with payment operations platforms will save your company time and money, as well as significantly decrease risk. These signs include:

• A team is logging into the bank every day. 
• You are copying and pasting data from the bank into a spreadsheet.
• You are manually reconciling statements.
• The number of payments you are sending to the bank is growing.
• It takes you 28 days to close the monthly books.
• You are expanding into a different country or, more likely, countries.
• You are adding a new bank. 

If there is one place you do not want an error, it is in your payment operations stack. Yet, the process of building your own payment system is extremely prone to error. An automated payment operations system provides a platform that is simple, sustainable, secure, and scalable. 

The post Why Companies Can’t Bank on DIY Payment Systems appeared first on PaymentsJournal.

Payments orchestration platforms are vital for any successful merchant. By integrating and managing various payment service providers (PSPs), merchants increase efficiency, authorization rates, and customer satisfaction. Payments orchestration is perhaps even more crucial for merchant aggregators whose offerings support any number of merchant customers.

To learn more about payments orchestration and the value of a flexible payments strategy from the perspective of merchant aggregators, PaymentsJournal sat down with Peter Mollins, SVP of Marketing at Spreedly, and Don Apgar, Director of Merchant Services Advisory Practice at Mercator Advisory Group.

Merchant aggregation 101

The merchant aggregator market has been exploding over the last few years, especially as merchants have been trying to digitize in the wake of the COVID-19 pandemic. “Essentially, [a merchant aggregator is] a digital business that is rolling up multiple merchants and providing a venue for those merchants to reach out to and expand their own markets,” Mollins explained. 

As in other integrated businesses, there are two broad flavors of aggregation: vertical and horizontal. Vertical aggregation bundles multiple components of particular industry spaces, such as gym management or travel. Horizontal aggregation deals more with infrastructure-based approaches that are applicable across industries, such as e-commerce or subscription management platforms. 

Whereas merchants of record (i.e., the name that appears on the payment statement) deal primarily in a B2C space, merchant aggregators have “B2B2C” relationships, providing a different value to end customers by serving both merchants and consumers. 

Added value as a prime differentiator

Merchants that seek out the services of an aggregator vary in size, but they have all the same needs as any other merchant of record: fraud prevention, omnichannel commerce, loyalty programs, alternative payment offerings, etc. For the merchant aggregator, there is an added degree of complexity because the are often supporting these needs for their merchant customers.

“Instead of the merchant having to go out and source this on their own, it’s now that those sub-merchants are relying on the aggregator to deliver that suite of services on their behalf,” noted Apgar.

The reality is that merchant aggregators do not exist in a vacuum; they are in a competitive space where any merchant client can easily turn to another platform that better suits their needs. “Aggregators can’t just get by on selling a bigger market or a better brand,” Mollins clarified. “They need to be selling value-added services as well.” 

Building connections – and maintaining them

One particularly challenging area for merchant aggregators is around managing payment gateways and processors. If an aggregator offers a “bring your own gateway” added-value service, the aggregator needs to build and then sustain connections to the various markets each merchant wants to reach. While it might seem like everybody uses the same payments messaging standards, ISO 8583 or ISO 20022, the details are more complicated.

“When you get into the full service stack,” Apgar pointed out, “everybody’s got their own API for reporting and financial settlement data, you’ve got an API for chargebacks and exception handling, an API for customer service, and those don’t follow any ISO standard.” Handling all of those connections is not just a “write once, run many” scenario; it requires full interface support. 

While building these gateways is an important component of merchant aggregation, it can require a huge time expenditure, and development teams would rather expend energy building core value and differentiation. Spreedly can offer payments orchestration support to help merchant aggregators meet all of their needs and then some.

Improving authorization rates and lowering costs

Smart transaction routing allows payments orchestration to bring an incredibly positive impact to authorization rates. “Being able to apply rules to route transactions to different services depending on what card is coming through and where they are located, that has an incredible impact,” stated Mollins.

As far as lowering costs, the truth is that building and maintaining these routing models is very expensive for developers. However, the cost of potentially losing that first transaction is even greater, as it could be the first in a trend of failed payments that happen over the course of a customer life cycle. The opportunity cost may also seem like a roadblock, since it can feel easier to live with subpar performance than to change payment processors, but it need not be that way. “Orchestration gives you the flexibility to test, measure, and compare [processors], and do that dynamically so you’ve always got the best solution without that big dev investment,” said Apgar.

As a provider of payments orchestration, Spreedly managed data across 120 different PSPs in 100 currencies around the world totaling $40B in transactions last year. In addition to raising authorization rates, Spreedly learned that providing a good mix of services is essential. “It was almost never the case that the most popular gateway was the best-performing in terms of authorization rates,” Mollins noted. 

How flexible payment stacks attract and retain new customers

There are clearly many ways in which a merchant aggregator utilizing payments orchestration can support merchants. “I would group it into two camps,” said Mollins. “One is the speed with which they can onboard  a new merchant. The second would be around added value.” Getting a merchant up and running with full services, and authorizing that first transaction in a timely manner, is extremely important.

With so many PSPs, though, aggregators must ensure each new addition works within the larger system. “The biggest issue is not so much the dev time per se,” Apgar clarified. “It’s regression testing to all the other systems that the merchant or the aggregator is running.”

Once those payment connections are ready to go, they become monetizable and critical to the customer experience. “Aggregators tend to offer payments as part of a larger offering,” said Apgar. “The value is that payments are very tightly integrated in every phase of the platform to create that really smooth user experience.”

At its core, payments orchestration is about connecting merchants to an arsenal of payments functionality that adds value. The in-house orchestration experts at Spreedly can share all of their data with the aggregators themselves, who can then act as the trusted advisors to the customers. “If I’m a merchant, I want to make sure that the platform that I’ve chosen to build my business around – that aggregator – is offering me continuous value that allows me to attract more end customers, get higher authorization rates, reduce fraud, and have a great customer experience,” Mollins concluded.

The post Payments Orchestration for Merchant Aggregators appeared first on PaymentsJournal.

For decades, sales tax returns have been the responsibility of the businesses making the sale. Businesses collect the appropriate amount of tax on transactions and reconcile the tax owed to the various tax authorities until a filing period comes around. However, as more commerce happens online, some authorities in the U.S. are looking into accelerating the collection of sales tax. The move would radically change how businesses have to manage tax returns, but could also pull credit cards and other payment processors into the mix.

For the sixth year in a row, Massachusetts governor Charlie Baker has included language in his budget requirement that would not only accelerate the payment and collection of sales tax in the state but also impose new obligations on payment processors.

The proposal defines a “third-party payment processor” as, “any person in association with credit card, debit card or similar payment arrangements that compensate the vendor or operator in transactions.” A payment processor that receives a request for payment from a business would be required to directly pay the sales tax to the state on a daily basis.

Because details on how this requirement would work on a day-to-day basis are thin today, payment processors should consider the many ways this could impact their operations. Here are three main impacts payment processors should keep in mind:

1. Data visibility challenges

Payment processors would have to adjust technology and processes to gain greater visibility into the details of every retailer’s sales. Processors would need to know how much of each transaction they’ve processed is tax, which is information that must come directly from each retailer. Today, it’s unlikely that many retailers provide the breakdown of their electronic sales to payment processors.

Gaining the data visibility needed would cost time, money, and resources for both payment processors and retailers. However, without granular transaction data, payment processors would face a steep challenge when it comes to accurately remitting sales tax to authorities.

2. Sales tax collection challenges

Payment providers would need to be able to transfer sales tax collections on behalf of their customers on a daily basis. Today, the payment date for sales tax returns in most states is the 20th of each month, to give businesses time to close their books. Because many retailers are unaware of how much sales tax they’ve collected until they process their books monthly, an investment would need to be made from both the payment processor and retailer to increase data visibility.

3. Shopping behavior challenges

Processors would need to account for the fluidity of sales (a purchase is made on Monday, but returned Thursday). As it stands, retailers often have the ability to handle the return of sales tax charged for returns because the transactions generally happen within the same month and they can make the adjustments before they remit the tax to the state. If a payment processor is remitting tax on behalf of retailers on a daily basis, adjusting for returns and credits could become a complex and cumbersome process to manage.

As tax authorities move closer to real-time compliance, they will have to address the challenges that would be created for retailers and payment providers before they can effectively enforce new requirements. Still, there will be inevitable challenges for payment providers that they will have to address as tax authorities begin to shift some of the sales tax obligation away from retailers.

While we’re likely years away from real-time compliance being a viable requirement in the U.S., other parts of the world are moving closer to e-compliance and real-time tax management as ecommerce grows. Being aware of developments outside of the U.S. can help inform and prepare businesses for what is likely to make its way to the U.S.

Real-time compliance will have far-reaching implications for the broader business community. While payment providers will need to make investments to comply, the shift to real-time compliance will not happen in a vacuum. Businesses, payment processors, and governments will have to make adjustments in order to facilitate compliance in a digital-first, real-time manner.

The post Real-Time Compliance Is Being Discussed in the U.S. What Could It Mean for Payment Processors? appeared first on PaymentsJournal.

It is not news to anyone that the pandemic has accelerated digital change in the payments industry. Support for ISO 20022 is growing, real-time payments are gaining traction, and banks are looking toward cloud adoption and APIs to deliver better payment capabilities to their customers.  How can payments migration help?

While traditional financial institutions were once resistant to change, their wariness of shifting away from hosted infrastructure in favor of a cloud approach is beginning to crumble. This is particularly true given their fintech competitors’ eagerness to embrace a platform approach.  

Despite a willingness to migrate payments, only 14% of the 150 banks and payment service providers surveyed in 2021 had deployed any cloud solutions. Across a range of payment capabilities, only around one-third of financial organizations believe their organization is delivering, at best, the minimum expected standards of products and services.  

There is a case for payments migration. Banks need to embrace innovation to provide customers with new ways of interacting with banks and payments. Failing to do so comes with the risk of not meeting consumer expectations for a modern payment experience. “Risks associated with maintaining a legacy or hosted approach to payments include further pressure on operating margins as well as competitive product disadvantages, leading to potential relationship issues,” said Steve Murphy, Director of the Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group. 

However, there are obstacles that come with migration. Knowing this, Diebold Nixdorf compiled a list of key “gotchas” in payments migration–challenges that can impede migration efforts–and advice on how to avoid them.  

Migration Gotcha #1: Not taking proprietary message protocols into consideration 

Legacy payment systems often rely on proprietary message protocols to communicate with external devices and systems. Continued use of these protocols will require permission from both incumbent and new suppliers. A customer code will be necessary to replicate those message protocols.  

Migration Gotcha #2: Not storing transactional data  

Historic payments data must be stored to manage disputes. While transactional data is likely already stored in the incumbent system, migration efforts involve replacing and shutting down that system. To make sure that important data is not lost, organizations should ensure that at least 180 days of transaction data is replicated in any new system before the old system is shut down.    

Migration Gotcha #3: Not checking on security key and certificate expiration dates 

Security keys are crucial to protecting data. Security keys enable secure access to other devices, systems, and applications. Security certificates are data files that establish the authenticity, reliability, and identity of a website. When certifications expire, browsers will display a warning on the webpage informing the entrant that the security certificate has expired. This can chip away at a customer’s trust level and leave financial institutions more vulnerable to security threats. The migration process is an ideal time to refresh security keys and certifications. By doing so, organizations avoid facing an unexpected key expiration mid-migration, which adds to the risk and stress the process.  

Migration Gotcha #4: Not ensuring operational readiness 

Operational readiness means being ready to deploy, operate, and maintain a payments migration project without significant issues. Projects designed without operational readiness in mind are more likely to fail. This includes ensuring compliance with any relevant rules and regulations. By not taking operational readiness into consideration, organizations could find themselves missing something vital as they approach their go-live date.  

Migration Gotcha #5: Not understanding SLAs and OLAs at the onset of the project 

A service level agreement (SLA) is an external contract between a vendor and its customers that outlines the services a contractor will provide and at what level. An Operational Level Agreement (OLA) is an internal agreement outlining the roles and responsibilities of a service provider’s team. Both agreement types are crucial during migration, especially when external vendors are involved. By clearly establishing expectations and terms, organizations can have more success in meeting critical business controls and, eventually, deploying an operational system.  

Migration Gotcha #6: Not remembering RTO and RPO objectives 

Recovery Point Objectives (RPOs) measure how frequently data is backed up, helping to avoid data loss. Recovery Time Objectives (RTOs) define how long it takes to recover IT infrastructure following an incident. Ideally, organizations will have a short RTO and RPO to minimize productivity losses, recovery costs, reputational damage, and other detrimental effects of going offline.  

Migration Gotcha #7: Not keeping non-functional items in view  

When financial institutions choose to migrate their payments software, they are primarily focused on the core capabilities. However, there is more to migration than those big cost items. There is an entire ecosystem surrounding core payment infrastructure, including monitoring and automation tools. During migration, these peripheral systems cannot be ignored. If non-functional items are not in view and replaced, organizations will not maximize the benefits that come with a holistic payments approach.  

Migration Gotcha #8: Not involving all parties in transition planning 

Chances are that the list of departments that interact with your new payments solution is longer than you initially think. Leaving out any of these parties can significantly delay the ability to go live if they are not prepared for a change. Transition planning needs to involve all these parties for a seamless migration to occur. 

Migration Gotcha #9: Not establishing clear and concise transitional criteria 

For each transition to the next stage of the migration progression, all stakeholders should agree on a well-defined set of entry and exit criteria. This means ensuring there is sufficient governance around moving on to the next phase of the process.  

Migration Gotcha #10: Not planning for pilots and shadow processing  

Pilot projects and shadow processing are ways to identify any potential problems with the system. Pilot projects are initial, small-scale implementations designed to prove that a project is viable. They rely on real-time data processing that responds immediately to commands or the entry of data. Shadow processing, or batch processing, involves the execution of a workflow with little to no human interaction. 

Migration Gotcha #11: Not booking certification slots in advance  

When financial institutions change a core banking system, that system must go through significant compliance control and auditing. Large auditing organizations such as Visa and Mastercard are incredibly busy, and it can take months to obtain the certification slot needed before a new system can go live. Financial institutions need to book these certification slots well in advance–at least six months out–or risk facing significant delays in their system’s launch date.  

Migration Gotcha #12: Not allowing enough time  

Migration should not be rushed; no detail can be overlooked. Pilots and shadow processing, transition planning, certification slots, and the other important components of migration take time, and understanding that can help organizations develop a realistic timeline.  

The takeaway  

Banks need to embrace a platform approach to payments to meet the demands of the modern consumer. Migrating away from legacy systems is no simple task, but it is necessary to remain competitive in today’s world.  

“It is time to encourage core solution providers to openly partner with a wide range of service providers to enable the processing efficiencies that trickle down to an improved customer experience. Cloud-native solutions providers know they become stronger as more third-party service providers add value to their core offerings and welcome valid third-parties that wish to integrate to their solution,” said Tim Sloane, VP of Payments Innovation at Mercator Advisory Group. 

The best bet for banks is to migrate to a modern platform that supports scalability, flexibility, and automation. Choosing an experienced partner can help organizations avoid falling victim to the many ‘gotchas’ that can come with a poorly planned payments migration strategy.  

The post A Guide to Avoiding ‘Gotchas’ During Payments Migration  appeared first on PaymentsJournal.

The payment gateway market is set to grow from its current market value of more than USD 20 billion to over USD 60 billion, as reported in the latest study by Global Market Insights Inc.

Growing proclivity towards online shopping and accelerating demand for secure digital payments and mobile payment technology has created a massive demand for efficient payment gateway solutions among various businesses. Ongoing penetration of smartphones and internet in conjunction with the emergence of online banking apps and digital payments is further fueling the demand for payment gateway systems. The rising demand for these solutions is positively influencing the business space for payment gateway market.

Security of the online transaction has been a major challenge faced by the businesses as well as the customers. In this regard, payment gateways are gaining a wide prominence as they offer high security to the businesses for performing online transactions.  

An overview of some of the major trends that are strongly influencing the business space is as under:

Development of advanced solutions by market players

Shifting consumer preference for digital payments has prompted the market participants to develop offerings suiting consumer demand in order to gain a competitive edge in the industry. Citing an instance, in 2021, renowned payment technology firm Splitit announced the availability of a new service dubbed Splitit Plus that will allow merchants to provide payment installments to their customers in just few minutes. The company claims that Splitit Plus has been developed as an integrated payment gateway that offers an all-in-one platform combining its installment payment platform with a card processing solution for the installments.

Mounting demand for local bank integrated payment gateway

Growing digitalization across banks is the major factor which is augmenting the demand for local bank integrated payment gateway. This payment gateway directs customers to banks while performing a financial transaction wherein the users can add their financial credentials. This payment solution is fast and easy to setup which has impelled its adoption in SMEs. Considering the high product usability, local bank integrated payment gateway segment is anticipated to record a robust CAGR of over 15% through 2027.

Rising popularity across SMEs

SMEs are showing great interest in deploying digital payment solutions to avoid long queues of customers. Besides, digital payments are faster than the conventional methods of payment which enables these enterprises to offer an improved customer experience. These payment techniques also help SMEs in reducing the risks like thefts, arising from physical security breach on their premises. On account of these factors, SME segment had captured a market share of over 60% in 2020 and is expected to grow exponentially in the coming years.

Growing adoption in media & entertainment sector

Lately, media & entertainment industry has emerged as a lucrative segment for payment gateway market. This is majorly due to a considerable rise in the adoption of advanced technologies, such as AI and IoT in the media & entertainment sector. The entertainment industry is emphasizing on improving the customer experience by providing digital payment services at movie theatre, amusement parks, and plays.

Increasing digitization in BFSI sector in Europe

Payment gateway market is observing a significant growth in Europe and is estimated to record an appreciable valuation of over USD 15 billion by 2027. The major factor that is positively influencing the progression of regional market is the expanding digitalization across the financial sector. Several major banks in the continent are now deploying different digital solutions for enhancing the banking experience for their customers. In addition, rising number of internet banking users is further favoring the market growth.  

Rising penetration of internet and smartphones coupled with shifting consumer inclination towards digital payment solutions has instigated the adoption of payment gateways over the recent years. With the ongoing technological advancements in these payment solutions, their demand will further increase in the coming years which in turn will enhance the business outlook.

The post Top 5 Trends Transforming Payment Gateway Market Outlook Over 2022-2027 appeared first on PaymentsJournal.

Waukee, Iowa – February 15, 2022 – VizyPay, an industry-leading payment processing company for small and medium-sized businesses (SMBs), today announces it has surpassed the $2 billion milestone in payments processed since its founding in 2017. Impressively, over half, approximately $1.2 billion, of payments were processed in 2021 alone. The company is projected to double that number in 2022 to process over $2 billion by year’s end, achieving a collective $4 billion in processing since 2017.

Since its inception, VizyPay has achieved outstanding success, placing #45 on the 2021 Inc. 5000 list of fastest-growing private companies in America, installing more than 12,000 merchants across the nation and achieving 8,000% revenue growth. The company itself has rapidly expanded, moving its headquarters to a new 15,000 square-foot office custom-designed for VizyPay’s needs. Since 2020, VizyPay has nearly doubled its workforce, now employing 69 talented, full-time employees. In addition, the bootstrapped company partners with over 700 independent sales contractors across the U.S.

VizyPay is renowned for its powerful and transparent payment solutions, tailored to fit the needs of SMBs, especially those located in communities outside of major metro areas that are often overlooked or mistreated by major payments industry players. Most notable of all is VizyPay’s award-winning Cash Discount Program (CDP) which empowers business owners to ditch unpredictable fees and take control of their credit card processing. For a low month-to-month subscription, the flexible, transparent program allows for unlimited credit card transactions and offsets up to 100% of processing fees. To date, CDP has saved businesses more than $25 million.

Committed to truly helping SMBs across the country, VizyPay started focusing on expanding access to its money-saving CDP in 2021. VizyPay launched VizyPOS, an all-in-one payment processing app for low-cost PAX Technology payment terminals. Designed for easy implementation of service offerings such as CDP, VizyPOS also provides advanced analytics and convenient data-driven insights that enable SMBs to streamline their business processes. The Merchant Portal provides access to the same information, in greater detail, via web browser. VizyPOS is offered with no monthly fee for CDP customers, and now, those who sign up with VizyPay will receive a free PAX POS smart terminal with VizyPOS pre-loaded. Also in 2021, and due to popular demand, VizyPay ungated its Cash Discount app for Clover POS systems, making CDP easily accessible to any merchant using a Clover POS system. Free for all VizyPay CDP customers and available to non-customers for only $14.99/month, the app seamlessly incorporates processing fees into menu pricing with a tap of a button.

“As VizyPay approaches its five-year anniversary in April, I’m extremely proud of how far we’ve come. Beginning as a completely bootstrapped company without any outside investment and only one employee, we have only continued to excel, attracting outstanding in-house team and sales partners, boosting our loyal merchant base, enhancing our processing capabilities and growing our revenue,” said CEO and founder Austin Mac Nab. “Dedicated to being the voice of small businesses and elevated by our core tenants of transparency and culture, VizyPay will continue to be a force to be reckoned with within our industry.”

“2021 was a year of great success for VizyPay. Not only have we reached our $2 billion milestone, we were also crowned as the fastest-growing privately held payment processing company in America,” said Frank Pagano, managing partner of VizyPay. “We’re honored by our achievements and owe our success to the dedication of #TeamVizy. As we look forward to 2022 and beyond, we will focus on expanding our team and our reach with the goal of shattering the next milestone of $4 billion in payments processed.”

For more information, visit www.vizypay.com.

The post VizyPay Achieves $2B in Payments Processed in Four Years; Expects to Surpass $4B in 2022   appeared first on PaymentsJournal.

The payment processing solutions market is likely to register lucrative growth over the coming years owing to rapid digitization, and rising penetration of smartphones coupled with adoption of numerous mobile payment applications. The ongoing market growth can further be ascribed to emergence of advanced technologies like VR, AI in the banking sector.

The Payment Processing Solutions Market is set to grow from its current market value of more than $60 billion to over $140 billion by 2026; as reported in the latest study by Global Market Insights Inc.

Presently, new product developments, partnerships, and collaborations, are strategies that are majorly being adopted by the key industry players to maintain their market share. Citing an instance, in November 2020, Bolt On Technology, a leading supplier of technology solutions for the automotive aftermarket, reportedly collaborated with BASYS Processing, one of the leading payment processing companies, to present an additional option for Text To Pay, one of the most popular features of Bolt On Technology.

This new strategic partnership is one of the options for vehicle owners who generally depend on mobile payment for their auto service. Through this partnership, auto repair shops could easily get access to BASYS’ innovative payment processing capabilities as well as top class customer service. Text to Pay, for repair shops, improves the customer experience and enables fast payments and enhanced cash flows.

Below are key trends that are likely to influence payment processing solutions industry growth:

1. Growing adoption of e-wallet payments

With respect to mode of payment, the e-wallet segment is anticipated to grow at a moderate rate over the forthcoming time period. E-wallets provide users a secure gateway for performing transactions on the go. Additionally, the transactional data is securely encrypted as well, thereby minimalizing fraudulent events. Today, leading companies providing these services are also promoting as well as encouraging customers to utilize the option of e-wallet payment by offering relevant rewards and incentives. This trend would greatly shape the industry outlook over the analysis period.

2. Growing demand for payment processing solutions across large enterprises

The demand for innovative payment processing solutions among large enterprises is rapidly increasing. This growth is mainly due to the growing need for flexibility to provide customized as well as value-added payment services to their users. Leading enterprises process transactions from numerous channels. These enterprises use sophisticated payment gateways and solutions for streamlining the processing of these varied transactions. Moreover, advanced capabilities such as unified commerce, user reporting, and security of data among others are boosting the adoption of payment processing solutions.

3. Supportive government initiatives across Europe

The payment processing solutions market in Europe is projected to account for more than 20% of the overall industry share by the end of the estimated time period. This anticipated growth is mainly ascribed to the favorable initiatives undertaken by the regional governments for improving the digital banking infrastructure. Furthermore, the growing adoption of smartphones is also expected to accelerate the regional market size. 

Meanwhile, investments by leading market players in the development of new and innovative products are also supporting the market growth. Citing an instance, in October 2020, Silverflow, a renowned payment technology company, reportedly announced a €2.6 million seed investment round to launch its new cloud-native card payments platform by 2021.

The round was led by Crane Venture Partners, a renowned UK-based seed-stage investor, and also recorded participation from INKEF Capital and prominent angel investors as well as other renowned industry leaders from Booking.com, First Data, Adyen, and Pay.On. Silverflow is one of the newest card payments processors with a cloud-native platform especially built for the current technology stack. It also has simple APIs and updated data flows, which are directly integrated into card networks.

Global Payments, Inc., Square, Inc., Fidelity National Information Services, Inc., PayPal Holdings, Inc., and Adyen among many others are some of the key players operating in the payment processing solutions market.

The post 3 Major Trends Fostering Payment Processing Solutions Market Outlook By 2026 appeared first on PaymentsJournal.

This announcement in Finextra is about commercial card technology adoption associated with virtual cards, which has been the high growth driver in that part of the B2B payments space for the past 6+ years (with a pass for the pandemic recessionary impact).  Lloyds Bank is now providing straight-through processing for virtual cards using Visa’s STP platform. 

Members of CEP will be very familiar with the dominant form of virtual card payments, which requires the supplier to process their own payment after receiving the appropriate information via secure mail, portal, or some other agreed method.  This is the supplier-initiated model and still represents more than 90% of virtual card processing. 

The other less prevalent model (buyer-initiated) is for suppliers to be set up to have the virtual card payment automatically processed without human intervention, while settlement to its bank account occurs generally in same-day, while remittance data is also digitally provided for faster reconciliation. 

‘Lloyds Bank has become the first bank in Europe to partner with Visa to offer Straight Through Processing (STP) technology to customers using its commercial charge cards….Straight-Through Processing (STP) enables a more efficient way to pay invoices while providing the traditional benefits of commercial card payments to both the buyer and the supplier….With STP, buyers can request to time their payments to maximise the number of days before their statement, giving them more flexibility with their cashflow than would be the case with a bank transfer….Suppliers benefit by receiving funds directly into their accounts without the need to manually input card details or use card terminals….STP also makes it easier for suppliers to identify the source of inbound payments thanks to the rich remittance data.’

The STP type of virtual card payment is not new technology and is of course the more logical and beneficial for suppliers, given the speed and lack of manual handling by receivables staff, reducing operating costs, and improving DSO by at least 1-2 days. However, buyer-initiated virtual cards have not caught on in North America or other regions in any large way since the merchant setup is a bit more complicated, requiring up-front resources that most merchants don’t have or don’t want to apply. 

So the upfront inconvenience is a large opportunity cost for suppliers and one that the issuing part of the industry has yet to figure out. That is one reason why receivables automation intermediaries are receiving more attention–they can step in and process virtual cards on behalf of suppliers using advanced methods such as RPA–which is good but also adds incremental cost to suppliers. 

We have not received a briefing but would expect that Visa has stepped up (perhaps through Lloyds acquiring arm) with some support to ease the initial supplier investment friction so they can get going with STP.  As we have pointed out in a number of research pieces, the security and working capital flexibility of virtual card technology should allow for a much greater share of B2B invoiced payables volumes, and this is the way to get there.

‘Helen Jones, Executive Director, Visa Business Solutions at Visa, added: “Commercial cards are a secure, reliable and convenient way for businesses to pay. STP will help make the experience of paying invoices easier and more streamlined for both suppliers and buyers. We’re delighted to partner with Lloyds Bank to help their customers better manage their cashflow and their supplier relationships at such a critical moment for UK businesses.”…The launch of STP is the latest in a series of payment innovations Lloyds Bank has introduced to support its business customers.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post Lloyds Bank and Visa Promise Straight-Through Processing for Commercial Charge Cards appeared first on PaymentsJournal.

Surcharging for card payments has been in the news again as Colorado repealed its state’s ban on surcharging. In Colorado, merchants can now surcharge up to 2% of the purchase or the actual cost that the merchant will pay to process that transaction.  Merchants should be able to charge whatever they want for the goods and services they sell, but it seems odd to single out the cost of payments for special treatment. Why stop with payment surcharges? Why not charge extra for the current higher costs of labor or for the annual percentage increase in healthcare that they provide their workers or overall inflation rates?

Some merchants, such as Hilton have begun to itemize card processing fees on their guests’ bills and charge them extra. This does not make guests happy as The Points Guy posted. If Hilton is going to charge more for using a credit card, I am going to want to use a different payment type. Does that mean that I can now hold a room by telling Hilton that I will pay with a check? 

I understand that many merchants believe that they should pay less for payment processing, and they can certainly raise their prices to reflect an increase in their cost of doing business. But why would a merchant make something as arcane as the cost of payment processing a customer issue and risk irritation and potential loss of a sale? 

Here’s what Digital Transactions  had to say about the recent ban on surcharges in Colorado:

The bill aligns with U.S. Supreme Court precedent and legal decisions in other states ruling that surcharge bans unconstitutionally restrict merchants’ First Amendment rights.

“Colorado legislators looked at surcharging laws throughout the country and decided they did not want a Wild West environment if the state’s surcharge prohibition was dropped,” says Michael Tomko, chief operating officer for CardX LLC, which lobbied and testified in support of the bill. “The card brands created a robust engine for surcharging to ensure that there is appropriate disclosure for surcharging, such as itemizing the surcharge on the receipt, and Colorado decided it wanted to take those best practices, and the best practices from other surcharge laws around the country and create a law that harmonizes with the rules for surcharging nationally.” 

The signing of the bill in to law, which Colorado state’s legislature passed in June, closely follows defeat of a surcharging ban in Kansas earlier this year. Chicago-based CardX, which is a surcharging-services provider, filed suit against that ban.

Colorado’s passage of the law leaves just two states—Massachusetts and Connecticut—with surcharging bans. Lawmakers in both states are surveying the surcharging landscape nationally, Tomko says. 

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Why Would a Merchant Ever Surcharge for a Card Payment? appeared first on PaymentsJournal.

Small businesses using GoDaddy’s e-commerce platform will have a new payment processing solution. Leveraging its December 2020 acquisition of payment platform, Poynt, GoDaddy will now have a home-grown payments option for over 20 million businesses that sell on its platform.

GoDaddy has been partnering with other payment processors to handle online sales transactions. Future plans include in-store payments enablement to accommodate the increasingly multi-channel shopper.

The following excerpt from a Finextra article reports more on the topic:

GoDaddy Inc. announced the launch of GoDaddy Payments, a new payments solution that enables GoDaddy Websites + Marketing and Managed WordPress WooCommerce customers to handle all of their commerce transactions directly through GoDaddy.

GoDaddy Payments is built using the technology and teams acquired from Poynt in December 2020. This payments feature complements its suite of website commerce and online marketing tools. GoDaddy Payments provides a fast and secure way for GoDaddy’s ecommerce customers to get paid. The setup process is simple and quick, enabling customers to begin using GoDaddy Payments for processing their customers’ transactions in minutes. Payments are processed securely and efficiently, with funds deposited into users’ bank accounts the very next business day.

“GoDaddy is hyper focused on empowering our customers to sell everywhere with a single solution in a seamlessly intuitive experience,” said GoDaddy President of Commerce Osama Bedier. “GoDaddy Payments represents a major step towards centralizing every tool and service a business needs to successfully sell online. Customer feedback has been overwhelmingly positive, and we look forward to accelerating our efforts.”

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post GoDaddy Launches Own Payments Solution For Small Businesses appeared first on PaymentsJournal.

June 15, 2021 09:00 AM Eastern Daylight Time

OMAHA, Neb.–(BUSINESS WIRE)–BHMI, a leading provider of payments software and creator of the Concourse Financial Software Suite^®, announced that Payshop has launched its implementation of Concourse. The deployment will bolster the company’s back office processing for all physical and electronic payment transactions going through its network, creating a unified, omni-channel environment that offers a seamless support system for all the payment services it provides.

Payshop serves clients in Europe through its wide array of payment services. The Portugal-based company enables users to pay a wide range of services from utility bills to tolls and mobile top-ups – at post office branches and retail agents network of diverse commercial establishments located throughout the country. Concourse processes SIBS payments and Single European Payments Area (SEPA) transactions for Payshop, as well as all other transactions passing through Payshop and CTT front-end systems via a Unified Meta Transaction Format (UMTF) for back office processing. Additionally, Concourse’s implementation of the ISO 20022 standard allows Payshop to continue harmonizing all cash and cashless transactions, enhancing the efficiency of its cross-border payments.

“We are excited about the successful implementation of the Concourse Financial Software Suite,” said Tiago Mota, CEO of Payshop. “The flexible, robust back office solution is ideal for our omni-channel processing needs, supporting Payshop’s users, strategic objectives and continued growth.”

“It is an honor to provide Payshop’s back office processing needs as they continue their rapid growth in the digital and retail channels,” Dr. Jack Baldwin, CEO of BHMI. “We’ve designed Concourse to be highly flexible with the configurability and scalability to meet the needs of all transaction types, ensuring our clients can solve the issues of today and adapt to what comes next.”

About Payshop

Payshop is a subsidiary of Banco CTT and part of the CTT Group. As a Payment Institution, with 20 years of existence, is regulated by Banco de Portugal and provides a diverse portfolio of payment services offered to both Portugal citizens and client businesses. This includes payment services such as billing collections, mobile top-up, toll payments, tax payments, and much more. For more information, please visit www.payshop.pt

About BHMI

BHMI is a leading provider of product-based software solutions focused on the back office processing of electronic payment transactions. The company is best known as the creator of the Concourse Financial Software Suite^® – a unique integrated collection of back office products that allow companies to adapt to the rapidly changing world of payments quickly and easily. Concourse is a cohesive and integrated package, including settlement, reconciliation, fees processing, and disputes workflow management, that reduces the cost and complexity of back office processing. Concourse’s continuous processing, near real time architecture and powerful rules engine is ideally suited for new payment initiatives like P2P and enables companies to perform back office processing for any type of payment transaction. To learn how your company can benefit from the power and flexibility of Concourse, please visit www.bhmi.com.

The post Payshop Goes Live with BHMI’s Concourse, Powering Seamless Back Office Transaction Processing appeared first on PaymentsJournal.

In this announcement at businesswire we see that Emburse, a 2014 startup out of Los Angeles that specializes in expense management and accounts payable automation, is launching new payables to be integrated with their existing Chrome River Invoice product. 

The new solution is called Emburse Pay – B2B Payments, and adds automated ACH, check, and virtual card processing through a partnership with WEX.  Readers will have read about how the pandemic has placed the automation of financial operations at the forefront of many corporates’ priority lists, but apparently, adoption has a long way to go.

“Despite the massive push toward digital transformation during the pandemic, most organizations continue to pay vendors using physical checks. In addition to it being an incredibly inefficient and error-prone process, finance teams are missing out on huge cost-saving opportunities through early payment discounts and card rebates,” said Rajeev Subramanyam, general manager of Emburse Pay. “Our Emburse Pay suite of solutions was designed to streamline what has traditionally been a time-consuming and inefficient process – manually reconciling corporate payments. In B2B Payments, we have taken what has traditionally been a very cumbersome process and integrated it into our AP solutions’ workflow.”

So the many collaborations continue as fintechs further realize the value of integrated services and corporates recognize how they can benefit through convergence and improved delivery of many existing capabilities. We have been pointing this out to members through reports for some time, and don’t expect anything but continued expansion of digital operations. 

WEX is more broadly known for fuel cards but has been expanding its footprint into payables automation for a few years now, using both direct distribution and partnerships with other service providers.  The market for electronic payables solutions remains quite large, as millions of checks will be disappearing from day-to-day operations during the next five years.

‘“Adding Emburse Pay – B2B Payments to Chrome River Invoice was a natural next step for us. After seeing the benefits of increased efficiency and error-free payment processing, we were excited to roll out B2B Payments and complete the AP lifecycle in an automated fashion,” said Marissa Navarro, controller at Mitchell Silberberg & Knupp LLP.’ 

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post Emburse Pay – B2B Payments to Deliver First Fully Automated Purchase Order-to-Payment Processing appeared first on PaymentsJournal.

WORLDWIDE, THURSDAY 27 MAY 2021 –Nexus Inc. (“Nexus”), a deep tech digital asset management firm domiciled in Dubai, Kuala Lumpur, Melbourne and Singapore, is reporting more than US$1.3 billion in transactional volume during the 2019-2020 financial period. This is attributed to Nexus experiencing an ongoing period of accelerated growth, demonstrating an upward trajectory of 372 institutional clients on roster. To date, Nexus is valued close to US$240 million company.

In July 2020, Nexus closed a US$2.6 million Series A funding tranche led by Australia asset management firm CollinStar Capital. The investment sum will afford Nexus product development scalability as the blockchain-centric firm meets global market demands to support exponential client growth. Other angel investors, which have pumped in well over US$51 million since 2016 including, Australia bitcoin mining company Blockchain Global Ltd and blockchain technology consortium Hypertech Group, California private equity firm Blockchain Ventures, and Hong Kong digital assets trading platform Hoo and online financial investment site Molecular Future.

The raised funds will enable Nexus to continue providing best-in-class support and services. These encompass both blockchain and financial related services. Additionally, Nexus will advance technology and interoperability by creating and innovating digital applications for both mobile and desktop devices. These developmental efforts translate to Nexus delivering on the most user-friendly, personalized digital navigation assistant in the market, capable of providing a wide variety of services alongside an enhanced user interface; all for the purposes of catering towards the best user experiences possible.

Nexus’s current cluster of clients include Singapore digital asset trading platform CoinW.ai/CoinW.pw, Australia’s liquidity provider Fantastech, China’s financial service provider Hyper ProXimity (HPX), Australia, Hong Kong and Singapore future-oriented blockchain crypto bank HyperBC, Saudi Arabia payment gateway HyperPay with offices in Dubai, Amman, Cairo and Bahrain, Malaysia investment firm Monspace, and Australia supply chain solutions provider Ucot.

The post Nexus INC. Announces More Than 1.3 Billion US Dollars in Transactional Volume in the Last Two Years; Valuation Stands at US$240 Million appeared first on PaymentsJournal.

It almost seems quaint compared to ransomware, account takeovers, and data theft, but criminal miners are stealing processors wherever they can get them to improve their crypto mining success rate.

This is done using specialized Trojans and cloud services that offer free access for a period of time. Of course, these criminal miners may also ultimately just directly target crypto wallets:

“One risk comes from miners that attempt to abuse free resources on the internet provided by cloud and application service providers. Wang explained that what the miners might do is create many free accounts on these cloud infrastructures and get a good deal of computing power, at the expense of the service provider. She noted that such activity is considered to be against the terms of service, but the activity still needs to actually be identified so it can be stopped.

“Blocking crypto-mining activity, just like any detection work, is very much an arms race,” Wang said.

She noted that detecting indicators of crypto-mining activity can include conducting analysis of DNS traffic or monitoring for specific streams or patterns in network packets. As defenders are trying to identify the crypto-mining activity, she warned, the miners are also reacting to that activity and are working hard to avoid being detected.

Another risk Wang spoke about is cryptojacking.

“Miners are very resourceful, they’re very financially motivated, and some of them are attacking and compromising internet-facing computers to gain control of large numbers of resources to conduct mining activities,” Wang said.

Among the ways that cryptojacking is executed is with malware, such as WannaMine, which users are somehow tricked into installing by malicious sites.

Cryptocurrency Wallets Under Attack

Wang emphasized that the security pillars of confidentiality, integrity and availability all apply to cryptocurrency as well.

One of the key points of attack in the cryptocurrency world is what are known as cryptocurrency wallets. These are typically software-based vaults or “wallets” where users store the private cryptographic keys for the cryptocurrency they hold.

“If you get access to a cryptocurrency wallet, you effectively own the currency,” Wang said.

Attackers have been going after cryptocurrency wallets in different ways. One approach cited by Wang is with the ElectroRAT malware that is able to take over vulnerable wallets. ”  

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Criminal Crypto Miners Are Stealing Your CPU appeared first on PaymentsJournal.

The payment processing solutions market is likely to register lucrative growth over the coming years owing to rapid digitization, and rising penetration of smartphones coupled with adoption of numerous mobile payment applications. The ongoing market growth can further be ascribed to emergence of advanced technologies like VR, AI in the banking sector.

Presently, new product developments, partnerships, and collaborations, are strategies that are majorly being adopted by the key industry players to maintain their market share. Citing an instance, in November 2020, Bolt On Technology, a leading supplier of technology solutions for the automotive aftermarket, reportedly collaborated with BASYS Processing, one of the leading payment processing companies, to present an additional option for Text To Pay, one of the most popular features of Bolt On Technology.

This new strategic partnership is one of the options for vehicle owners who generally depend on mobile payment for their auto service. Through this partnership, auto repair shops could easily get access to BASYS’ innovative payment processing capabilities as well as top class customer service. Text to Pay, for repair shops, improves the customer experience and enables fast payments and enhanced cash flows.

As per a new Global Market Insights report, payment processing solutions market is estimated to surpass a $140 billion valuation by 2026.

Below are key trends that are likely to influence payment processing solutions industry growth:

1. Growing adoption of e-wallet payments

With respect to mode of payment, the e-wallet segment is anticipated to grow at a moderate rate over the forthcoming time period. E-wallets provide users a secure gateway for performing transactions on the go. Additionally, the transactional data is securely encrypted as well, thereby minimalizing fraudulent events. Today, leading companies providing these services are also promoting as well as encouraging customers to utilize the option of e-wallet payment by offering relevant rewards and incentives. This trend would greatly shape the industry outlook over the analysis period.

2. Growing demand for payment processing solutions across large enterprises

The demand for innovative payment processing solutions among large enterprises is rapidly increasing. This growth is mainly due to the growing need for flexibility to provide customized as well as value-added payment services to their users. Leading enterprises process transactions from numerous channels. These enterprises use sophisticated payment gateways and solutions for streamlining the processing of these varied transactions. Moreover, advanced capabilities such as unified commerce, user reporting, and security of data among others are boosting the adoption of payment processing solutions.

3. Supportive government initiatives across Europe

The payment processing solutions market in Europe is projected to account for more than 20% of the overall industry share by the end of the estimated time period. This anticipated growth is mainly ascribed to the favorable initiatives undertaken by the regional governments for improving the digital banking infrastructure. Furthermore, the growing adoption of smartphones is also expected to accelerate the regional market size. 

Meanwhile, investments by leading market players in the development of new and innovative products are also supporting the market growth. Citing an instance, in October 2020, Silverflow, a renowned payment technology company, reportedly announced a €2.6 million seed investment round to launch its new cloud-native card payments platform by 2021.

The round was led by Crane Venture Partners, a renowned UK-based seed-stage investor, and also recorded participation from INKEF Capital and prominent angel investors as well as other renowned industry leaders from Booking.com, First Data, Adyen, and Pay.On. Silverflow is one of the newest card payments processors with a cloud-native platform especially built for the current technology stack. It also has simple APIs and updated data flows, which are directly integrated into card networks.

Global Payments, Inc., Square, Inc., Fidelity National Information Services, Inc., PayPal Holdings, Inc., and Adyen among many others are some of the key players operating in the payment processing solutions market.

The post Three Major Trends Fostering Payment Processing Solutions Market Outlook Through 2020-2026 appeared first on PaymentsJournal.

This piece was found in Payments Source and discusses the relative benefits of merchants utilizing a payments facilitator acceptance option instead of a direct relationship with an acquiring processor.  The author in this case takes aim at the field services industry. 

This tends to streamline the process for merchants who then don’t have to deal with multiple parties (acquirer, processor, etc.) and may indeed gain some pricing leverage as part of a cooperative.

‘The payment transaction within the order-to-cash cycle is arguably one of the most crucial parts of field service industries. For some companies, there is not enough debate or research involved when deciding on a payments provider. However, it is becoming more critical for service providers to take control of their payments process and understand how the field service software partners they work with can significantly help them secure a competitive advantage.’

One would also expect that a payfac may also provide some consistency across the payments experience. The author goes on to point out some of the potential advantages of the payment facilitator model such as increased advocacy, lower fees, time savings and an easier customer experience. 

These are detailed inside the posting.  The listed benefits all seem generally logical of course but since the author is discussing field services an example would be helpful for that particular use case. Perhaps we’ll see more as this model grows.

‘As consumer demands and payment processing options continue to increase, field service companies must also increase the amount of digital payment options available to their customers. Understanding which field service softwares are viable options to help provide a great experience for customers while simultaneously growing the business is crucial. Choosing to work with the right payment provider allows for increased advocacy, reduced rates and headaches, and better overall customer satisfaction, all while making sure companies are empowered to succeed through payments.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post Facilitators Can Give Businesses More Control over Payment Processing appeared first on PaymentsJournal.

Today’s Chief Marketing Officers (CMOs) are facing unprecedented pressure and urgency, which is driven in large part by significant change and uncertainty in the consumer and commerce landscape. Amid this change, the role of the CMO is evolving. Gone are the days where they are just the Chief Marketing Officers. They are now responsible for many of the functions typically afforded to roles like Chief Experience Officers, Chief Customer Officers, Chief Commercial Officers, and Chief Revenue Officers.

It’s in this context that CMOs are starting to rely on commerce partners to grow better and faster. In these newly formed relationships, marketers are able to put consumers at the center, prove measurable return on investment, and provide easy to implement omnichannel solutions.

To learn more about the challenges marketers are facing today and how payments partners can help them meet the need for omnichannel experiences, PaymentsJournal sat down with Marcy Campbell, VP of Digital & In-store Commerce, SME Sales and Global Professional Services at PayPal and Ted Iacobuzio, VP and Managing Director of Research at Mercator Advisory Group.

Marketers are facing new challenges

As stated above, the role of the modern CMO is significantly more evolved than it was in years past. Coinciding with their expanding responsibilities are new priorities. “When we look at the marketers’ priorities and how they’ve changed, we’re seeing that the pace of change has significantly impacted their role and that many look at anything in terms of longer-term transformation as a complete luxury,” said Campbell.

Instead, marketers are focused on a few key priorities that drive immediate results including driving revenue, attaining valuable customer insights and accomplishing their goals with fewer resources. A key component of meeting these priorities is the successful implementation of an omnichannel commerce experience.

What is omnichannel commerce done right?

Simply defined, omnichannel commerce is a sales approach that uses multiple channels and payment options to give customers a unified experience across in-store and digital channels. Omnichannel platforms, which often come from payment providers, are tools that enable these omnichannel experiences. Retailers with both storefronts and e-commerce sales can utilize an omnichannel strategy to combine ‘brick’ and ‘click’ and maximize the customer experience.

In the wake of COVID-19, during which many brick-and-mortar retailers shifted some or all of their sales to online channels, an omnichannel experience became increasingly important to CMOs. “What the pandemic has done is it’s demonstrated the inevitability of an omnichannel approach to merchants of all sizes,” said Iacobuzio.

Campbell agreed, adding that “CMOs… are very interested in the omnichannel commerce experience. Now we’re talking to them about how to build a true omnichannel experience by connecting things like loyalty points and understanding who your customer is when they’re on your site and also when they’re off your site.”

Omnichannel commerce experiences can help marketers face these challenges

Payment providers like PayPal have stepped forward to partner with marketers to assist them in acquiring new customers, maximizing customer value, retaining customers, and increasing visit frequency.

One way PayPal is helping merchants is by enabling them to create true omnichannel experiences that seamlessly blend the online and offline experience. “We provide those true omnichannel experiences through QR codes,” explained Campbell. “That is a contactless way for customers to pay in-store using their preferred options, and this includes their PayPal and Venmo balances.”

What’s more, when customers use QR codes, PayPal can prompt them to sign up for or use a merchant’s existing rewards program, making it possible for merchants to seamlessly drive customer frequency and build shopper loyalty with their customers.   

Partnering with an organization that enables a true omnichannel experience also enables merchants to target customers at the right time, through the right channel, with the right message. This results in them reaching new, incremental customers and re-engaging those who haven’t made a recent purchase.

PayPal has already had proven success doing this: one of its merchant partners, a major flower delivery company, leveraged the retargeting marketing tool PayPal Store Cash and saw an over 1000% average return on ad spend.

Finally, payment partners can help merchants maximize customer value and grow their average order value with each transaction. “We just announced our [Buy Now] Pay Later solution Pay in 4 in the U.S. and Pay in 3 in the U.K., and this provides an option for customers to pay in installments instead of in full, which has been really important during these times,” said Campbell.

The takeaway: Payment partnerships give marketers an omnichannel edge

The multiple benefits of partnering with a payments provider that can deploy omnichannel solutions is data-proven. In fact, recent Nielsen research that analyzed the purchase behavior of more than 15,000 online shoppers and surveyed more than 2,800 consumers found that merchants that partnered with PayPal reaped several benefits:

“What this [study] showed was that merchants are able to increase their brand loyalty, drive higher conversions and repeat purchases, and provide an overall better customer experience [by partnering with PayPal],” noted Campbell. “CMOs and marketers should take a look at payments as a differentiator, as part of their toolset, and how they do these things,” she concluded.

The post How Payment Partners Are Helping Marketers to Leverage Omnichannel Platforms appeared first on PaymentsJournal.

For years, the global e-commerce marketplace eBay relied on a full referral model to PayPal to process payments. Sellers around the world were required to open a PayPal account to list and sell items on eBay, and PayPal would fully provision and manage their payments from start to finish.

This lasted for 13 years, during which eBay and PayPal were part of the same parent company. Everything changed in 2015, when the two organizations split into independent standalone businesses. Fast forward five years and eBay is now facilitating the movement of money between buyers and sellers directly on its platform (with some help from its new payment processing partner Adyen).  

To learn more about how eBay modernized its payment processing to better meet the needs of buyers and sellers alike, PaymentsJournal sat down with Alyssa Cutright, VP of Global Payments at eBay.

Global consumers have region-specific payment preferences

While eBay’s years-long arrangement of outsourcing its entire payment stack to PayPal was beneficial to the company for several years, it simply doesn’t live up to the expectations of today’s global consumers.  

These expectations include the ability to buy and sell with an edited choice of relevant and preferred forms of payment. Because eBay is a global company that processes many cross-border transactions, “a big part of ensuring that those buyers have the experience they expect is that when they get to checkout, there’s a familiar form of payment for them to complete the purchase,” said Cutright. 

What these forms of payment are varies around the world. For example, Australian consumers enjoy using Afterpay, a buy now pay later (BNPL) model that enables them to split their payment over a number of interest-free installments. When eBay added Afterpay as a payment option in Australia, there was an immediate and noticeable uptick in adoption.

Meanwhile, bank-based payments, where direct debit payments are pushed directly from a bank account to pay for a transaction, are popular in Germany. As a result, “those are very important forms of payment for [eBay] to have integrated into that market,” explained Cutright.

eBay’s partnership with Adyen improves payment processing

eBay’s commitment to stay on top of the payment trends of local markets and bring new forms of payment to its platform was a major factor in choosing Adyen as its lead payment processing partner.  “[Adyen] has a flexible platform that allows [eBay] to integrate with it for the merchant acquiring process or as a gateway, a connectivity bridge, into other local forms of payment,” said Cutright.

Through the partnership, eBay can offer new payment choices. Consequently, buyers can access their preferred payment choices, creating a more seamless checkout experience. “We’re watching really closely and listening to our buyers to ensure that, at the end of the day, they’re making it to checkout. That’s what’s most important to our sellers. They want the sale, we want the sale, and we want it to be really seamless and really fade into the background,” she added.

Additionally, eBay’s newfound capability to pay sellers directly through its platform comes with another payment processing advantage: enhanced security. “By moving to managing payments on the platform, eBay is investing even more aggressively in fraud prevention,” said Cutright. 

In-house processing allows eBay to remain a top global marketplace  

Ultimately, eBay’s decision to modernize payment processing by partnering with Adyen to manage payments on its own platform has made it possible for the company to meet the expectations of buyers and sellers across the globe.

“Bringing it in house and ensuring that we’re crafting the right experience has been paramount in ensuring that we are coming up to the bar of what buyers and sellers expect and in crafting best in class, next generation experiences in the lens of a modern managed marketplace,” Cutright concluded.

The post eBay’s Upgraded Approach to Payment Processing Meets the Demands of Modern Consumers appeared first on PaymentsJournal.

Nacha is best known as the organization behind the widely used ACH Network, but its work as an organization goes far beyond that. Nacha is also a problem solver and consensus builder, working with the financial services industry to advance innovation and interoperability in the payments system. 

Several years ago, Nacha began researching where improvements could be made regarding electronic payments. It learned that although the movement of money is not a major concern for businesses, pre- and post- payment processes are. Outdated manual processes, lack of automation, and concerns about risk and fraud regarding information sharing plagued the industry.

In response to these findings, Nacha developed a better way for payment information exchange to occur: Phixius. To learn more about the recently launched Phixius platform, PaymentsJournal Editor-in-Chief Ryan McEndarfer spoke with George Throckmorton, Managing Director at Nacha.

What is Phixius?

In February 2020, Nacha announced that it was building Phixius, a blockchain-supported platform that enables the sharing of payment-related information between businesses and streamlines the payments process. More specifically, Phixius facilitates trusted exchanges of pre- and post-payment information between parties. Vetted participants connect directly to Phixius to more securely exchange data, rather than storing and accessing data in a less-secure central repository such as the cloud.

Throckmorton explained that Phixius is considered a platform because it consists of three key elements. “Technology, rules and governance, and a user network are what make up the Phixius platform today,” he said. Phixius uses cutting edge technology via open APIs, distributed ledger, and a common set of rules for its entire network of users.

Phixius is moving payments forward by addressing industry challenges

Through the creation of Phixius, Nacha was able to solve a number of challenges the industry is facing regarding the facilitation of trusted payment-related information exchange. Governance and standardization, interoperability, and fraud prevention and automation are all focus areas of the platform.

Governance and standardization

Today, data exchange between companies is primarily conducted through bilateral agreements, with one of the two companies driving the decision and mandating the type of technology that will be used. This  arrangement can become complicated and time-consuming when companies are attempting to manage hundreds of bilateral agreements with different specifications.

With Phixius, all endpoints communicate with one another through standardized APIs and bilateral agreement with a universal rule set. That rule set lays out the specifications regarding “what happens who is responsible, and the warranties and liabilities that go with that,” noted Throckmorton.

Interoperability

Phixius supports multiple use cases, including interoperability between networks and payment types. “One of the things businesses struggle with today is maintaining their master file, which is a long list of businesses they need to pay or are engaged with,” said Throckmorton. For many companies, this master file contains hundreds or thousands of companies.

“One of the first use cases for Phixius was something that we call the electronic payment information exchange, which is truly a B2B use case,” he added. “So we’re able to do that securely by those two businesses forming what we call a smart contract on the blockchain of Phixius, where they exchange that data without centralizing it.” Because there is no central data stored, each participant can only see interactions and information that is relevant and permissioned to them.

Fraud prevention and automation

The platform was also built with data verification and trust in mind. Data exchanged via APIs can be validated on Phixius. Further, each Phixius participant is vetted and authorized by Nacha as a validated credential service provider.

“In some cases, it’s not about information that a company doesn’t have that it wants. It’s about data it already has that it wants to verify as trustworthy and correct,” explained Throckmorton.

This verification is crucial to reducing risk and fraud. “Verification is also about having good, wholesome payments move through the network and having exception-free payment processing,” noted Throckmorton. The automation of services like essential information verification reduces the amount of manual work companies need to do.

The takeaway

Phixius bridges information exchange for organizations and is one way Nacha is solving the payment industry’s problems of today and tomorrow. The secure information exchange platform will propel innovation across financial institutions. “The basis of what Phixius is trying to solve is creating a better way in which businesses can share pre- and post- payment information. That’s what Phixius does. It makes it easier for companies to do that,” concluded Throckmorton. 

The post How Nacha is Streamlining Payment Information Exchange with Phixius appeared first on PaymentsJournal.

Payment gateways have never been more popular than during COVID-19, and the size of the market is only growing as digital commerce accelerates. With grocery stores, sporting goods manufacturers, and home improvement retailers becoming more essential to the pandemic lifestyle, these, among other merchants, have added to the market size for payment gateways. As a result, online merchants are benefitting from the influx of gateways they can choose to work with.

To learn more about navigating the complexities of payments flows with the help of orchestration, and to discuss Mercator Advisory Group findings on what the crowded payment gateway landscape offers to online merchants PaymentsJournal sat down with Daniel Wideman, VP of Product Management at Spreedly, and Raymond Pucci, Director of Merchant Services at Mercator Advisory Group.

Platforms bring benefits to payments space

Platforms are pushing the payments envelope and services in exciting ways. They are rapidly adapting to this altered way of life, innovating new ways to make recurring online payments and members’ dues models, expanding delivery and order ahead services for restaurants, and even offering payment tools for digital publishers.

“I think what all these platforms have in common,” remarked Wideman, “is that they really allow merchants to focus their resources on the most important areas of business where they can add unique value.” To accelerate time to revenue for merchants, these platforms partner with other platforms that focus on non-core competency tasks.

Now, we’re seeing platforms that enable merchants to more quickly and easily meet new consumer demands for certain services, such as food delivery and home goods. “This is really rapidly moving from nice to have to urgently necessary,” said Wideman. Those that embrace a multi-provider strategy are positioning themselves to grow faster and with more efficiency when using a payments orchestration layer. 

Platform business models and traditional merchants have different payment needs

Merchants are considered to be traditional B2B or B2C businesses, which operate as merchants of record. Merchants of records are businesses that are authorized and held liable by financial institutions to process customers’ card transactions. This differs from a platform, which usually automates a particular aspect of the business and serves as a layer between a merchant and customer.

Platforms are a group of with varying levels of payment, gateway relationships, preexisting vendor relationships, and sophistication. “Platforms are facing additional challenges around flexibility, choice, [and] supporting a wide range of payment providers.”

Payments flexibility is often seen as an important competitive differentiator, specifically platforms that operate as a two-sided marketplace. And with the global expansion of platform merchant databases, the industry wades into the territory of regional compliance, alternative payment methods, and data localizations.

“The difference in business models impact the relative importance and nature of their payment needs,” commented Wideman. For traditional merchants, “the needs range from basic payment enablement [to helping] offload regulatory compliance and reduc[ing] the burden of building and maintaining a payments infrastructure.” More sophisticated and advanced revenue optimization helps to improve success rates by reducing fees and costs and leveraging payments.

Payments orchestration addresses unique consumer needs

With the rapid advancement of new technologies in response to COVID-19 and the change in consumer spending habits, it is crucial for the payments industry to simplify the way it organizes data.

“Solving for merchant acquisition and time-to-value is one of the biggest challenges we’re hearing about from platforms, particularly as those merchants bring their own providers with them,” said Wideman. This means that the providers must continue to work together or risk losing a significant portion of the market.  To do so, they have to design their platform in a way that allows for easy onboarding of merchants and gets them transacting quickly.

Payments orchestrations can help standardize and streamline this onboarding effort, granting merchants the flexibility to maintain relationships with current gateways while continuing to accept consumers’ payments of choice. This gives consumers the confidence in their payments platform’s ability to deliver services by the provider in a universal fashion. “That doesn’t constrain future shifts and choices the merchant may make to optimize their business model,” added Wideman, making orchestrations a best practice for optimizing success.

Takeaway

Payments orchestration is the key to merchant success now and in a post-COVID world.

COVID-19 has altered the payments industry, and there’s no   going back. The pandemic has shifted the implementation of technology in online and point-of-sale payments from a convenience to a necessity.

Fortunately for merchants, they have a wide choice of payment gateway vendors in the U.S. market. While distinguishing among vendors can be difficult, orchestration companies allow for cross-platform gateway and payment service configuration, which creates more opportunities for growth.

Companies are positioned to grow even faster and more efficiently when they use a payments orchestration layer. “Valuable resources are really freed up to focus on customers’ needs [when implementing orchestration],” added Wideman. Orchestration layers make it possible for merchants and platforms to focus on customization and building an optimal stack of providers, technologies, and services, which will allow them to meet the personal requirements of each individual customer.

Orchestration is a valuable tool for integrating various providers and services. In the world that we live in today, “orchestration is not just nice to have, it’s a must have for rapid growth and expansion,” concluded Wideman.  

The post The Rise of Platforms: Managing Complex Payments Flows with Orchestration appeared first on PaymentsJournal.

Every time a customer swipes, inserts, or taps their debit or credit card, it requires an authorization. A successful authorization implies that a bank account or line of credit has sufficient attainable value that can be set aside for a purchase until it is fully processed and the transaction is complete.

If there are not enough funds available to complete the purchase, then the transaction will be declined. The rate of successful transactions help to calculate the authorization rate, or auth rate. But what are auth rates, and why should merchants care about them?

To further discuss this payments industry hot topic, PaymentsJournal sat down with PayPal’s Nandita Gupta, VP of Core Payments Products & Engineering, and Sandipan Chatterjee, Director of Product Management for Auth Rate, Tokenization & Strategic Partnerships.

What are auth rates?

Auth rates are a relatively simple concept, at least in theory. They are the percentage of transactions that successfully pass through the authorization process and result in a completed payment. To identify what this percentage is, you must divide the number of successful payment approvals by the total number of attempted transactions.

Auth rate is not the same as conversion rate, though the two are related and PayPal’s auth rate does contribute to its overall conversion rate. “If the transaction is not authorized, it will not be converted,” said Gupta. “But there are several other factors, outside of the authorization process, which impact the conversion.”

Why are auth rates important to merchants?

Successful merchants have two main goals: increased revenue and customer satisfaction. Auth rates are beneficial to both. They are one of the most crucial ways for businesses of all sizes to tap into revenue and can directly impact the health and success of an online business.

“And for global enterprises, small little improvements and authorization rates can make a difference of billions of dollars of volume process,” added Gupta.  A primary aim for merchants is for customers to complete their transactions on the first attempt without concern over declined authorization or other payment issues.

How does PayPal help merchants improve their auth rates?

There are numerous techniques that PayPal implements to achieve a higher than industry average approval rate for merchants:

1. Robust data system – Relationships with over 300 million consumers and 28 million merchants
2. Next generation risk solution – Helps approve high quality consumers to eliminate fraud attempts
3. Multiple funding instruments – If initial funds are declined, other payment options are readily available to the consumer
4. Network tokenization – A unique credential that’s generated to help make a secure payment

PayPal’s data system is particularly important in the improvement of merchants’ auth rates because its partners provide insights into current behaviors and adoption rates across the broader ecosystem.

Its next-gen risk solution works by using risk algorithms—a combination of machine learning, AI, and real-time decision making—to more accurately approve high-quality consumers. “But machine learning is only as good as the data set it is learning from,” remarked Chatterjee. “And that is where we have a strong advantage, due to the data from our two-sided network of consumers and merchants.”

PayPal’s wallet enables secondary funding instruments, which can be beneficial for when the initial payment method is declined. “If you have your credit card, and that gets declined, we can in certain cases automatically move on and find your debit card to see if that payment method goes through,” explained Gupta. When used effectively, this option can lead to high approval rates.

Finally, network tokenization works by creating a unique credential that is different from the 16-digit number imprinted on consumer credit cards, and that credential now has the capability to be used for transactions. “This is really valuable in the case that a card has expired [or was] lost, stolen, or even breached at another merchant,” added Gupta. Because the network token is automatically updated by PayPal, the customer can continue to make secure purchases without any inconveniences.

The post What Are Authorization Rates and Why Are They Important to Merchants? appeared first on PaymentsJournal.

In the e-commerce world, merchants are fighting a constant and often uphill battle to attract customers. How can you improve authorization rates?

In addition to facing stiff competition from other online retailers, merchants must contend with high rates of checkout abandonment, which is when a consumer has initiated the checkout process but leaves before completing the purchase. In 2018, nearly 75% of online shopping orders were abandoned.

In such an environment, merchants are constantly updating their websites to attract and retain customers and increase purchasing volumes. But this approach of optimizing the front-end of an e-commerce platform is only part of what merchants could and should be doing to drive revenue.

For e-commerce merchants interested in learning what other methods exist for maximizing revenue potential, a recent cobranded white paper from PayPal and Mercator Advisory Group is a good place to start. Titled “Are You Maximizing Your Revenue Potential?”, the paper outlines how payments optimization on the back-end can drive sales and lead to significant revenue increases.

Supporting the customer’s preferred payment method is important…

The first component of payment optimization involves supporting a variety of payment methods. When a customer makes it to the checkout window, they should be allowed to pay with their preferred payment method.

Consumers want to use their preferred payment method because, as the white paper noted, “it eliminates the need to type in payment and personal information, and it is a highly trusted instrument that makes the consumer feel more secure completing a purchase.”

In fact, if they are not able to pay via the method they want, Mercator’s research indicates that it’s common for the consumer to simply abandon the order. According to the white paper, “when a preferred payment method or brand isn’t available, the site will experience a larger than usual cart abandonment rate, ranging from 4% to 10%.”

Therefore, merchants need to configure their website to support traditional methods such as credit and debit cards, in addition to emerging payment types. These include mobile wallets and international forms of payment. Further, the merchant should securely store the customer’s payment information so they do not need to re-enter the information on future purchases.

By offering multiple payment methods and convenient, yet secure, autofill functionality, merchants can reduce cart abandonment and improve the customer experience.

…But improving the conversion process during payments acceptance cannot be overlooked

Once a merchant supports multiple payment methods, they should then focus on improving an overlooked but vitally important part of the payments process: payment acceptance.

For a payment to be completed, it must be authorized by the consumer’s card network and their card’s issuing bank. Here, there are two outcomes: the payment is either accepted or declined. If a customer has their transaction declined, they will be asked to enter an alternative form of payment. Facing a declined transaction, many consumers will abandon the transaction.

Although there are times when a decline is valid—when the customer has insufficient funds or a transaction is high-risk and likely fraudulent—false declines are possible too. It is here that many merchants are leaving money on the table. One study found that 44% of falsely declined consumers either stopped or reduced shopping with that retailer.

There are many reasons a transaction could be falsely declined, but here are the major ones:

• Overly strict fraud rules: Overzealous fraud prevention systems run the risk of rejecting legitimate transactions.
• Outdated card and customer information: It’s common for old card numbers and other outdated data to cause false declines.
• Cross-border payment risk assessment: Cross-border transactions are more complex to verify because international cards often operate on local or regional foreign networks that are not connected to global networks.
• Transactions processed in “high risk” or “less mature” markets: Some international locations experience higher rates of decline than other locations. In Brazil, for example, 12% decline rates are normal.
• Data is not communicated properly: Since the messaging standards used by payment networks are designed for speed, they limit the information that can be sent when a payment is being processed. Authorizing banks are also frequently changing their individual standards for the type of information required to approve a transaction.
• Sub-optimal routing strategy: The chance of a decline can increase if payments are routed through the wrong processing channels. The type of transaction, dollar amount, location of origin, and other factors influence how a payment should be routed.
• Not understanding the root causes of declines: Oftentimes, merchants will not even know why a transaction is declined. This limits their ability to reduce false declines.

These factors influence a merchant’s authorization rate, which is “calculated by dividing all the card transactions that were accepted by the total number of transactions submitted.” The higher the rate, the more revenue the merchants stands to make.

Improving authorization rates can boost revenue

With so many ways for a transaction to be falsely declined, there are a lot of opportunities for a merchant to lose sales. Therefore, even a minor improvement in authorization rates can lead to significant revenue increase.

The white paper described an example where a website has 100 million site visits annually and an average transaction amount of $100. If that site introduced better payment methods such that it increased conversions by just 2%, it could increase annual revenue by more than $3.4 million. Moreover, if the merchant optimized the processing component and boosted approvals by another 2%, it would earn “$1.5 million in previously unrealized revenue.”

Clearly, there is a lot of money on the line. As the white paper put it, “Optimizing processing to boost approval rates is a critical opportunity to capture more revenue, and something that every merchant, small, medium or large, should consider.”

Fortunately, all the pain points identified above can be addressed by a good payment service provider.

Conclusion

While this article sketches out the reasons a transaction can be falsely declined and why limiting false declines can greatly benefit merchants, it does not cover the specific ways merchants can optimize the payment process and improve authorization rates. Those interested in learning what solutions exist can download the PayPal and Mercator Advisory Group cobranded white paper by filing out the form below.

The post REPORT: Authorization Rates & Unrealized Revenue: How Merchants Are Leaving Money on the Table appeared first on PaymentsJournal.

The deal is done. Having received the necessary regulatory approvals, Worldline’s big acquisition of Ingenico has closed. The immediate impact will be felt in the European region given the French roots of both companies. But this merger has significant implications for the U.S. payments market.

Worldline has lacked a noticeable U.S. presence for its merchant acquiring and processing business. Now Ingenico’s large U.S. merchant base gives Worldline an immediate beachhead for the U.S. market. Worldline will also strongly compete in the growing payment gateway space for e-commerce transactions as well. Existing U.S. payments players will defend their turf, but now there is a major competitor showing up on their radar; perhaps even one that is closer than it appears.

The following excerpt from a Mobile Payments Today article reports more on the topic:

Global payments provider Worldline has acquired Ingenico Group for an undisclosed sum, creating the largest European payment services provider, according to a press release. Hélène Carlander, Ingenico Group global press officer, told this website via email the acquisition has been finalized, Worldline having announced last month it received merger control clearance from the European Commission.

The merger of the two France-based companies will provide a wider range of digital payment capabilities through integrated payment solutions, improved technology, enhanced innovation capabilities and an extended global footprint, according to the press release.

“Having the scale and now global capabilities, we have reshaped our group entirely in order to support, now more than ever, our clients, merchants and banks in particular, enabling them to rely on state-of-the-art electronic payment services to accelerate their own growth as well as their digital transformation strategy,” Gilles Grapinet, chairman and CEO of Worldline, said in the press release. “Despite the difficult times we are all facing at the moment, I have never been this confident in the group’s potential and future and in its 20,000 employees.”

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Worldline and Ingenico Close Payments Mega-Deal appeared first on PaymentsJournal.

PCI non-compliance fees have become common-place, but are processors truly considering the long term effects of such fees?

Ranging from $240 to $750 per merchant per year, smaller businesses are charged for failure to establish PCI compliance in a timely fashion through the various available self-service programs. While this seems like a suitable short-term solution to prompt a merchant to take action, it carries many shortcomings because it doesn’t tackle the main issues that caused non-compliance to happen in the first place.

It is not that merchants are being lazy or forgetting to fill out their Self-Assessment Questionnaire (SAQ), rather it’s the result of a flawed process and simply hitting them with an additional charge doesn’t solve the problem. The reality is, many smaller businesses simply do not have the time, resources or knowledge to achieve, and then maintain PCI compliance and so they continue to pay the non-compliance fee month after month, which does nothing to improve the security of their business.

A win for processors but not so much for merchants

Understandably, processors have been reluctant to stop charging these fees as they make for a lucrative source of short-term revenue. However, the long-term effects can be extremely detrimental, the practice of non-compliance fees for merchants is causing the industry to lose money in the long-term.

So, this begs the question are non-compliance fees simply creating a false economy?

Keeping a balance where everyone wins

There might be a trick, however, to keeping revenue streams high while ensuring compliance comes from ensuring a balance is held between the two. Programs that improve the merchant experience by removing the compliance burden and proactively addressing issues in security have a positive impact on merchant churn, increasing lifetime value (LTV) and negating the effects of dropping non-compliance fee revenue. Non-compliance fees have a place and can be hefty enough to prompt real action from a merchant, but only if a viable alternative is available to merchants.

Ultimately, processors need to keep merchants loyal to ensure a recurring revenue that is critical to the health and growth of a company, as when a merchant cancels an account, processors must consider the multiple-year(s) of lost revenue that you now have to replace by signing up a new merchant.

But how can this be achieved when trying to keep the status quo for both merchant and payment processor? To find out more around the questions posed here, download Sysnet’s full whitepaper here. 

The post PCI Compliance, Revenue, and Reducing Attrition: Maintaining the Status Quo between Processors and Merchants appeared first on PaymentsJournal.

Big news item as Alliance Data shifts to Fiserv.

Alliance Data is one of the top lenders in the private label credit card space and faces Synchrony, Citi Retail Services, and Capital One PLCC.  Mercator Advisory Group covered the industry in this recent Research Report.

Alliance Data recently changed executive management after a series of bumps in the road, tapping Ralph Andretta, formerly of Citi, to run the business. The timing was perfect for the management change, particularly since Alliance Data is contending with the floundering U.S. retail market and the impact of COVID-19 on sales and credit quality.

The announcement explains the processing change.

• “The strategic partnership announced today reflects our commitment to invest in competitive technology and provide greater value and service to our brand partners and their customers,” said Ralph Andretta, president and chief executive officer, Alliance Data. “Our robust suite of payment products, industry-leading data and analytics capabilities and turnkey credit marketing services, combined with a modern, flexible and scalable platform from Fiserv, will allow Alliance Data to achieve greater agility and speed-to-market for a variety of new, innovative products and solutions.”

And Fiserv’s CEO comments:

• “We are honored to support Alliance Data, a premier payment solutions provider, as they make this important strategic move as part of their broader technology modernization initiatives,” said Frank Bisignano, president, and chief executive officer, Fiserv.

The release also quotes Nick Barnes, whom I know from his days at ACI Worldwide.

• “By leveraging the resiliency, scalability, and operational efficiencies gained through the Fiserv relationship, we are able to provide new, more compelling tools for our brand partners and their customers,” said Nick Barnes, chief information officer, Alliance Data. “As part of broader technology modernization efforts, this partnership allows us to be more nimble, manage risk more effectively, and leverage efficiencies gained to focus on the strategic aspects of our business.”

Fiserv’s latest win is notable. It is an indicator of how well the First Data/Fiserv integration is going; it places Alliance Data in a position that will serve it well as the economy recovers, and as a Fiserv exec says, “We are proud to add them as a client.”

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

The post Alliance Data Selects Fiserv for Credit Processing appeared first on PaymentsJournal.

Mastercard will make a financial investment in Marqeta as the two companies look to deepen their global partnership and collaboration

Marqeta, the global modern card issuing platform, and Mastercard today announced an extended global partnership to expand into new geographies, open access to new products, and launch additional card programs together. As part of this partnership, Mastercard has also made a financial investment in Marqeta.

This new agreement represents a deeper global collaboration between Marqeta and Mastercard. Since 2014, Marqeta and Mastercard have been working together to help fintechs, digital banks and commerce disruptors across North America and Europe bring innovative card products and programs to market. Beginning in Asia Pacific, the two companies will expand their collaboration into multiple new geographies, optimizing for global scale and driving efficiencies across their businesses to better serve the market. Mastercard will help expedite Marqeta’s international expansion by streamlining its global network certification process, which governs which providers are allowed to process payments internationally through the Mastercard network.

“With a shared vision to provide innovative and flexible financial products and solutions to our customers, we’re thrilled to expand our partnership with Marqeta,” said Sherri Haymond, executive vice president, Digital Partnerships at Mastercard. “We look forward to collaborating with Marqeta through this next stage of growth and enabling our joint partners to tap into capabilities that deliver differentiated experiences.”

The two companies plan to collaborate to open access to Mastercard products for Marqeta customers and partner closely on future products, with an emphasis on expanding and launching more card programs together. Marqeta will also participate in Mastercard’s digital enablement programs, like Digital First and Fintech Express, to help accelerate time to market for newer startups.

Working together, Mastercard and Marqeta have already helped bring several new card products to market, including industry-first innovations like the Square Card.

“With Square Card, we were looking to do something that hadn’t been done before – providing small businesses instant access to their sales earnings through a business debit card,” said Christopher Sweetland, Head of Industry Relations and Payments Operations at Square. “We needed the right flexible and modern card issuing platform, and the right future-focused network partnerships to make this happen. Marqeta and Mastercard were a huge part in helping us launch and scale this program so successfully, and we’re excited to see them accelerate and grow this partnership globally.”

“Mastercard’s investment in Marqeta is a significant validation of the power of modern card issuing and the strength of our technology, and their global presence and expertise makes them an invaluable partner,” said Jason Gardner, founder and CEO at Marqeta. “Mastercard’s culture of innovation and strong focus on social initiatives makes them a great DNA fit for Marqeta, and we’re excited to accelerate this relationship with our new global partnership.”

FT Partners served as the exclusive strategic and financial advisor to Marqeta and its board of directors in the financial investment transaction.

The post Mastercard and Marqeta Expand Strategic Global Partnership appeared first on PaymentsJournal.

The payments industry continues to expand and evolve at a rapid pace. With the rapid rise in e-commerce and online banking, digital transaction volume is increasing exponentially. This, in turn, affects what organizations are looking for in a payments processor. They are looking for an experienced processing partner that understands the evolving payments industry and meets all of their needs for speed, reliability, scalability, security, and global reach.

• Speed

When choosing a processor, merchants look for a partner that can get them up and running quickly, integrate new features with speed and ease, and efficiently respond to their service needs. Time to market is critical for merchants looking to offer consumers new experiences or take advantage of new opportunities in response to changing market trends

• Reliability

Businesses depend on transactions being processed and funds being deposited into their accounts on time every time. Technological glitches that interrupt service or delay the availability of funds can be problematic. If a processor is down, and a merchant is even temporarily unable to accept non-cash payments, sales will be affected.

• Scalability

Increasingly complex transactions require the ability to store and process large volumes of data. Whether planning for growth or wanting to add new features, flexibility is essential. Increases in processing demand must be met in real time. A platform that is not scalable will be unable to meet the demands of a dynamic industry.

• Security

The payments industry is a popular target for fraudulent actors because of the wealth of sensitive data that criminals hope to use to their advantage. Increasingly sophisticated attacks require processors with experience and expertise to detect fraud and prevent losses.

Tokenization is now considered a best practice for PCI compliance to reduce security risk. Sensitive data such as a bank account or credit card number is replaced with a random string of characters called a token. The token is useless to fraudulent actors.

• Global Reach

Global merchants accept many different payment products. Having a system that can automatically recognize a payment product from the account number is beneficial. A smooth transaction increases customer satisfaction making it more likely that the customer will become a repeat user.

Meeting Consumer Demands: A Modern Front Door to Payments

We took a look at Access Worldpay and found that it offers a comprehensive solution that solves the challenges of the dynamic payments industry.

When it came to speed, Access Worldpay delivers modern APIs and user friendly software development kits to quickly showcase new payment options so merchants can take advantage of additional sales channels. By completing API’s in single calls via a single integration point, Worldpay can lowers client costs.  

Data is organized in a way that is easily readable by humans and machines. Merchants are able to integrate their payment systems into the gateway in days, not weeks

The cloud based global network provides constant accessibility and reliability. If a data center is unavailable, the request is immediately routed to an alternate server in the network. The result is the highest level of availability to merchants, ensuring that sales are not delayed or lost.

Next we looked at scalability. Understanding that legacy payment platforms can be very hard to alter or scale to meet evolving consumer demands, Worldpay built a new system from scratch.

Notably, the flexible platform design can keep pace with the expanding, dynamic industry. Built for growth with RESTful APIs, Access Worldpay’s payments platform features a compartmentalized, scalable architecture. Modifications can be made and new features can be added without interrupting service with the flip of a switch.

With respect to security, Access Worldpay has a single entry point which handles the routing complexity behind the scenes and allows your business to keep more revenue by opening the door to leading edge security, fraud and loss mitigation solutions.

With the most extensive global reach of any payments processor, Worldpay offers services in over 120 currencies and has a relationship with banks in markets across the world. Unlike their competitors who have to cobble a network together, Worldpay can offer an existing global reach to merchants at lower costs, making Access Worldpay the right option for the largest global businesses.

The Takeaway

Merchants are always looking for ways to improve customer experience and remove obstacles that frustrate consumers and turn them away. Having a smooth checkout process that provides a variety of payment options is essential. Finding the right payments processor to meet the evolving demands and expectations of customers can add to the bottom line.

“Merchants now have multiple sales platforms to align with the needs of today’s hybrid consumer who shops, orders, and pays across in-store, mobile, and e-commerce portals,” added Raymond Pucci, Director of Merchant Services at Mercator Advisory Group. “Now these merchants look to their payment providers to give them solutions that offer scale, shopping platform integration, and cloud-based technology that offers agile and cost effective ways to handle various payment methods and channels.”

The post Opening the Door to the Future of E-commerce Payment Capabilities: Access Worldpay appeared first on PaymentsJournal.

In the payments industry, data can be  just as important as the payment transaction itself. The trick is having a payment processor that can collect data and present it to merchants in a way that offers to add value to not only them, but their customers as well. But there is something that makes it possible for retailers to leverage data responsibly: Cloud technology, which has transformed the technology landscape over the past decade.

To learn more about how legacy payment processing systems create a disadvantage for retailers — and what the cloud has to offer —PaymentsJournal spoke with Scotty Perkins, Senior VP of Product Innovation at Quisitive LedgerPay, and Dan Devlin, Quisitive LedgerPay’s Senior VP of Operations, along with Raymond Pucci, Director of Merchant Services at Mercator Advisory Group.

Legacy payment processing technology isn’t up to par

Historically, payment processing has been based on multi-layered legacy technology that is largely commoditized and not particularly innovative. Further, much of the innovation that has happened has occurred outside of core processing capabilities. As a result, legacy payment processing systems that were built exclusively to process payments can only handle a very small amount of data and offer few additional capabilities.

This significantly limits retailers and merchants from being able to leverage the data to better serve customers and drive revenue growth. Beyond that, many merchants don’t believe that they are getting the maximum value out of their processor. Payment processing often involves a number of bundled fees for a service that, while essential, is relatively basic. The result: Payment processing is viewed by retailers as little more than a necessary but costly evil.

This doesn’t have to be the case. Cloud technology can bring new efficiencies to the process while creating opportunities for merchants to better serve customers. “There are opportunities to take advantage of efficiencies in the cloud that can bring cost efficiency to traditional payment processing,” said Perkins, “But the real advantages are increased security, faster access to data, and an infrastructure that is essentially future proofed in a rapidly changing technology landscape. Pucci agreed, adding that because processing costs are a major pain point for merchants, they “are all in on whatever new technology can bring cost efficiency to the process.” 

How retailers benefit by implementing cloud processing infrastructure

In order to leverage data, merchants need access to integrated information about both the payment itself and information about the transaction around it. That’s where the power of the cloud and machine learning (ML) comes in. When combined, the cloud and ML enable an entirely new level of access to advanced modeling, predictive analytics, and real-time data deployment. After all, “traditional 40-year old payment processing orchestration for credit or debit cards doesn’t know anything about machine learning,” explained Perkins.

With access to these advanced tools, merchants  can not only manage payments data securely and responsibly, but also take advantage of transactional information to help them make informed decisions on offerings and promotions to customers.  “Consumers want personalized marketing offers, and there’s so much that can be gleaned from a traditional payment transaction for future payment and shopping behaviors,” added Pucci.

In many cases, merchants aren’t even aware of what can be accomplished with this transaction data. Many retailers, particularly small and medium sized players, have been unable to work with – or integrate – vendors that can help supply them with access and analytics to the rich data every payment transaction contains. Companies like Quisitive LedgerPay have worked to change this reality.

LedgerPay wants to help merchants get up to speed

Online retailers have long worked to customize the customer experience in ways that aren’t possible for brick and mortar stores. By virtue of having browser information, the ability to see what shoppers looked at and what they actually bought, and key identifiers like name, address, email and phone numbers, e-tailers have a wealth of data that can be leveraged to develop personalized promotions based on a shopper’s preferences,  But traditional brick and mortar merchants are blind to what individual customers consider and/or purchase while they are in their stores. Loyalty programs can help, but these usually have low penetration rates and typically reflect the patterns of a retailer’s most loyal customers.

That’s where Quisitive LedgerPay comes in. “The value proposition that we bring is that we collect all of that data from every transaction that can be piped into any analytics tool that a merchant wants,” Devlin said. “By linking purchasing patterns to individual cards, the merchant can recognize an individual consumer’s preferences within a category and then deliver  a promotion that has been tailored just for them. As simple as this may sound, it just isn’t something that traditional payment processors were built to do.”

Merchants don’t have to onboard customers into a loyalty program to access this valuable information. Rather, LedgerPay’s payment processing and payments intelligence solution is agnostic and compatible with any electronic card processed in-store at the point-of-sale. By creating a lens into a customer’s behaviors and purchase pattern through their card-based payment, merchants can gain a high degree of awareness of who they are and what they like to buy, then use that knowledge to personalize future customer experiences.

The takeaway 

Legacy payment processing technology is ill-equipped to help retailers in the modern world. Those that switch to cloud-based solutions can access data that offers actionable insights to drive down processing costs and offer their customers personalized, custom experiences. One such solution, Quisitive LedgerPay’s payment intelligence platform, allows merchants to capture and create customer profiles based on their historical and real-time behaviors. 

The post Payment Processing’s Hidden Problems: Why it’s Time for Retailers to Switch to the Cloud appeared first on PaymentsJournal.

Akerna (Nasdaq: KERN), a leading compliance technology provider and developer of the cannabis industry’s first seed-to-sale enterprise resource planning (ERP) software technology (MJ Platform®), has signed an agreement with Priority Technology Holdings, Inc. (Nasdaq: PRTH) to provide CBD and Hemp retailers that use Akerna’s MJ Platform with a credit card payment processing solution. As part of the agreement, Akerna and Priority Technology Holdings will share in payment transaction revenue.

Find out if MJ Platform with Payments is Right for Your Business: Learn More

CBD is derived from hemp and is legal in the United States as long as it contains less than 0.3% THC. Nevertheless, there is confusion about this industry and these products. Integrating with a specialty merchant services provider, like Priority, is critical to the long-term success of the industry.

Key Facts about The CBD and Hemp Market:

• CBD is an industry poised to reach $16 billion in revenue by 2025. The CBD therapeutics segment alone is on track to earn $9.30 billion in 2026, growing at a compound annual growth rate (CAGR) of 27.4%
• In 2018, investment firm Cowen, Inc.  stated that retail sales of CBD consumer products in the U.S. ranged from $600 million-$2 billion
• Brightfield Group anticipates global CBD sales will grow to approximately $22 billion by 2022
• According to a 2019 MarketandMarkets report, the Industrial Hemp Market is projected to grow from $4.6 billion in 2019 to $26.6 billion by 2025, growing at a CAGR of 34.0% during the forecast period
• The major factors driving growth in the hemp market include increasing legalization in the cultivation of industrial hemp, functional properties of hemp seed and hemp seed oil, and their growing use in different food applications, and chronic diseases

“Akerna’s technology solutions take a comprehensive approach to helping operators across all sectors of the industry increase efficiency through compliance, precise inventory visibility, and streamlined operations at every point in the supply chain,” said Jessica Billingsley, chief executive officer, Akerna. “With this solution, we are making it easier for our CBD and hemp clients to process payments. With this agreement, we are also well positioned to activate payment solutions through Priority for traditional cannabis sales pending legislative action at the federal level.”

Although federal action is uncertain, at the state level there are 12 cannabis-related ballot initiatives up for a vote in November. The 12 initiatives are the most since the last presidential election in which eight of the nine measures up for consideration passed.

Value to CBD and Hemp Clients

With Priority’s integrated into MJ Platform, CBD and hemp clients no longer need to use an additional or separate payment processing system. The Priority solution supports ACH, card-not-present, recurring payments, and automatic credit card information updates. The integration also allows end-users to enroll and use Priority’s payment processing without leaving MJ Platform.

“We are excited to collaborate with the Akerna team to bring a truly seamless payment and revenue activation experience to the CBD and Hemp industry” noted Tom Priore, Priority CEO. “Akerna recognized that our agile platform can effectively integrate both point of sale and vendor payment solutions together with analytical features into their application coupled with our robust compliance and market-leading client service will free them to focus on their customer experience and respond to market needs.” 

Availability

• Existing MJ Platform CBD and hemp clients can contact their customer success manager or account executive to sign up to use payment processing
• New CBD and hemp retailers can contact MJ Freeway to learn if MJ Platform with payments is the right solution for their business.
• Canadian retail clients can also use the integrated payment solution.

About Akerna

Akerna is a global regulatory compliance technology company in the cannabis space. Akerna’s service offerings include MJ Platform^®, Leaf Data Systems^®, solo sciences tech platform, Trellis and Ample Organics. Since its establishment in 2010, the company has tracked more than $18 billion in cannabis sales. Akerna is based in Denver. For more information please visit akerna.com.

About Priority Technology Holdings, Inc.

Priority is a leading provider of merchant acquiring, integrated payment software and commercial payment solutions, offering unique product and service capabilities to its merchant network and distribution partners. Priority’s enterprise operates from a purpose-built business platform that includes tailored customer service offerings and bespoke technology development, allowing the Company to provide end-to-end solutions for payment and payment-adjacent opportunities. Additional information can be found at www.PRTH.com.

Forward-Looking Statements

Certain statements made in this release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements include but are not limited to statements regarding market forecasts and growth projections for the CBD and Hemp markets, the potential benefits to CBD and hemp clients of the integration of payment processing by Priority Technology Holdings and MJ Platform, future action regarding traditional cannabis at the federal and state levels, the ability of the MJ Platform team to help operators across all sectors of the industry increase efficiency through compliance, precise inventory visibility, and streamlined operations at every point in the supply chain, sustained increases in demand for cannabis and the ability of the MJ Platform team to help operators make decisions through analytics and reporting. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of significant known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside PRTH’s and  Akerna’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others that may affect actual results or outcomes, include (i) PRTH or Akerna’s ability to maintain relationships with customers and suppliers and retain its management and key employees, (ii) changes in applicable laws or regulations, (iii) changes in the market place due to the coronavirus pandemic or other market factors, (iv) and other risks and uncertainties disclosed from time to time in PRTH’s and Akerna’s filings with the U.S. Securities and Exchange Commission, including those under “Risk Factors” therein.  You are cautioned not to place undue reliance on forward-looking statements. All information herein speaks only as of the date hereof, in the case of information about PRTH or Akerna, or the date of such information, in the case of information from persons other than PRTH or Akerna. PRTH and Akerna undertake no duty to update or revise the information contained herein. Forecasts and estimates regarding PRTH’s or Akerna’s industry and end markets are based on sources believed to be reliable; however, there can be no assurance these forecasts and estimates will prove accurate in whole or in part.

The post Akerna Signs Agreement with Priority Technology Holdings appeared first on PaymentsJournal.

Payments innovation is no longer driven by huge banks with coast-to-coast branch networks but by smaller, entrepreneurial providers with the vision and passion to democratize payments and embed them into business operations.

But how do these startups, innovators, and smaller providers get into the game in a way and at a cost that’s accessible? To answer that question and learn more about how the new Galileo Instant Solution helps businesses support gig workers, PaymentsJournal sat down with Cole Wilkes, Managing Director, Galileo Instant at Galileo Financial Technologies and Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group. 

The U.S. gig economy

While there’s no universal definition of what qualifies as gig work, there have been studies that have attempted to measure the size of the 1099/gig economy workforce in the United States. Even studies using the most restrictive definition of what qualifies as gig work estimate the gig workforce to be at least 26 million people strong. High estimates have measured the gig workforce to hover around 57 million individuals.

The wide range of estimates, explained Grotta, is due to “a variation in what really constitutes a gig worker.” There are also different segments of the gig industry. Some individuals use gig work to supplement their traditional jobs, while others do occasional freelancing on the side; some consider themselves business owners, and others are working for a single employer as a contracted worker. Regardless of the exact number, Grotta added, “This is a really big market—and one that requires unique payment solutions.”

The gig economy gap

Gig economy workers have traditionally relied on legacy payment methods, such as paper checks and ACH payments, to receive compensation. But these forms of payment are plagued with latency, infrequency, and inaccessible funds.

In other words, legacy payment methods are not meeting gig workers’ needs, particularly when gig workers are stuck waiting for their next paycheck. “In some cases, [their payment] is as infrequent as once a quarter,” noted Wilkes. “With the dependence on physical checks, there is a lot of room for improvement.”

As a result, non-fintech businesses are now expressing interest in creating their own cards and accounts for customers and workers to alleviate a pain point for gig workers by enabling them to get paid and transact in new and innovative ways.

Galileo Instant

Considering the needs of gig workers—such as Uber drivers, contract workers, YouTubers, and Instagram influencers, among others—Galileo set out to offer a solution that aligns with the payment needs of today’s gig workers. That’s why it developed its new solution, Galileo Instant, with the goal of removing friction for fintech innovators and those looking to issue payment cards without being in the payments business.

“With Instant, Galileo created a way to enable businesses to provide their own card account and pay these individuals in real time—on a per gig or per stream basis—giving them access to their funds as the income is generated,” added Wilkes.

Instant is an end-to-end API platform that makes it easy for non-fintechs and startups to create digital banking and branded card experiences. And it’s a game-changing solution for businesses that don’t necessarily see payments as central to their core offerings, but recognize the value of offering a convenient, branded card solution.

The differentiator is its speed

A key component of Instant is speed of implementation. Typically, it can take months for a business to put digital banking and branded card capabilities in place, but with Instant, deployment can be reduced to as few as 14 days. “To have an out-of-the-box solution enabled within such a short timeframe provides a way for businesses looking to get to market or create their financial products quickly,” explained Wilkes.

Instant was built directly on Galileo’s proven payments platform and utilizes features of its powerful APIs, ensuring that scalability, security, and stability are inherent in the platform. This means that if an organization quickly gets to market and sees high adoption rates, Instant can easily accommodate and scale in parallel with that business.

Conclusion

Consumers are demanding more flexible ways of being paid and businesses need to recognize and adapt to this demand or they could find their workforce leave for an organization that meets their needs. At the same time organizations need to make sure that the process they enable is going to be reliable, fast, and can scale as the organization’s needs change.

In response to this market need, Galileo launched Instant to enable fintechs, startups, and other innovative businesses to create branded payment cards and offer digital banking experiences to customers and employees. In addition to streamlining the card creation process, the Instant API is revolutionary for its ability to support businesses launching card programs in as few as 14 days, start to finish.

The post Driving Gig Economy Innovation with a Digital Banking Platform appeared first on PaymentsJournal.

Even before COVID-19 started to spread, dispute management had become an important aspect of the payments industry. When a consumer contests a transaction, the mechanism for resolving the chargeback can make a considerable difference in the company’s operating costs and reputation.

But with the pandemic disrupting entire industries and changing the way consumers transact, dispute management has become even more important.

To provide payments professionals with a better understanding of dispute management, Mercator Advisory Group partnered with BHMI to host a webinar on the topic. During the webinar, Brian Riley, director of Credit Advisory Services at Mercator, spoke with Casey Scheer, director of Marketing and Sales at BHMI. They discussed why dispute management is important and what tools exist to help companies handle this complex process.

“An unprecedented time in payments”

Prior to COVID-19’s sudden spread around the world, the number of disputed transactions was high. Mercator Advisory Group estimated that there are currently 25 million transactions disputed each year.

Complicating matters for these parties is the fact that transaction volume in the payments industry is growing. This is important because as the number of overall transactions goes up, the number of chargebacks goes up linearly as well, explained Riley.

Mercator predicts that by 2022, there will be as many as 33 million disputed transactions annually, out of 66 billion total transactions. With COVID-19 added to the mix, it’s hard to predict with certainty how disputes will be impacted. “We’re really at an unprecedented time in payments today with COVID-19,” noted Riley.

However, it is plausible that the pandemic could cause disputes to increase in frequency, especially in certain industries. While chargebacks have dropped in industries such as hospitality and travel—due to these businesses cratering under lockdowns and decreased consumer interest—other industries have seen an uptick in traffic. E-commerce, for example, has surged with physical stores closed and consumers stuck at home.

To demonstrate how COVID-19 is influencing dispute volumes, Riley and Scheer conducted an informal poll of those participating in the webinar, many of whom are payments professionals who handle disputes for their respective companies. The poll asked if dispute volumes have increased since COVID-19. Of all those who answered, 68% responded that the volume of disputes has increased. For 40% of respondents, dispute volumes have increased anywhere between 10% and 50% compared to pre-COVID levels.

Although the poll does not definitively reveal dispute volume trends across the entire payments industry, it does indicate that COVID-19 has resulted in more disputes for many businesses. No matter the amount of disputes, companies should take disputes seriously.

The many costs of disputes

Although disputes only comprise a sliver of total transaction volumes, the immense volume of transactions is large enough to make disputes a costly issue for a variety of reasons. Riley pointed out that the immediate problem is that irrefutability of a payment is a core feature of the payments industry.

“As an industry, we want these transactions to be irrefutable and clean,” said Riley. Therefore, contested payments need to be resolved. To resolve a dispute, issuers and merchants must spend time and money establishing whether the transaction was legitimate or not. For many companies, this often requires teams of people working exclusively on disputes.

Scheer explained that BHMI’s research revealed that dispute management can consume as much as 20% of the operating budget of a company processing payments. As the number of disputes creeps upwards, the amount of time and money needed to resolve them will increase as well.

But there are also reputational harms. If an issuer or merchant is perceived as incompetent or unjust by consumers, its reputation will be adversely impacted. In such a situation, consumers may take their business elsewhere, turning a reputational cost into a financial one.

Attrition rates, the number of consumers who stop using a service or product, is already a problem in the credit industry. In the United States, for example, the attrition rate for cardholders is about 15% a year, noted Riley. Since “it costs about $275 to book a new customer, keeping them happy is essential,” he continued.

Effective dispute management solutions: Technology is key

Riley broke an effective dispute management process into three components: management, function, and process.

The management component entails enabling clients to communicate about and view disputed transactions. When it comes to the function, Riley stressed the importance of accessing real-time data to evaluate a dispute. Also important is having automated notifications and alerts, in addition to having an engineered workflow that complies with network rules and regulations.

Both Scheer and Riley emphasized the importance of understanding the card networks’ rules and regulations around chargebacks. Each network has its own rules and dispute codes. This means that an effective dispute solution needs to be able to fluidly navigate the differing rules and regulations.

Since the networks can change their rules—as both Visa and Mastercard have recently done—companies need to stay up to date. Scheer recounted how one company spent over 10,000 hours updating its system to support Visa’s new regulations.

Regarding the process component of a dispute management solution, Riley highlighted how the solution needs to be fully integrated into the payments procedures and workflows of the company. Moreover, the solution needs to provide reports and track milestones so companies can better understand how the dispute process is working.

BHMI’s Concourse – Disputes™

Toward the end of webinar, Scheer and Riley discussed how BHMI’s dispute management solution can help companies, including both acquirers and issuers, effectively manage chargebacks. Concourse—Disputes™ is a comprehensive workflow management system that automates the time consuming tasks required to resolve disputes.

BHMI’s solution “guides the user step by step through the workflow process, so that nothing is missed and everything is handled in a compliant manner,” explained Scheer. It entails real-time messaging and data processing capabilities, and documentation is automatically sent to the payments networks and merchants. By using Concourse—Disputes™, a company can decrease the cost of managing disputes by as much as 45%.

To learn more about dispute management solutions and how BHMI is helping companies navigate the complicated and costly dispute process, you can view the webinar here.

The post Dispute Management in the COVID-19 Era appeared first on PaymentsJournal.

This referenced posting is from Bloomberg and provides an overview of what is expected to be the emerging use of ‘new’ technologies in payroll processing, which includes robotic process automation (RPA), AI and blockchain (BCT).  We tend to use AI as an umbrella term but many categorize RPA separately since it is a rules-based software for automating repetitive tasks whereas AI, in a broader sense, mimics human intelligence using large data sets that can be continuously refreshed. The piece simply provides reinforcement that digital is the wave of the present.

‘The growth of new technologies, such as robotic process automation (RPA), artificial intelligence (AI), and blockchain, are expected to redefine and innovate payroll processes by reducing the need for routine tasks, said Martin Armstrong, vice president of payroll shared services at Charter Communications Inc…“We need to change our mindset from a payroll practitioner’s standpoint,” Armstrong said. New technologies are expected to become common, so payroll teams should embrace automation “because technology is going to propel us” to the future, he said at the annual American Payroll Association Congress, which was held online because of the coronavirus crisis.’

Those not familiar with payroll processing may tend to think it is limited to getting employees paid, either directly into an account, by card, check or even cash.  But there are a number of steps in the process, including the onboarding tasks (e.g.; W4) as well as ongoing personal liabilities (e.g.; garnishment), not to mention status changes (e.g.; termination).  Although the piece doesn’t mention it, we might also mention that on-demand wage access services are also on the rise. So there can be a whole host of more complex interactions that currently require manual intervention whereby intelligent automation can help reduce the effort.

‘Another complex event is the death of an employee, which requires a different process and special forms, depending on the circumstances, Armstrong said. RPAs can recognize state and federal requirements to ensure the distribution of funds and notifications to keep the employer in compliance, he said.’

We have often covered blockchain as one of the technologies that has utility in the corporate banking space, most specifically for trade and payments.  The author points out how BCT can also provide benefit to the payroll function. 

‘Through blockchain, data can be stored quickly and securely because the process is decentralized, Armstrong said. Payroll records, such as Forms W-2, Wage and Tax Statement, benefit from having accompanying information attached to the data chain and stored in multiple locations…Additionally, blockchain can help lower the costs of international payments by eliminating the problem of fluctuating exchange rates through almost-instant processing, Armstrong said.’

Overview provided by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.

For the original article quoted in this coverage, please click here.

The post New Technologies to Redefine Payroll Profession appeared first on PaymentsJournal.

Two articles caught my attention this week reporting that retailers are reaching out to regulators and banks asking them to lower card processing fees that they feel are unjust.  Finextra reports that industry group EuroCommerce has asked the European Commission to go beyond capping card interchange fees and also regulate other processing costs, plus include the three-party card networks in the regulation too.  Retailers contend that while interchange has been regulated, other non-interchange processing fees have gone up. Here’s a list of their demands:

Ahead of the Commission’s report on the functioning of the IFR, expected next month, we are asking the Commission to amend the Regulation to include:
• Regulation of the total fees charged to payment card acquirers;
• Removal of all substantive exemptions in the Regulation so as to cover commercial cards, three party card schemes, cash withdrawals at ATMs, inter-regional cards, and virtual card transactions;
• Independent acquiring of three-party card schemes;
• Mandatory minimum interchange fees for cash withdrawals and deposits at ATMs in order maintain consumer choice and cash alternatives and
• Strong and dissuasive penalties for non-compliance with the regulation.

In Australia, merchants want banks to reduce fees for global network tap-and-go transactions.  This would effectively include most transactions as contactless is used for the vast majority of in-person purchases.  A newly formed retail advocacy group is asking for an alternative, less costly network to be supported by the major domestic banks.  Yahoo Finance reported:

Four of the country’s largest retail groups including the COSBOA have now banded together to form the Fairer Merchants Fees Alliance to eradicate ‘tap and go’ surcharging outright, putting pressure on Australia’s banks to be more transparent.

“With several retailers advising that they are insolvent, and many Australian retailers concerned about reduced profits, dealing with exorbitant fees forced on them by the banks is a problem they should not have to face,” Australian Retail Association executive director Russell Zimmerman said.

It doesn’t have to be this way. Banks are able to provide lower-cost options to retailers, but currently don’t do so automatically, and are “dragging their feet” to fix the issue, the Alliance claims.

Overview provided by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group.

The post Retailers are Getting Restless, Demanding Cheaper Processing Costs appeared first on PaymentsJournal.

Google and the Bill and Melinda Gates Foundation have spearheaded a coalition of nonprofits attempting to build a real-time digital payments system for developing countries. The nonprofit, called the Mojaloop Foundation, also includes the Rockefeller Foundation, the Omidyar Network, and startups Coil and ModusBox. The foundation will maintain the software and promote it as a real-time open-source payments platform for central banks:

“Mojaloop is modeled on digital fast-payment systems such as the U.K.’s Faster Payments Service and Australia’s New Payments Platform. Building those systems, however, often involves big up-front technology development costs and politically difficult negotiations among a variety of players. Those challenges have slowed or stalled digital banking advances not just in developing countries, but even in the United States.

Mojaloop is meant to reduce such roadblocks by providing a standard digital-payments blueprint. The software, which is publicly available via Microsoft-owned software repository GitHub, includes a directory for identifying account holders, a transfer system for routing payments, and a clearing and settlement layer that transfers funds among users’ financial institutions. The routing system relies partly on a technology called Interledger that was originally developed by Ripple, a company that aims to use Bitcoin-derived blockchain technology to connect banks.

Providing that technology isn’t a magic bullet, though. Building systems also requires navigating national regulations, training staff, and making sure new financial tools are accessible to people who need them, according to ModusBox CEO David Wexler. So in addition to the software, the Mojaloop Foundation will connect experts with countries and development agencies to tackle problems and help guide government policies that promote privacy and other user-protection measures.

Mojaloop-based systems are intended to be hosted by each country’s governmental or financial authorities. But because they use a shared standard, Peric says the systems could eventually become interoperable across borders, further easing the global flow of funds.”

As the nonprofit payments network by Google and the Gates Foundation begins to take shape, its potential to transform the financial landscape is immense. By harnessing open-source technology, this initiative promises to provide scalable, inclusive solutions that can be adapted and implemented globally. The collaboration signifies a significant step towards achieving broader financial inclusion and economic stability for underserved populations. The world will be watching closely to see how this innovative approach can bridge the gap and create lasting impact in the financial services sector.

Overview provided by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group.

For the complete article quoted in this coverage, please click here.

The post Google and Gates Foundation Launch a Nonprofit Payments Network Based on Open Source appeared first on PaymentsJournal.

As businesses around the globe and in all industry sectors face a new reality of managing remote workforces, their ability to secure payment systems, technology access, and sensitive customer data from anywhere and particularly the home, has never been more important.

Most organizations have had to further digitize themselves during the COVID-19 pandemic. Out of absolute necessity, consumers everywhere have turned online and to mobile channels, or dialed into call centers to make purchases, schedule medical appointments, change their travel plans, pay bills and more. These shifts have placed increased workload and responsibility on customer support teams, salespeople, IT security personnel and the businesses that employ them. They must maintain operations and provide their newly remote/home based employees with access to enterprise technologies, all while still ensuring strong security around sensitive customer data and compliance with a raft of regulatory requirements in a rapidly evolving environment.

So how can organizations ensure their employees who are processing payments and handling other types of personally identifiable information (PII) – such as credit card data and bank account numbers – maintain compliance with data security and privacy regulations like the Payment Card Data Security Standard (PCI DSS)? While this unprecedented situation has changed how businesses must operate to survive, they cannot simply just stop complying with data security and privacy regulations as their workforces move to a remote model.

Organizations need to employ modern payment technologies and strict security protocols to ensure customer PII is handled in a PCI DSS compliant manner everywhere. Upholding these standards also forms a safety net to help mitigate potential COVID-19 related fraud, cybersecurity risk and data breaches.

Enable Your Remote Workers While Protecting Payments and Sensitive Data

Despite the challenges and concerns of remote working, organizations can follow best practices to ensure they maintain compliance with regulations, securely handle consumers’ personal data and still offer a frictionless customer experience. These practices also align with the PCI Security Standards Council’s advisory on protecting payment card data when implementing a remote-work model in response to COVID-19.

• Minimize Exposure to Sensitive Card Data

One of the most effective ways to protect payment card data and other PII is to ensure it is never handled or held by customer service representatives (CSRs), sales professionals or other employees who do not need access to it, whether they are working remotely or in their normal environments.

Modern payments solutions can enable CSRs and sales professionals to process payments over the phone or through any digital channel customers prefer – including web chat, social media, email, SMS and QR codes – while ensuring that the sensitive payment data is kept out of the organization’s (or remote employee’s) network infrastructure completely. By using technologies like dual-tone multi-frequency (DTMF) masking and encryption, today’s cloud-based payments solutions can sit outside the network and securely rout sensitive payment card data directly to the payment service provider (PSP) for processing.

Because the employee never directly handles the sensitive data and it does not touch their home network, the business is able to maintain PCI DSS compliance and minimize security risks such as data breaches or fraud. Meanwhile, customers still benefit from making fast, secure and seamless payments through the platform or channel they prefer.

• Conduct Security Awareness Training for All Employees

As employees transition to a home-working environment, it is critical that they are educated on the data security risks and what steps they must take to maintain the security of the systems, processes and devices they are using from home. Organizations should immediately conduct a refresher course on PCI DSS security awareness for all employees. This will help them understand the proper ways to handle sensitive information while working from home, and how to recognize potential threats. Among other topics, security awareness training should instruct remote workers on:

• Best practices for password security.
• How to make sure their devices are up to date on patches, anti-malware protection and firewall functionality.
• Using only secure and encrypted communications channels, such as a VPN, to access the company network — and to never use an unsecured Wi-Fi network.
• Turning off voice-activated smart speakers like Alexa to ensure that sensitive information discussed in telephone conversations is not overheard.
• Ensuring that housemates and family members do not have access to any business systems.

• Harness Data Encryption Methods

Securing laptops, mobile phones and other Wi-Fi enabled devices has become more challenging than ever. Organizations must secure the company devices that connect to their networks, while also protecting against potential vulnerabilities introduced by employees’ mobile phones and other personal devices. Organizations can mitigate these threats and continue to comply with regulations like PCI DSS by using encryption methods such as WPA2 and installing a corporate VPN. These security tactics can reduce the scope of compliance for employees working in remote environments.

• Leverage Real-Time Analytics

With newly dispersed workforces, businesses should also consider incorporating real-time analytics solutions to obtain a reliable view of how their payment and customer support systems are operating from anywhere. Gaining robust analytics on all customer touch points or potential areas of concern – including failed payments, system resets or increased wait times – can help organizations improve customer and employee satisfaction, or to adjust their operations as needed.

While organizations will need to navigate these challenging times with remote employees and strains on their systems for the foreseeable future, they can still harness modern technologies to protect payments and customer data and ensure compliance with regulations. By employing best practices for handling sensitive data and protecting their networks, businesses don’t need to sacrifice payment security and delivering the best customer service with a dispersed workforce.

The post Securing Your Remote Workforce. How to Protect Payments, Sensitive Customer Data and Keep Your Businesses Running appeared first on PaymentsJournal.

Frank Bisignano to become Chief Executive Officer effective July 1

Jeffery Yabuki to serve as Executive Chairman through end of year

BROOKFIELD, Wis.–(BUSINESS WIRE)–May 7, 2020– Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology solutions, today announced that its Board of Directors has unanimously elected Frank Bisignano to succeed Jeffery Yabuki as Chief Executive Officer as of July 1. Yabuki will step down following a distinguished 15-year career with the company. To ensure a seamless transition, Yabuki, Chairman of the Fiserv Board, will continue to serve as Executive Chairman for the remainder of 2020.

“With the successful integration of First Data well underway, this is the right time for Frank to lead the next phase of the company’s evolution,” said Yabuki. “Frank and I have had the pleasure of working closely over the past 18 months – and I am highly confident he brings the skill and experience to deliver the leadership that is needed today, while building for tomorrow. In addition to spearheading our integration efforts and significant COVID-19 response, Frank has been leading our global businesses with an absolute commitment to excellence. While Frank will bring new ideas and perspectives as CEO, he fully embraces the strategic and capital foundation of the Fiserv value creation playbook. I look forward to continuing to partner with Frank through the end of the year, and know he will continue to deliver superior results for the benefit of our stakeholders.”

Yabuki added, “Leading Fiserv since 2005 has been an honor and a privilege. I am pleased that our collective work has made Fiserv a company that others admire, and transformed us into an organization that is a global cornerstone of moving money and information in a way that moves the world. Our Board of Directors has spent considerable time over the past several years preparing for a well-planned and thoughtful succession process, and we believe that this is the right time to initiate this leadership transition. We have assembled the premier solutions in the industry, with a fantastic management and associate team built on a foundation of delivering differentiated value for clients and shareholders. As successful as we have been for the last 35 years, I firmly believe that our brightest days are ahead.”

Since Yabuki became CEO in 2005, Fiserv has achieved substantial financial and business success, including:

• Transformed the company into the world’s leading payments and financial services technology provider with approximately 44,000 associates globally;
• Achieved Total Shareholder Return of 969% through 2019; Outperformed the S&P 500 Index each of the last 14 years;
• Achieved double-digit adjusted earnings per share growth each year and continued the streak of 34 consecutive years;
• Named a FORTUNE World’s Most Admired Company^® for seven consecutive years and nine of the last 10 years; and
• Increased associate engagement to be in the top quartile of all large employers.

“Our leadership succession plan enables a smooth transition of the CEO role over the balance of the year,” said Denis O’Leary, Lead Director of the Fiserv Board of Directors. “Frank is an outstanding executive who knows the business extremely well and has a track record of delivering outstanding results over his accomplished career. We are impressed at what we have seen, and confident that Frank will continue the legacy of excellence and value creation at Fiserv.”

O’Leary added, “On behalf of our Board, I would like to thank Jeff for his invaluable leadership of our company during his exceptional career. Through Jeff’s vision, Fiserv transformed into a global leader in payments and fintech, creating tremendous shareholder value through significant growth, successful M&A transactions, and the consistent execution of disciplined capital allocation. In addition to 15 uninterrupted years of double-digit earnings growth, he strategically positioned the company for the future and engineered a superb leadership transition; an enviable legacy for any CEO.”

Commenting on his appointment, Bisignano said, “It is an honor to assume the role as CEO of Fiserv; to serve clients with excellence, work with the talented team of leaders and associates and to continue the great track record of delivering differentiated value for our shareholders. I thank the Board of Directors for placing their trust in me to lead Fiserv as its next CEO, and I thank Jeff for all that he has done for the company and our people – including me – during his tenure. Fiserv is an industry leader with great businesses and tremendous talent, and I am honored to have the opportunity to lead this great team. I look forward to continuing to work closely with Jeff in the coming months in his capacity as Executive Chairman as we work together to deliver on the promise of an even stronger Fiserv.”

Bisignano will become only the fourth CEO in the 36-year history of Fiserv.

Bisignano, with more than 30 years of senior leadership experience, has served as President, Chief Operating Officer and a Director of Fiserv since the company completed its acquisition of First Data in July 2019. During his tenure at First Data, Bisignano served as Chairman and Chief Executive Officer and transformed the 48-year-old company from the world’s largest traditional payment processor into a technology innovator, improving the company’s balance sheet and leading its $2.6 billion initial public offering in 2015. Before joining First Data, Bisignano served as Co-Chief Operating Officer at JPMorgan Chase & Co, where he had previously been Chief Executive Officer of Mortgage Banking. His background also includes leadership positions at Citigroup, including Chief Administrative Officer and Chief Executive Officer of the company’s Global Transaction Services unit. He is a member of the Board of Directors of Humana Inc. For more information visit: investors.fiserv.com/corporate-information/executive-committee.

The post Fiserv Announces CEO Succession Plan appeared first on PaymentsJournal.

The COVID-19 pandemic is disrupting markets all around the world on an unprecedented scale and the payments sector is no exception.  The fallout from the pandemic is having a significant impact on merchant acquirers in particular, who, as intermediaries, are finding that they are exposed to higher levels of risk than usual.

Acquirers typically process payments for merchants within 1-3 days. Where a merchant operates in a high-risk sector, or has a poor credit rating, payments can be withheld for much longer periods in order to mitigate the acquirer’s own financial exposure to chargebacks. However, given the current trading conditions in some industries, these practices are becoming the norm rather than the exception.   

Chargebacks leave acquirers out of pocket until they can recover the funds from the merchant – either directly, or from cash reserves that it has withheld from previous transactions. Even in benign markets, chargebacks can represent a significant risk to acquirers, particularly where payments are made by the purchaser well in advance of the receipt of the goods or services, such as flights, hotel bookings or concert tickets. In the current crisis, these risks are far greater.

As you would expect, acquirers have sophisticated risk management systems that allow them to reduce their financial exposure and which inform their credit control procedures; for example, what levels of funds they should be withholding from each merchant, and what credit facilities they may need to have in place to provide the acquirer with protection against exceptional events (such as the failure of a large business). Whilst acquirers have historically held a lot of power over struggling businesses, they too may now find themselves at significant financial risk due to the current economic climate precipitated by the COVID-19 pandemic.  

Thousands of businesses have been forced to shut as a result of the government-imposed lockdowns world-wide and sales in some sectors have fallen to zero as a result. Consequently, acquirers will have experienced a dramatic decline in fees from the merchants for their payment processing services. Moreover, as the unfortunate inevitability of countless insolvencies emerges, a greater concern for acquirers will be the sharp increase in chargebacks that is likely to occur.

Acquirers servicing the travel sector will be particularly hard hit. Given the catastrophic impact that COVID-19 restrictions have had on air travel and hotel bookings alone, it is difficult to imagine that many acquirers will have sufficient protections in place to cover the likely numbers of chargebacks that will result from the thousands of bookings that can no longer be fulfilled (and the likely business failures that will follow). Similarly, acquirers contracted to process payments for merchants in the hospitality and food and drink sectors will also be heavily impacted. Those processing payments for e-commerce and grocery retailers will be less affected.

In light of the current extraordinary market conditions, acquirers will be seeking to reduce risk wherever possible, which means that merchants are likely to see longer withholding periods and greater requirements for collateral to be provided upfront (for example in the form of  bank guarantees, letters of credit and/or charges over assets). 

Some merchants will not be in a position to provide security, nor will they have sufficient cash flow to trade whilst enduring long withholding periods.  Acquirers will need to consider how much (if any) business they are prepared to do with such merchants.  As mentioned above, some markets have been affected more than others and so it is likely that acquirers will seek to diversify their business in order to spread their risk.  This will almost certainly lead to further consolidation in the merchant acquirer market, and will possibly cause some acquirers to exit the market altogether.

These are uncertain times and some parties will be better positioned than others to weather the storm. Parties that are encountering difficulties should seek legal advice and assistance.  

Written by Simon de Broise, Senior Associate, & Isobel McNaught, Trainee, in the Banking and Finance Disputes Team at Collyer Bristow LLP

The post How Is the Payments Sector Reacting to the Fall-Out from COVID-19? appeared first on PaymentsJournal.

Banks and credit unions able to expedite funds availability with flexible payment options for consumers and small businesses

MONETT, Mo., May 4, 2020 /PRNewswire/ — Jack Henry & Associates, Inc. (NASDAQ: JKHY) is a leading provider of technology solutions and payment processing services primarily for the financial services industry. The company announced today that there are more than 100 financial institutions implementing its faster payments hub, JHA PayCenter™, to connect to Early Warning Services’ Zelle Network^® and The Clearing House’s RTP^® network.

Jack Henry is the first third-party service provider to connect a financial institution, Dallas-based Pegasus Bank, to the RTP network and process live transactions. The $750 million-asset bank is offering its consumer and commercial customers the ability to receive real-time payments sent by accountholders from other participating financial institutions without incurring interbank settlement risk. The real-time payment capabilities provided by the RTP network also enable Pegasus Bank customers to receive real-time credit transfers initiated from third-party payment apps. More than 50 additional Jack Henry clients are scheduled to go live on the RTP network by calendar year-end.

Jenny Murphey, executive vice president and chief operating officer at Pegasus Bank, said, “Making faster payments a reality was already a crucial matter; fast and easy electronic payments are a necessity in today’s world. We have seen an uptick in P2P payments as well as customers applying for bill pay in recent weeks. Offering the RTP network has proven to be a tremendous value to our clients already, and we expect heightened activity in the months ahead as we expand the scope of the real-time capabilities we provide.”

JHA PayCenter is a proprietary payments hub that provides seamless connections to the Zelle and RTP networks, enabling near-real-time payments to be sent and received through Jack Henry’s core and digital solutions. JHA PayCenter eliminates the expense and resources required for institutions to build their own connections to the faster payment networks and expedites speed-to-market with implementing real-time payments. It also provides access to an operational infrastructure and payments expertise that would be challenging for individual institutions to assemble and maintain. This payments hub will also provide a single integration point with future faster payment networks.

Tede Forman, group president of consumer and commercial payments at Jack Henry, said, “The demand for real-time payments has taken on a new meaning in light of the COVID-19 pandemic. Consumers and businesses face mounting pressures to expedite funds availability and help improve cash flow with a new contemporary alternative for moving money how and when they need to. We have a big, ongoing opportunity to help financial institutions of all sizes deliver secure, convenient payment experiences that support consumers and businesses with money in the exact moment of need.” 

The RTP network currently reaches more than 51% of U.S. transaction accounts and adoption is growing. Zelle processed $187 billion in payments on 743 million transactions in 2019.

The post 100 Financial Institutions to Provide Real-Time Payments with Jack Henry appeared first on PaymentsJournal.

To paraphrase the old typewriting practice line, ‘now is the time for all good men to come to the aid of small businesses’, readers will know the crushing impact to SMEs (especially those in certain specific verticals) from the sledgehammer policies enacted to slow down COVID-19.  This referenced posting, appearing in yahoo finance, reviews a partnership between a couple of startups that have capabilities to fit the needs of SME merchants. One is Fattmerchant, a 2014 Orlando fintech that provides integrated payments technology solutions. The other is SaaSOptics, a 2009 startup in the Atlanta area that offers a subscription management platform.  Using APIs, they are integrating services to reduce payments processing costs and enable better processing and analytics services for businesses that manage subscriptions.

‘Fattmerchant’s payment processing technology has been integrated directly into SaaSOptics’ backend via Fattmerchant’s API, expanding its integrated payment options for emerging and growth B2B SaaS. With Fattmerchant, SaaSOptics adds a more affordable payment processing model for credit card and ACH transactions to its platform…The subscription management platform will utilize Fattmerchant’s PayFac model to accelerate its sign-up process for new and existing customers, which will result in the acceptance of payments faster compared to traditional underwriting procedures.’

For sure one key for SMEs is fast onboarding, since most don’t have either the time or resources to get entangled in complicated solutions with heavy tech or training requirements. Time is money and these companies tend to be cash-strapped.  Another is the low upfront capital since SaaS is delivered on an as-needed basis with ongoing updates, so no need for new version purchases.  SMEs also benefit from lower operating costs since in-house resource requirements are limited.  All of these things will be important for the re-launch of various businesses during the next 6 months.

“SaaSOptics’ seamless approach to SaaS financial operations and continued product innovation has led to its rapid growth and status as a leading subscription management platform,” said Sal Rehmetullah, president at Fattmerchant. “Both Fattmerchant and SaasOptics value ease of use, customer service and fast implementations for our customers. Not only will the alignment within this partnership allow us to provide SaaS-based merchants with an improved experience overall, but it also presents a great opportunity to continue expanding our presence in the growing market.”

Overview provided by Steve Murphy, Director, Commercial & Enterprise Payments Advisory Group.

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Internet payment arena has gone for drastic changes in the recent years with an increasing popularity and companies jumping on to this arena are launching their own payments apps.

The trends in the mobile payment apps industry are moving at a brisk pace and so do the preferences of people to transfer and receive payments over web.

The trends we are to discuss are in a way a conscious effort by firms to let technology evolve and make mobile payments more convenient than ever before.

Let us have a look at the mobile payment processing trends in 2020 that are redefining the way the payment is done on your palms.

Cash payments seeing considerable decline

If we go by the report by McKinsey & Company, there have been a steep decline in cash transactions going down to below 80% from almost 90%.

As per experts, this is just the beginning since the cash payments are only going to decline, especially with new digital m-commerce options coming up daily in the form of one or the another mobile payment system.

Think about how convenient it is for businesses to collect payments via mobile instantly for any products or services sold, since mobile payments are fast, secured, and encrypted.

Payments are going to be contact free

With NFC (Near Field Communication) technology gaining prominence, consumers need to simply wave or tap their phone to do instant payments, with a wonderful example of transit metro or buses wherein the technology is extensively used in transit cards used in commute.

Banks issue such cards and with a specific amount top-up into the card, the money is deducted every time when you wave or tap your card for commuting purpose.

Think how much convenient it would be for e-commerce and other online businesses wherein the payment is done right away with a simple tap or wave and making mobile payment solution extremely comfortable for customers to purchase online without worrying about the tiresome checkout.

Automatic payments in no time

The impact of Internet of Things (IoT) is just so powerful that now no more need to get yourself standing in any queue waiting for your turn of payment since just like toll booths you can simply bypass and the RFID (Radio Frequency Identification) sensors scans your card so that a payment receipt is generated on the app and even sent to you via email and text.

As per this study from Accenture, a world class customer experience is the one that differentiates the best from the rest and that is where IoT can be a wise step to put forward with any digital payment trend.

With invisible payment processing in place, people no more to worry about waiting for payments to process by inputting their information after being in the queue for a while before making an exit.

Payments at places where they aren’t expected

Payments are showing up at places wherein you least expect them and this is just amazing since now you can have payments rapidly done everywhere.

As an example let us consider the absolute intelligent smart cars introducing mobile payments and soon you can see it getting incorporated across a range of sectors whether be drive-throughs, gas, tolls, or more, you can expect mobile payments taking up everywhere.

Since, it is very much feasible and convenient to pay through digital wallet app as compared to other modes of payment, it won’t be surprising to see payments coming up at avenues that are out of reach.

Security to be more acute with time

It is not just the consumer convenience which is at stake with mobile money solution, but even secured authentication matters big time with an authorised access only to the buyer, who provides the payment details in lieu of purchasing the offerings from the e-commerce store.

Data security has been a top priority with tech advancement going ahead, and that is applicable to even mobile commerce arena, taking payments to a whole new level.

When the security comes integrated within the mobile payment platform, customers can be fearless in providing their sensitive payment details, and make as many purchases as and when necessary escalating business sales and revenue, in turn preventing frauds from taking place.

Stay up to date with latest mobile commerce payment trends

It is very much essential to check out mobile payment trends so that it can be of major assistance when you plan to build a mobile wallet app.

Mobile payments is an arena with a long bright future to go with no possibilities of getting diminished in near time to come.

Not just enabling customers to pay online but even enabling merchants or businesses to pay with ease, without any long procedure, or without dealing with technical issues, can be macro achievements when planning for your own mobile payment processing app.

The post 5 Mobile Payment Processing Trends 2020: Increase Your Sales and Keep Customers appeared first on PaymentsJournal.

 – Wirecard join forces with Visa in the Middle East to deliver fast to market digitized solutions

ASCHHEIM, Germany and DUBAI, U.A.E, April 20, 2020 /PRNewswire/ — Wirecard, the global innovation leader for digital financial technology, today announced they have signed an agreement to be the preferred payment processor for Visa to bolster the Visa Fintech Fast Track Program in the Middle East region.

The Visa Fintech Fast Track Program enables fintech partners to develop new commerce experiences leveraging the reach, capabilities, and security that VisaNet, the company’s global payment network, offers. As a strategic partner of Visa, Wirecard will provide its financial technology and payment solutions, as well as its in-depth market expertise aimed at accelerating growth and innovation within the thriving payment and fintech community in the region.

Together, Wirecard and Visa will additionally cooperate to develop programs aimed at accelerating growth and innovation for their respective businesses. Wirecard now has the ability to access Visa’s growing network that is part of the Visa Fintech Fast Track Program and provide guidance to fintechs in helping them get up and running in the most efficient way possible.

“We are excited to be a part of the Visa Fintech Fast Track Program and together, we can continue delivering financial technology innovations to the key Middle East market,” commented Humza Chishti, Regional Manager for Wirecard in the Middle East.

“We recognize that fintechs are nimble and fast and expect the same of any partner. The Visa Fintech Fast Track Program meets fintechs at the speed they work, streamlining access to Visa assets and capabilities, both globally and across the region. This partnership with Wirecard will allow us to continue to enhance the value of fintechs being part of our network and ensure that we work together on innovative new commerce experiences that can be delivered at scale and with pace,” added Otto Williams, Vice President, Strategic Partnerships, Fintech and Ventures, CEMEA at Visa. 

Learn more about Visa’s Fintech Fast Track program at https://Partner.Visa.com.

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How many of you think about sterilizing your credit cards?

That would have been a weird question to ask a month ago. After all, you protect them from theft. You likely have credit fraud monitoring services. But, sterilize them? Not a preventative measure that likely crossed your mind as you went about your weekly grocery shopping, bought popcorn at the movies, or grabbed your prescription at the pharmacy.

A lot has changed in a month. We’re now more aware then ever of the number of touchpoints we come across all day long.

As COVID-19 has made its way across the globe, people’s daily routines have been upended. With the implementation of social distancing, businesses asking their employees to stay home, and people self-quarantining to reduce their risk of exposure, there’s been a spike in how consumers are buying and consuming all they need to keep themselves going through a global pandemic.

Naturally, there’s been a spike in online shopping as people scramble to get necessities, which apparently in some instances, is a year’s worth of toilet paper and rubbing alcohol.

What other areas will see more card-not-present (CNP) and digital wallet payments? Newspapers and digital media will definitely see a rise in readership and subscriptions as people hit their paywalls. As more and more people return to established publications to get the most up-to-date and accurate information, they’re greeted with some very clear messages: if you’re looking for COVID-19 information, we’ve lowered our paywall and while you’re here, consider a digital subscription and support journalism. It’s a compelling case to whip out your newly cleaned credit card and subscribe.

Some companies that have always taken CNP payments are likely to see more sign-ups and therefore more transactions. These include service delivery companies that cater to food (Home Fresh, Fresh Direct, Peapod), personal care (Dollar Shave Club), pet care (Chewy.com, Barkbox), medication delivery (CVS, Walgreens), and so on.

With colleges and schools closing and more and more states implementing restrictions on public gatherings, streaming services will be essential distractions. Hulu, Disney, Netflix, YouTube, Amazon and Apple will see more subscriptions, certainly. Amazon and Apple are going to see an increase in their digital wallet usage. It’s a wait-and-see on whether Apple will see a bump in AppleCard applications, as those same people willing to take on more monthly fees to satiate their self-quarantined boredom may not be willing to risk their credit score. 

Digital wallet payments and stored credit card information are the norm for food delivery companies and services such as Door Dash and GrubHub. Buyers aren’t going to want to spend more than a second on the payment page, pandemic or not, so a seamless purchasing experience is critical. If any of these types of companies experience any lag due to sudden surge in volume, their customers may not be patient.

Many other types of organizations and services will also see a surge in subscriptions services, and as a result, a surge in CNP and digital wallet transactions. However, these same companies will also see a surge in costs associated with processing the transactions, one that isn’t going to go away unless they’re willing to forego their recurring revenue model. Consumers aren’t keen to take on those costs, be it housed as a surcharge or convenience fee.

One way to take on more payments but pay less in fees is to talk with your provider about their pricing model. If the word “bundle” comes up at all, ask for a cost-plus model. This will benefit your bottom line – and since you don’t have to pass on those costs, you’re more likely to keep the customers you provided value to during a time of need and necessity.

As more and more people sign-up for subscriptions, frictionless payments become a bigger factor in how that economy will grow and expand. In the most normal of times, CNP, digital wallets and contactless payments provide much-appreciated convenience. In a time of social distancing and self-isolation, they provide much needed peace of mind, and require fewer washings.  

Kimberly Miller is a technology industry veteran with a not-quite mundane past and a storied future. She is Vice President, Business Development for Payway, an integrated payment processing solution.

The post CNP Payments are Prescription for Success During COVID-19 appeared first on PaymentsJournal.

Fees are the heartbeat of the payments industry. When money moves between different people and across various networks, fees are typically required to process the transaction. Due to the large number of participants, roles, business relationships, rules, regulations, and transaction types, the fee landscape can be incredibly complex.

It’s important that the players in the payments industry, especially processors, understand the complex world of fees. And since the profitability of financial transaction networks is intimately linked to the successful application and recovery of fees, it’s important that processors have the proper software to effectively administer fees.

Since fully understanding fees in the payments industry can be daunting, BHMI—an industry leading company which has created primary business applications since 1986—published “Fees & Commissions in the Payments World,” a comprehensive white paper on the topic. The document describes the different fees and commissions, and offers some best practices for developing solid, effective fee structures.

The paper also outlines how BHMI’s Concourse — Fees & Commissions™ software allows for the creation of an almost unlimited range of fee configurations, thereby accommodating the needs of any processor involved in a financial transaction.

“There’s no free lunch when it comes to the cost of financial transactions.”

There is a central fact in the payments industry: All participants involved in the entering, routing, authorizing, and settling of payment transactions either charge fees or receive fees. As the paper points out “there is no free lunch when it comes to the cost of financial transactions.”

Although there are some variations, the following are generally the types of fees which occur during the payments cycle:

• Interchange Fees
• Assessment Fees
• Payment Gateway Fees
• Issuing Bank Processor Fees
• Payment Service Provider Fees

Interchange Fees

Interchange fees are paid by the payment service provider (PSP) to an issuing bank or the issuing bank processor through a payment network. Fee rates are set by the payment card networks and depend on a variety of variables, including the transaction amount, payment card type, and acceptance method, among other factors. Typically, the fee is set to a fixed amount per transaction type, in addition to a percentage of the total transaction amount. It’s important to note that the fee is only assessed on approved transactions.

Assessment Fees

This type of fee is paid by either the PSP or the merchant to the payment card network handling the purchase. Similar to an interchange fee, assessment fees are normally based on a fixed amount per transaction type as well as a percentage of the transaction amount. However, unlike interchange fees, assessment fees are charged regardless of whether the transaction is approved.

Payment Gateway Fees

Merchants connected to a PSP via a payment gateway provided by a third party are subject to a separate set of fees charged by that payment gateway provider. While the fee structure varies by provider, it can consist of a monthly fee, a flat fee per transaction, a percentage of the transaction amount, or some combination of the three. Terminal fees can also be charged if the payment gateway provider also supplied the card scanner used by the merchant.

Issuing Bank Processor Fees

Since issuing banks often outsource their processing responsibilities to an issuing bank processor, or license a processor’s software, they frequently  face related fees. When outsourcing processing entirely, the issuing bank will pay its processor an operations fee, which can vary depending on the fee structure. In cases where the issuing bank licenses processing software, that bank faces a license fee, fees for necessary customization of the software, and maintenance fees.

Payment Service Provider Fees

PSPs also include a variety of fees to cover their cost of doing business. These can consist of flat fees on a per-transaction basis, a percentage of the total transaction amount, or a combination of both. The BHMI white paper also identifies four additional fee structures that a PSP can adopt, including tiered pricing and differential pricing.

PSPs and payment gateway providers also charge non-transaction fees

In addition to the above transaction-related fees, BHMI identifies another 22 unique fees that are potential fee components of plans offered by processors, from terminal lease fees to payment gateway setup fees. For the complete list of non-transaction fees and their definitions, consult the BHMI white paper.

The sheer number of fees underscores how integral fees are to the payments industry. “Fees are an important part of the payments industry and serve as a core component of a processor’s revenue stream,” explained David Nelyubin, a research analyst with Mercator Advisory Group, a research and consulting firm focused exclusively on the payments industry.

The paper also notes that in addition to fees, many processors utilize commissions and rebates to further drive revenue. For example, a processor may reward a customer with a share of processor revenue if the revenue exceeds a target level.

Fees can be overwhelming

Given the amount of fees, the differing fee structures, and the various players contained therein, coupled with the added wrinkle of rebates and commissions, understanding fees can be overwhelming. As the white paper notes, “the number of feeing ‘rules’ that guide the actions of significant processors can exceed 35,000. And the number of variables that can be incorporated into a single rule can exceed 6,000.”

In such a complex environment, “a comprehensive overview of the fee landscape is an invaluable resource for payments professionals,” Nelyubin added.

Meet BHMI’s Concourse — Fees & Commissions

Beyond providing a detailed look at the different types of fees across various payment transactions, the BHMI white paper outlines a potential solution: Concourse — Fees & Commissions. BHMI’s software simplifies the task of creating and managing complex feeing configurations, allowing processors to increase revenue and stay competitive.

Since Concourse — Fees & Commissions is a rules-based platform, all fee calculations are expressed using configured rules, instead of needing to re-write software to express the logic of a fee calculation. Rules can be configured using a point-and-click graphical interface, making it easy to set up or change fee logic when needed.

Such an approach makes fee tiering easier than ever. Fee pricing can automatically be changed based on the number and type of transactions over any given period of time. And since the platform works in near real-time, clients can view the ongoing status of fees positions.

The software supports any fee-related participant in financial transaction processing, including (but not limited to) third party processors, P2P networks, issuing banks, and card networks. To learn more about the world of payment transaction fees and how BHMI’s Concourse — Fees & Commissions can aid processors no matter their needs, access BHMI’s white paper here.

The post Confused About Fees in the Payments Industry? BHMI is here to Help. appeared first on PaymentsJournal.

Payments are humming across a variety of rails to countless businesses and consumers at any given moment in the U.S. With so many available payment methods, end users, and use cases, the payments landscape can be a tangled web of rules and regulations.

It also can be a challenge for industry stakeholders to navigate the often complicated payments world, prompting calls for a simplified and automated process for exchanging payment-related information. Financial institutions of all sizes and specialties, as well as payment processors, emerging fintechs, and many others would benefit from such a process.

With a large cross-section of the payments world in need of a solution, Nacha has responded with Phixius, an online platform that brings together technology, rules, and participants to streamline and modernize how payment information is exchanged. Nacha plans to make Phixius available to early adopter organizations in May 2020.

To learn more about Phixius, PaymentsJournal sat down with George Throckmorton, Nacha’s managing director of Strategic Initiatives & Network Development.

During the conversation, Throckmorton spoke about the current issues with exchanging payment information, how Phixius addresses these pain points, and why Nacha is well positioned to lead these modernization efforts.

A solution to a problem 10 years in the making

The payments industry has contended with an inefficient means of exchanging payment-related information for at least a decade. Yet, the problems do not lie in “making” the payments.

“It’s not just about the routing of payments. I think that’s a misconception,” said Throckmorton. “When we talk about payment-related information, it’s about the authenticity and richness of that information.” Bundled into the authenticity of the data is a range of important aspects of making a payment, including invoicing, compliance data, and payment remittance.

One central issue connecting all of these aspects is a lack of automation. “When payment information is exchanged today, it’s very manually intensive,” said Throckmorton. Companies often rely on phone calls, emails, and even the U.S. Postal Service to exchange the relevant information. These methods are slow, prone to human error, and costly.

The lack of standardization is another problem that organizations encounter while attempting to exchange payment information. “How I get that information, the formatting, and which channel it comes in also add complexity to the process,” explained Throckmorton.

A related issue is also the lack of interoperability. Over the past decade, different players in the industry have set up proprietary directories that are very effective in supporting the exchange of payment-related data. However, these directories often do not connect with each other.

“So if I want to exchange information with others that are not in my particular network or solution, that’s where it becomes more difficult,” said Throckmorton. Small to medium-sized organizations are particularly affected by interoperability issues because they often can’t participate in multiple networks or solutions.

The last issue identified by Throckmorton was fraud protection. Ensuring that the information is reliable and accurate is of crucial importance for all of the parties to a transaction. One common fraud vector is to send a business a request to change information to later defraud the business. To validate that the request is indeed authentic, companies often rely on manual checks, such as a phone call or email, to verify the user’s identity.

Phixius solves pain points by utilizing emerging technologies, rules, and industry participants

After surveying all of these problems, Nacha began developing a solution. The company hired technology partner Ernst & Young LLP (EY) to help develop a product that could be brought to market. In 2019, Nacha developed and demonstrated a proof of concept to the industry, and after reviewing and incorporating industry feedback, Nacha developed Phixius.

“It’s a platform for the secure exchange of payment-related information,” said Throckmorton.

He stressed that Phixius is not a directory. Instead it is platform to enable interoperability that utilizes emerging technologies – including distributed ledger, RESTful APIs, and cloud-based environments – to allow its users to more easily and securely exchange information without centralizing data.

Phixius also supports real-time alerts and messaging, allowing payment information to be securely changed.  For example, a business can change payment instructions and every organization that has previously received information will immediately be notified of the change, said Throckmorton, noting this reduces fraud such as business email compromise. 

“There is no directory or database in the sky that everyone is going to, and creating risk,” said Throckmorton.

Phixius also supports real-time alerts and messaging, allowing payment information to be securely changed when needed. For example, “people can change bank accounts and they can change their preferences on what they want for remittance,” said Throckmorton, noting that these changes can occur in real time.

Underlying Phixius’ effectiveness is a set of participant rules. “We all have to agree that we’re going to act the same way, we understand the transactions we’re going to exchange, and what those mean,” explained Throckmorton. To this end, Nacha developed and now oversees a set of operating rules that govern the platform, covering issues ranging from liabilities to warranties. These rules provide confidence and certainty to everyone connected to the platform.

The last aspect of Phixius worth noting is its network of participants. Social media platforms become more effective when more people are a part of the network, and Phixius is no exception.

However, the platform is designed such that only financial institutions and service providers are directly connected. In turn, these businesses provide products and services to their clients, meaning that Phixius “requires a smaller number of endpoints to create value for all the businesses,” noted Throckmorton.

Why Nacha?

After determining the viability of Phixius as a solution to problems surrounding the exchange of payment-related information, Nacha did consider whether it was best suited to develop and govern such a platform.

The feedback Nacha received from the industry was a resounding yes. Besides serving as the steward of the ACH Network and being responsible for writing its rules, Nacha also has decades of experience successfully navigating broader payments issues.

Nacha regularly convenes diverse organizations to enhance and enable electronic payments and financial data exchange within the U.S. and around the globe. Through the development of rules, standards, governance, education, advocacy and thought leadership, Nacha works with industry stakeholders to advance the modern ACH Network and drive innovation by pursuing new ways to connect people, businesses and payments.

“Nacha also has been heavily involved in industry-wide API standardization efforts with organizations around the globe, including those in Europe and in Asia Pacific and with support from the industry launched Afinis, a membership organization whose goal is to further API standardization in the U.S. and participate in global collaboration.” explained Throckmorton.

Afinis is a membership organization with the singular goal of creating API standard products. For the past two years, Afinis has been successfully working with the industry to develop and test APIs and understand what steps are needed for their widespread adoption.

Throckmorton put it simply: “We have brought the industry together many, many times.” With Phixius, Nacha is planning on bringing the industry together yet again to modernize and provide much needed interoperability for payment information exchange.”

The post With Phixius, Nacha Sets Its Sights on Modernizing and Streamlining the Payments Process appeared first on PaymentsJournal.

This piece appears in PaymentsSource and summarizes a bevy of VC-backed corporate expense management firms.  The main focus is a product from the 2017 Seattle-based startup Center, which has the distinction of being launched by the founder of Concur who most readers will know as a major expense management player (now part of SAP).  The product is called CenterCard and helps manage employee purchases in real-time through the application of ML algorithms.  

‘A key to Center’s service is leveraging real-time payment card data to compare the time, location and type of merchant with companies’ expense-management policies so corrections can be addressed immediately, versus waiting until an expense account is filed days or months later.’

Although we have not had a demo, a review of the website indicates that the solution eliminates expense reports through digital, transaction by transaction (and auditable) reconciliation capabilities. 

This can be delivered through a mobile device as well and may or may not involve a physical plastic.  It seems a key target is potential nuisance expenses involving employee personal card usage for online, business related purchases, which can fly under business controls radar.

‘One particular pain point Center aims to attack is the proliferation of expenses employees buy through e-commerce sites and apps, including software subscriptions and digital goods, according to Naveen Singh, Center’s CEO…“Employees at growing companies are often using their personal cards to buy software subscriptions and other corporate services, which creates a lot of hassles for back-office staffs and puts burdens on employees juggling credit balances,” Singh said……’

One of the nifty features associated with digital expense management capabilities is the ‘buy, take a picture and file a report’ workflow that eliminates the incredibly annoying multi-platform and form factor processes that remain relatively normal.  Making employee travel and business buying easier is a worthy cause for investment. Your workers will like you more for it.  Worth a look.

‘After testing the solution for several months with more than a dozen companies, Center is launching CenterCard, a Visa debit card attached to a mobile app that companies may distribute to all or some of their employees with the ability for managers to switch card availability on or off.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post How this Product is Making Corporate Spending Easier to Manage appeared first on PaymentsJournal.

U.S. payments industry watchers had a ringside seat to some big M&A deals in 2019. Now there is some early action across the pond as Worldline and Ingenico, both based in France, have announced they will become one.

While this nearly $9 billion deal pales in comparison to last year’s Fiserv-First Data ($22 billion) and FIS-Worldpay ($35 billion), it nonetheless represents a sizable acquisition. At first glance, Worldline-Ingenico appears to be synergistic, especially given that both companies have mostly been at different ends of the payments value chain. Ingenico’s mega customer base of merchants and POS expertise give Worldline a more vertically integrated offering.

Worldline is not exactly a household name in the North American payments landscape. But the company is well positioned in Europe, South America, and Asia. Worldline is also a prolific deal-maker and has significantly grown in size over several years. The Ingenico acquisition gives Worldline a beachhead in the U.S. and is another example of a consolidation deal within the payments industry. For 2020, it won’t be the last.

A TechCrunch article, excerpted below, discusses more on the topic.

Some consolidation is afoot among the payments behemoths of Europe. Smaller, newer fintech companies are eating into their market dominance by adapting faster to changing spending habits, while also looking to capitalize on economies of scale.

Today Worldline, a financial services company that provides everything from in-store point-of-sale terminals through to online payments, data analytics, banking and fraud protection, announced that it would acquire Ingenico, the huge point-of-sale terminal provider that controls 37 percent of the market globally, in a cash and share deal that gives Ingenico a valuation of €7.8 billion ($8.6 billion at today’s exchange rates).

The deal underscores two big themes in fintech, and specifically payments. The first is that the shift in payments and spending habits to more digital platforms has meant an increasing amount of fragmentation in the payments space, with each player getting a cut of the transaction: this means that a company doing business in this area needs economy of scale in order to make decent returns. The deal will give both companies a lot more economy of scale.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Big European Payment Players Fashion Deal With French Flavor appeared first on PaymentsJournal.

In every industry, organizations are in constant competition for market share in order to stay profitable and retain the greatest number of customers. As we’ve seen across the board, brand loyalty is a direct lane to financial success, and the key to maintaining happy and satisfied consumers is providing the most frictionless and simplified user experience possible. In healthcare especially, where the stakes are high, emotions are often involved, but confusion is rampant, the need to create a simplified, easy-to-manage experience is more important than ever.

While clinical care is of course a top priority for providers, new data from our 2019 Patient Payment Technology Report reveals that the payment and billing process is a huge factor influencing patient loyalty. However, the data also shows that many providers have not yet answered the call for simplicity, and that poor experiences are directly affecting both patient acquisition and retention.

Hospitals Are Losing Potential Patients before They Walk through the Door

Consumers are over the headache of trying to understand their medical bills, and in the age of online research, they’re more often than not evaluating their options before even seeking care. With peer reviews and recommendations easily accessible at the click of a mouse, providers known for a less-than-positive payment and billing process are putting themselves in danger of losing prospective patients – prior to any care delivery.

For many patients, a less than satisfactory payment and billing process can easily turn them off from a specific hospital or medical center. In fact, data from the 2019 Patient Payment Technology Report revealed that more than three out of every four consumers (76%) consider the billing and payment process to be somewhat or very important when evaluating a new medical provider.

This means that if a given institution has a reputation for confusing or frustrating billing, patients are actually disqualifying them at the very onset of their research, regardless of their quality of clinical care. 

Transparency Tops the List of Patient Desires

Transparency, or lack thereof, makes the healthcare headlines on a seemingly daily basis, and consumers are becoming increasingly more impatient with the current landscape. When it comes to price—both in terms of the cost of care and also clear and intuitive payment processes – the industry has seriously fallen behind the curve, and patients are noticing. In fact, the Patient Payment Technology Report revealed that nearly half (45%) of healthcare consumers consider price and cost transparency as the factor that would most greatly deepen their loyalty to a specific healthcare provider. Similarly, 45% of patients noted that transparency was the most important aspect of the payment experience.

Whether it be shopping for a car, a TV, or even a house, consumers have up-front price transparency in just about every other industry that exists. Healthcare, however, has yet to catch up, leaving patients irritated and unsatisfied. While some of the related pain points are out of a provider’s hands, others, such as clear, concise, and easy-to-understand bills are well within their power to provide, and those who alleviate the avoidable stressors will see a direct impact in satisfaction.  

Patient Expectations Are Increasing, but Satisfaction Is Lagging

As we’ve seen across the board, consumers have increasingly high expectations, and industries like retail have gone above and beyond to listen to these desires and take the steps to quell any inconveniences. However, healthcare has yet to instill a similar sense of satisfaction in patients, leaving them in frequent doubt, especially with regard to payments and billing. Poor experiences unfortunately lead to lowered trust, and with data showing that only 1 in 3 consumers have high confidence that their medical bills are even accurate, it’s no wonder why satisfaction is low.

This can be particularly devastating for providers, as this lack of satisfaction directly translates to lost profits. In fact, 42% of consumers reported they would not return to a provider if they were charged incorrectly or didn’t know what they were charged for, and more than a third (34%) said a difficult and unorganized billing and payments process would prevent them from seeking further care as well.

While major issues like these of course top the list of things providers must avoid, patients also increasingly demand flexible and assorted payment options, with 28% opting to leave a provider if their preferred form of payment was not accepted. While credit and debit cards (including HSA/FSA cards) were still the most preferred options, many patients reported the desire to use a number of additional payment methods, including check or ACH (28%), cash (35%), a flexible recurring payment plan (22%), and even PayPal (26%). 

The Overall Impact

Healthcare providers are under a constant microscope, and given the current political and cultural debate surrounding healthcare, that is unlikely to change anytime soon, so providers must work increasingly hard to alleviate the concerns that consumers have raised. Those that ignore the call are putting themselves in a position to lose patients and erode their brand loyalty, even if their clinical care is top-notch. An organization’s financial success is dependent on the volume of customers who buy into their brand, and the data shows that payments and billings have a tremendous effect on this process. Whether it is a positive or a negative effect, however, is largely in providers’ hands to control.

Consumers want more options, greater clarity and a better payment experience—and providers need to start listening.

The post Payment Process Can Make or Break Patient Loyalty appeared first on PaymentsJournal.

Ingenico Group (Euronext: FR0000125346 – ING), the global leader in seamless payment, today reported record breaking transaction volumes and payment authorization rates on its most successful Singles Day ever. The company outperformed last year with more than four times as many online transactions as 2018’s event and recorded its highest number of Transactions Per Second (TPS) ever. During the event, Ingenico’s Amsterdam-based ePayments division processed millions of payments seamlessly for leading Chinese-owned websites and marketplaces including AliExpress, Tmall and DHGate.

Analysis of payment data from Ingenico ePayments, one of the first international payment service providers to establish a significant presence in China, shows that the historically Chinese festival is fast becoming a truly global phenomenon. Singles Day is the largest ecommerce shopping day in the world, beating rival peak sales days Black Friday and Cyber Monday and this year’s reported growth was particularly strong in the US and Russia for the company.

One of Ingenico’s focuses over the last few months has been to transform how international ecommerce companies operate in China. By introducing a suite of payment methods that fully caters to the preferences of local consumers, Ingenico can now enable online businesses to gain better access to one of the world’s most significant online markets.

Nick Tubb, VP Commercial Affairs at Ingenico ePayments, said: “Chinese ecommerce continues to grow at an impressive rate and Singles Day is the most extreme example of the opportunity it presents. This event was about overseas customers buying from the Chinese marketplace giants as they expand their international reach, but conversely international online businesses looking to successfully expand into China and tap into the immense customer base there should understand the market is very dynamic and completely unique. With the right partner though, the reward is more than worth it”.

To learn more about Ingenico’s offer for China visit ingenico.com/china.

The post Ingenico Reports Record Breaking Singles Day appeared first on PaymentsJournal.

B2B payment processes are outdated and inefficient — and customers are noticing. Nearly half of all B2B buyers have not completed a purchase because their preferred payment method wasn’t an option. Left unsatisfied, customers are quick to abandon their carts and shop elsewhere.

Customers expect their professional buying experiences to mirror their personal buying experiences. Payment processes must support modern expectations of convenience and personalization. When they don’t, buyers run into significant pain points. This leads to cart abandonment, high customer attrition and low levels of loyalty.

B2B sellers wish to optimize their payment processes and provide frictionless purchase experiences for their customers. They must first learn the most common buyer pain points. Once equipped with that knowledge, they can work to update the payment experience. This will increase customer satisfaction and long-term loyalty with the following upgrades:

Multiple payment options 

Credit cards alone won’t keep B2B customers satisfied. Their subsequent problems are a common roadblock for sellers who rely on them. In fact, 76% of B2B buyers have encountered an issue preventing them from completing an online purchase with a credit card. Issues such as surcharges, insufficient lines of credit and fraud plague the credit card buying experience and thwart customer satisfaction.

To revamp outdated payment processes and solve these pain points, B2B retailers can offer multiple payment options. These include invoicing at checkout with 30-, 60- or 90- day terms. And with 74% of B2B buyers purchasing more products or services from a vendor when they are given the choice to pay by invoice, this is more than just a customer experience win. Giving buyers the option to pay on terms increases average order volume, boosting revenues year-over-year and inspiring long-term loyalty.

Omni-channel payment experiences 

Offering multiple payment options solves one pain point. However, without access to the payment options across all channels, buyers will still remain unsatisfied. Customers need an omni-channel buying experience to support their needs — 98% of B2B buyers believe it’s important to have the same purchasing experience across all channels, from online to in-store.

Omni-channel purchase experiences must also be flexible: Buyers should be able to experience the benefits of each channel regardless of which touchpoint they are currently shopping. For example, things like purchase controls, pricing, credit limit visibility, integrations and order history should remain consistent across channels. In fact, 54% of B2B buyers agree that consistency across all channels would improve their buying experience.

In addition to keeping your currently omni-channel touchpoints consistent, stay open to adding new payment options. The payments landscape is constantly evolving, so it’s critical to keep up and continue meeting buyers where they want to make purchases.

Efficient websites and portals 

B2B buyers are frequently frustrated by inefficient websites and portals when making purchases for their companies. And, nearly 60% of buyers have not completed a purchase for their company because the checkout or process took too long. Beyond purchasing, customers who face delays of more than two days during the onboarding process are less likely to complete a purchase. 

To make the payments experience more efficient, B2B sellers must provide a seamless, omni-channel process supported by smart integrations and machine learning that anticipates customer needs. Plus, more than 50% of B2B buyers place a high priority on receiving 24/7 customer service — which means fast, efficient service is critical.                                                                       

Loyalty begins with modern payment processes 

Meeting expectations and providing fast, convenient service is critical to gaining and retaining loyal, repeat customers. B2B buyers expect modern payment processes that are comparable to their personal buying experiences. With the right mix of payment options, omni-channel support and efficient backend processes, sellers can solve cart abandonment issues, boost the bottom line and attract loyal buyers.

About the author:

Brandon Spear is the president of MSTS, a global B2B payments and credit solutions provider. Brandon leads MSTS with expertise in managing large, diverse global teams. His strength is discerning and focusing on the most important challenges facing an organization at a particular point in time and unifying all stakeholders behind accomplishing a set of specific goals. Brandon has a unique ability to connect across all levels of an organization and motivate staff with diverse skill sets, while ensuring common alignment and great results.

The post B2B Buyer Expectations Are Evolving — Can Your Payment Processes Keep Up? appeared first on PaymentsJournal.

Small businesses often rely on financial services to help them manage their day-to-day operations. These services can be essential for small businesses, but they can also be very expensive. One way that small businesses can reduce their costs is by tiered pricing. Under this type of pricing, businesses are charged different fees based on their usage. For example, a small business that uses a financial service once a month may be charged a lower fee than a business that uses the same service multiple times per week.

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23% of small businesses have a tiered pricing transaction fee schedule, but they’d prefer:

• While 23% have tiered pricing by volume – only 13% of small businesses prefer it
• The most popular pricing method is flat pricing (eg. 2.75%), used by 37% of market and preferred by 38%
• 15% of small businesses would prefer ‘all in’ pricing – but only 10% of small businesses use that method
• Interestingly, 9% of small business owners don’t know their pricing method, and 11% aren’t sure what they’d prefer
• Two popular small business POS providers, Clover & Square, have fees ranging from 2.3% to 3.5%
• Clover & Square will also include a flat $0.10 – $0.30 per transaction

About the report

Small businesses suffer from a lack of expertise, financial services, and capital, leading to a failure rate of close to 50% within five years of start-up, according to the U.S. Small Business Administration. However, the market has been difficult for merchant acquirers to serve, due to price sensitivity, high risk, and a high cost of sales. A new research report from Mercator Advisory Group, Square and Clover Delivering Merchant Services Beyond Payment Acceptance examines the success of Square and Clover as examples of a new approach to serving small businesses using marketplaces that provide choice and flexibility while using commodity hardware.

“Instant onboarding is the sizzle, not the steak. While digitized and fast merchant onboarding looks great, small businesses need to understand the fee schedule and the complete range of solutions and apps that directly apply to their specific operational needs and future growth,” commented Raymond Pucci, Director, Merchant Services, at Mercator Advisory Group, and author of this report.

This report is 16 pages long and has 5 exhibits.

Companies mentioned in this report: Android, Apple, Apptizer, Bank of America Merchant Services, Celtic Bank of Utah, Clover, DoorDash, First Data, Fiserv, Intuit, PayPal, Poynt, Sam’s Club, Square, and Walmart.

The post 23% of Small Businesses Have a Tiered Pricing Transaction Fee Schedule, but They’d Prefer… appeared first on PaymentsJournal.

More and more people prefer online payment.

It’s well-known that tech-savvy millennials and Gen-Xers prefer online shopping and cash-free (and now credit-card-free as well) payments.

However, according to the report by CNBC, the number of online payment admirers keeps growing, since more and more Baby Boomers get introduced to modern technology and its perks, including high security and versatility.

The general landscape of mobile payments shows rapid growth and development. Current stats on online payments show that:

• The use of mobile payments and e-Wallet is expected to increase from 15% last year to 28% by 2022.
• On the other hand, the use of cash payments is expected to decrease from 32% last year to 17% by 2022.
• It is reported that global mobile transactions will be worth more than $4 trillion by 2023.

Since the demand for online payments is only expected to grow, more and more businesses are getting ready to invest in the technologies that will make the process of online payments faster.

There are, however, simple steps that you can follow to speed up the payment process on your website.

Let’s take a look.

1) Allow No-Sign-In Payments

It’s a common practice for e-commerce businesses and online payment systems to have their customers sign-in first, before completing the payment.

Although it might seem that you’re taking an extra precaution step, sign-in forms are the reason why your website conversion rates are so low.

While browser autofill feature may speed up the payment process a little bit, your customers will still have to fill out the tabs that don’t allow autofill, hence increasing the time of completing the transaction.

With current technology, you can avoid required sign-in forms and still keep the online payment process transparent. Current security measures, like SSL certificate, PCI Data Security Standard compliance, tokenization, 3D secure, etc., allow fraud prevention, the extra protection of sensitive information, and data encryption without requiring a sign-in form.

You can, however, still offer a sign-in form without making it mandatory. Apple Store offers such an option, inviting returning customers to sign in, and for guests to proceed to checkout without creating an account:

Sign-in forms significantly prolong the completion of a payment process. However, with today’s options for better online payment security, you can avoid this unnecessary step and speed up payments on your website.

2) Avoid Redirecting

Online businesses and e-commerce shops often use online payment services like PayPal. And, while PayPal is a secure payment service to use, there is one main disadvantage to it – it redirects buyers from your website to PayPal’s website to complete the transaction.

While businesses still continue working with PayPal (as it’s one of the popular payment platforms), some report that they’ve noticed it affecting the purchase decisions of some consumers. An international real estate company Flatfy reported that 15% of their customers don’t complete the payment due to PayPal redirecting them to their website.

Thus, besides delaying the transaction, redirecting causes other issues that may affect your business, namely:

• Abandoned carts
• Lower website conversion rates
• Less trust in a brand in general

Redirecting to another website to complete money transactions also raises a question, who to contact in case any issues occur.

So, since redirecting causes so many issues that slow down the payment process, offering a variety of payment options that don’t require redirecting to another website may be a good solution to speed up money transactions on your website.

3) Specify Payment Information

Although you may ditch a mandatory sign-in form, you will still have to require essential payment information to complete the transactions.

Some websites ask buyers to provide their full name, location, date of birth, etc., besides the payment details. This information is not necessary and is hardly ever required for online payment, but rather for the company to keep track of their customers.

For the customer, however, it is another bureaucratic obstacle, which adds up to negative customer experience. A study by Forrester conducted several years ago has shown that 11% of U.S. adults abandoned an online purchase because a website was asking too much information.

This is still true today. However, the average customer has become even more demanding, and this percentage is likely to have grown.

For your website and business in general, this may result in lower conversion and customer satisfaction rates. Since your customers want a more seamless experience, when buying your products, try not to put extra weight on them by asking too much information.

Final Thoughts 

No matter, how advanced online payment technology gets, you still slow it down by requiring to fill in the forms that ask too much information and redirecting your customers to other websites in order to complete the transaction.

If you want to speed up the payment process on your website, try avoiding these mistakes. Thus, you’ll contribute to positive customer experience, keeping your conversion and satisfaction rates high.

Ryan is a passionate writer who likes sharing his thoughts and experiences with the readers. Currently, he works as a digital marketing specialist at https://flatfy.ro. He likes everything related to traveling and new countries.

The post How to Speed Up the Payment Process on Your Website appeared first on PaymentsJournal.

Mobile app is the way to go for businesses owing to the numerous benefits offered by this platform. Your users are on this platform, and you can accomplish your reach goals only when you cater to their needs via engaging solutions.

If you observe the app store, you will see that every day a new app is launched. As of date, Statista report indicates, there are close to 1.96 million apps available on the Apple store, and 2.46 million apps on the Google play store.

As apps are increasing on the app store, a number of apps are finding their way out of the mobile phones. Every day, at least one app is being uninstalled somewhere. It could either be the user interface which is not friction free or a hard learning curve that costs you an uninstall.

One major element that you need to consider when developing a mobile app so as to reduce the uninstall rate is the payment gateway. A lot of users prefer paying online, which is why you need to have a gateway that is smooth, seamless and offers instant payment solutions.

If you are planning an Uber-like app for ride sharing or pooling services, then payment gateway plays a crucial role in engaging the audience. Here we will take you through the different types of payment gateways.

How does a payment gateway work?

Before moving on with choosing a good payment gateway, you need to understand what it is and how it works.

A payment gateway is basically an e-commerce service that authenticates the credit card transactions for both the online and offline stores. Basically, the merchant is connected with the processing platform. The payment gateway integration is crucial to the success of the online payments, which offers the actual convenience of making online purchases to the customers.

When the user clicks on “Pay Now”, they are transferred to the payment gateway. It is here that the customer selects the payment method, whether it is a credit card or other transaction method. Once that has been confirmed, the customer is taken to the bank’s website, where they need to enter the details. Once you have confirmed the details, you will be notified if your transaction was a success, and you are taken back to the payment gateway, where the transaction is completed.

Payment gateway offers the following functionality that helps improve transactions.

• Encryption of the data by the web browser, which is then sent to the payment processor
• The payment processor then sends the transaction data to the card’s issuing bank, which either authorizes or denies the request
• Once the authorization is received, the same is forwarded to the payment gateway, which transmits it to the website’s interface

Apart from this, the gateway verifies the address, conducts AVS checks, performs identity morphing techniques etc.

Now that you are aware of how the payment gateway works, let’s understand how you can choose a good payment gateway for your websites or mobile app.

Choosing the ideal payment gateway

1. The first concern every merchant faces when choosing the payment gateway is the security. It is important for your customers that the financial information they share on the ecommerce website remains secure. As a merchant, you need to adhere to this need. Apart from the security of the information, they are also looking for PCI-compliance, as it is important especially for credit card payments. You should ideally choose a layered payment gateway for perfect encryption of the
   1. The payment gateway comes with a high level encryption, also known as the SSL encryption which is 128 bit. This ensures that all the security breaches are completely avoided
   2. Your second encryption level is the digital signature that you will introduce into the system. In case the person hacking into your system does get the account ID, they would never be able to hack into your account, as it has been safeguarded with the digital signature
   3. You should always incorporate dynamic IPs within the system, so that if your account is used by another IP, it is automatically

This three-layer encryption will ensure that the payment gateway is serious about taking active security measures for your ecommerce site.

2. Do you want to go with a hosted payment gateway or you want to opt for an integrated payment? The answer will help you choose a good payment gateway for your ecommerce

application. The hosted gateways are easier to set up, and ideal for the new stores. However, this gateway will hamper the conversion rates. It can be quite complicated, as a result, people will not prefer checking out with the hosted gateways.

The integrated payment gateway, on the other hand, allows your customers to checkout without leaving your store. They need to input all the data while they are on the ecommerce website, and it can translate into direct orders. If you are choosing a hosted gateway, make sure to simplify the process or add an on-boarding guide for the ease of use.

3. The customer experience plays a crucial role when choosing the payment gateway for your mobile app. People who are opting for an Uber-like experience would not want to wait too long to make the payment. They want a similar method to complete the payment as well. That’s why you need to choose a gateway that enhances the experience through one-click, and seamless payment methods. People tend to use multiple payment modes, which is why you should choose a gateway that allows users to pay via their chosen method. For instance, the gateway should accept payments through wallets, credit cards, debit cards etc. when choosing the payment gateway for the Uber-like app, you should choose the one that is optimized for the mobile app
4. Uber is a global brand, which is why it needs a gateway that can be used by international customers as well. If you are planning to go global, then you need a gateway that caters to international payment
5. The fee structure plays an important role when choosing the payment gateway. Each gateway has a typical structure, which you need to keep in mind. Have a budget defined for the gateway, and make sure the structure defined by the gateway fits your budget
6. Customer support is essential whenever you are integrating a third party solution to your app. If you get stuck somewhere, you need to be able to go to someone who can bail you

Summing up

You are bound to scale your app in the future, which is why you need to choose a payment gateway that makes scaling the app seamless and easy. You should also choose a gateway that will update itself to integrate the future currencies such as Bitcoin. The business model for the gateways also need to be considered.

Always keep your options open. If you want to move to another gateway that offers better experience for your riders, then make sure you can make the move in a hassle-free manner.

Author Bio

Yuvrajsinh is a Marketing Manager at Space-O Technologies, a firm having expertise in Uber like app development. He has over 90k LinkedIn followers. With the help of these followers, he has helped over 150 job seekers to find their new job in India. He spends most of his time researching the mobile app and startup trends. He is a regular contributor to popular publications like Entrepreneur, Yourstory, and Upwork.

The post How to Choose the Best Payment Gateway for Your Uber-Like App? appeared first on PaymentsJournal.

BHMI, a leading provider of enterprise software applications and creator of the Concourse Financial Software Suite™, announced that Payshop has selected Concourse to support the back office processing for all electronic payment transactions going through its network.

Portugal-based Payshop serves Europe through an extensive portfolio of payment services. With the implementation of BHMI’s Concourse solution, Payshop will create a unified back office application environment that offers a seamless support system for all the payment services it provides, including access to every payment lifecycle; the ability to perform transaction reconciliation between data sources; and successful management of exception items. The partnership with BHMI provides Payshop with true omni-channel capabilities, giving Payshop the ability to more readily implement additional products and services to support new markets as needed. Furthermore, Concourse’s enhanced support of the ISO 20022 standard and the payments domain in the Single European Payments Area (SEPA) will allow Payshop to harmonize cashless transactions and improve efficiency of cross-border payments.

“Employing a flexible and unified back office solution was critical for us as we continue to grow,” said Tiago Mota, CEO of Payshop. “After careful and extensive review, we determined that the Concourse Financial Software Suite was the right choice as it ideally supports Payshop’s strategic objectives.”

“Our core competency at BHMI has always been our proven ability to provide flexible and reliable business applications architected to work with any kind of transaction, financial or otherwise, with the scalability to meet our clients’ demands,” Dr. Jack Baldwin, CEO of BHMI. “We look forward to supporting Payshop and helping provide the unified back office processing solutions they need to continue their growth trajectory in retail and digital channels.”

About Payshop

Payshop is a subsidiary of Banco CTT and part of the CTT Group.  It provides a diverse portfolio of payment services offered to both Portugal citizens and client businesses within the CTT Group. This includes payment services such as billing collections, mobile top-up, toll payments, tax payments, and much more.  For more information, please visit www.payshop.pt.

About BHMI

BHMI is a leading provider of product-based software solutions focused on the back‑office processing of electronic payment transactions. The company is best known as the creator of the Concourse Financial Software Suite™ – a unique integrated collection of back‑office products allowing companies to quickly and easily adapt to the rapidly changing world of payments. Concourse is a cohesive and integrated package, including settlement, reconciliation, fees processing, and disputes workflow management, that reduces the cost and complexity of back‑office processing. Concourse’s continuous processing, near real‑time architecture and powerful rules engine is ideally suited for new payment initiatives like P2P and enables companies to perform back‑office processing for any type of payment transaction. To learn how your company can benefit from the power and flexibility of Concourse, please visit www.bhmi.com.

The post Payshop Selects BHMI to Support Seamless Back Office Operations and True Omni-channel Capabilities appeared first on PaymentsJournal.

There were many reasons why Mastercard purchased faster payments platform developer Vocalink in 2016. One major reason is the platform’s Request to Pay capabilities.

This is a feature where a business sends a payment request to a consumer (or small business) with an associated invoice or bill details. The consumer can then effortlessly push a credit to the business through a card transaction or real-time payment.

This capability has launched, or really re-launched, in the U.K. as Finextra reported:

Request to Pay is a secure messaging service that allows billers and consumers to communicate before payment takes place. Designed to put control in the hands of the consumer, the Request to Pay service will provide more options and flexibility to settle bills between businesses and individuals transparently.

Businesses will also be able to communicate with consumers regarding the payment, receiving more information and data about payment preferences and habits that will enable more efficient payments in future. For example, consumers will be able to tell the billers they would like to pay in full, in part, request additional time to make a payment, decline to pay or begin a dialogue with the requester.

Vocalink’s Request to Pay solution in the UK, is the latest addition to Mastercard’s portfolio and supports the business’ global effort to bring innovation to bill payment ecosystems for the benefit of consumers. The solution, which will launch in the UK in Q1 2020, following accreditation by Pay.UK, is co-developed with Exela Technologies, a world leader in business process automation.

The focus of Request to Pay is to provide a better bill pay experience for consumers, banks and businesses creating efficiencies and an improved user experience:

Request to Pay’ draws upon Mastercard’s existing expertise and experience in innovation across the UK market and the US, where it is launching Mastercard Bill Pay Exchange that links to The Clearing House’s (TCH’S) RTP infrastructure and is built with technology from Vocalink, a Mastercard company.

What are the benefits of Request to Pay?

Billers will be able to send bills in electronic format directly to consumers, bypassing paper-based processes and associated costs. They will have greater transparency and certainty of when and how bills will be paid, and also benefit from a simpler payments reconciliation process.

Request to Pay in theory could be used to facilitate purchase transactions, but that doesn’t appear to be a current focus.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Mastercard Launches an Improved Bill Pay Solution in the U.K. appeared first on PaymentsJournal.

Worldpay, now FIS, and First Data, now Fiserv, have placed winning bets on the current U.S. trend of many states legalizing sports betting. Worldpay and First Data have experience in sports gambling and are now riding the wave of sports gambling, including the wildly popular fantasy football leagues that will soon be kicking off as the upcoming college and pro seasons commence.

Fiserv and FIS will welcome the vertical market expertise that First Data and Worldpay bring to the table. We are seeing ground-breaking sports betting relationships, with pro sports leagues teaming up with casino companies—Major League Baseball with MGM and the National Football League with Caesar’s. Meanwhile ESPN provides wall-to-wall coverage of sports betting topics on its “Chalk” platform. What’s the over/under on how many more payments vendors and fintechs will be getting in on the action, too?

A PaymentsSource article, excerpted below, covers the topic further:

Both FIS and Fiserv hope to use acquired gaming technology from Worldpay and First Data, respectively, to navigate the complicated payment processing, risk and regulatory requirements of sports betting. Both of these deals closed in July, giving the combined companies free rein to move ahead with new strategies.

“If you own both legs of the stool for sports gambling, and can do issuing and the services off of the same platform, the value is tremendous,” said Joe Pappano, the senior vice president of gaming at Worldpay, now part of FIS.

Both Worldpay and First Data bring gambling processing businesses and experience to their new owners. Worldpay has been processing sports betting payments in the U.K. for years, where it was legalized much earlier; while First Data has offered a digital gaming payments platform for about five years.

“The legalization of online sports betting is bringing added diversity to the traditional brick and mortar world of gaming, first to the internet gaming side and more recently to the palm of our hands via mobile gaming experiences,” said George Connors, who oversees gaming solutions at First Data, now part of Fiserv.

Two of Fiserv’s services for gaming include an ACH warranty, which helps enable access to bank accounts for the casino guest and mitigate risks for gaming establishments accepting ACH payments. The company also offers digital disbursement capabilities, enabling clients to provide digital payouts to players in real time.

Overview by Raymond Pucci, Director, Merchant Service at Mercator Advisory Group

The post Payments Firms Betting On Sports Gambling Action appeared first on PaymentsJournal.

Baldwin Hackett & Meeks, Inc. (BHMI), a leading provider of enterprise software applications and creator of the Concourse Financial Software Suite™, announced that Early Warning Services, LLC, the network operator behind the Zelle^® fast payments network, has selected Concourse to support disputes management for payment transactions processed by the Zelle Network^®.

The Zelle Network connects financial institutions of all sizes, enabling consumers and businesses to send fast digital payments to other parties with bank accounts in the U.S. Early Warning Services selected Concourse with the primary focus on addressing the unique dispute/chargeback management requirements of Zelle.

“BHMI’s Concourse solution is ideally suited for a fast payments network like Zelle,” said Lou Anne Alexander, Group President of Payments for Early Warning Services. “We chose Concourse not only because it meets our disputes processing needs, it can also provide integrated back-office support services such as payment research, settlement, and reconciliation across the Zelle Network.”

“Our mission is to provide flexible and reliable applications to support the overall success of our client’s businesses,” said Dr. Lynne Baldwin, President of BHMI. “Zelle provides an easily accessible and useful service for a wide range of customers. We are pleased to support Early Warning Services and Zelle, and helping Zelle better serve its clients across the U.S.”

About Baldwin Hackett & Meeks, Inc.

Baldwin Hackett & Meeks, Inc. (BHMI) is a leading provider of product-based software solutions focused on the back-office processing of electronic payment transactions. The company is best known as the creator of the Concourse Financial Software Suite™ – a unique integrated collection of back-office products allowing companies to quickly and easily adapt to the rapidly changing world of payments. Concourse is a cohesive and integrated package, including settlement, reconciliation, fees processing, and disputes workflow management, that reduces the cost and complexity of back-office processing. Concourse’s continuous processing, near real-time architecture and powerful rules engine is ideally suited for new payment initiatives like P2P and enables companies to perform back-office processing for any type of payment transaction. To learn how your company can benefit from the power and flexibility of Concourse, please visit www.bhmi.com.

The post BHMI Selected to Support Back-Office Functionality of the Zelle Network® appeared first on PaymentsJournal.

Making online purchases is extremely convenient. You can browse several websites, choose something to your liking, add it to a cart, pay, and voila – your precious item is almost on its way to your hands. However, there is one moment that might be problematic here, and this is the payment. Processing payment online, you need to be very attentive not to become a victim of fishing or any other type of web fraud. Most websites use modern technologies to prevent your sensitive information. However, even if you are acting wisely and use the most reputable resources, there is still a chance to lose your password and personal data. Let’s discuss some essential aspects to consider when buying things online. 

Keep your PC safe from harmful malware

Update your browser and OS regularly to ensure that they are using the latest security measures. Some types of malware programs sneak right into your operating system or browser to steal your payment information. Track the weak points in your safety system, make updates, and use security optimizer to avoid this.

Make sure that the website connection is secure

First of all, look at the address bar. Mind that ordinary website connection uses http://. This protocol is enough to let you browse websites. At the same time, secure connection that protects your data uses https://. Pay special attention to this moment when you are headed to a payment page.

Get yourself an advanced antiviral program

Next, take care of an efficient anti-malware program. Protect your laptop, computer, mobile phone, tablet, and any device that has an Internet connection. When making an online payment, make sure that your malware protector is on. Also, always keep it updated because newly created malware programs are issued all the time, and your application must be able to detect them. Automatic updates are less efficient because transformed and new viruses are included in databases within specific periods. As such, you need to update yours manually.

Use trustworthy sites

Never pay directly to the shop or its owner. Every reputable site cooperates with one or another payment processor like PayPal, Stripe, Adyen, etc. They keep your information safe and protect you from suspicious transactions. 

Pay from your personal computer only

Never pay for anything with the help of public computers. It is not safe to use the one located in your college library or an Internet café. Thieves can easily install stalking software or hardware on them and get access to your data. As a rule, they act smartly, and you cannot notice that something is wrong with this or that computer.

Use your credit card

Credit cards were created specifically for online payments, so use them when you need any service or item from the Internet. Some online tools help students study better, and you can use a credit card to pay for a subscription or benefit from the best free plagiarism checker, which is safer. Credit card processing companies save your card from being misused. You are recommended to set a payment limit, and a thief won’t be able to extend it. So if you will accidentally become a victim of one, at least you won’t lose all of your cash.

What is more, there is a chance that you will recover the stolen money if you contact a credit card provider on time and explain the situation. On the contrary, debit cards are connected to the bank account directly, don’t have any payment limits, and are hard to recover. This makes them risky to use online. 

Come up with a strong password

If you take a look at any credit card basics, the very first rule you will see there is: never use a password that is easy to guess. Any common passwords, including your name or date of birth, won’t do! To create a secure password, use both numeric characters and letters in your password and make sure that it is longer than six symbols. 

There are several points to sum up. First, never purchase anything from the Internet shops that look suspicious. Second, avoid any offers that seem too good to be true. Third, choose large and reputable companies only, but never rely on them entirely when it comes to payment security. Install and update your antivirus program, check the website connection for safety, make your password impossible to guess, and use your own devices only. If you believe that your card information has been stolen, hurry up to contact your bank. Whenever you make online purchases, be attentive! Happy shopping!

Author’s Bio:

Susan Wallace writes articles and blog posts for various informational platforms. Her primary focus is technology. She researches the newest products and trends, speculates on how they change our lives, shares guidelines, and tries to keep up with the fast pace of digital development.

The post Processing Payments on the Web: 7 Things Students Should Consider appeared first on PaymentsJournal.

As the millennial generation increasingly becomes the dominant force in today’s global economy, more and more businesses are embracing digital transformation to meet the demands of this digitally savvy demographic. The gambling industry has embraced new technologies to meet the demands of this digitally-oriented audience, introducing new online gaming options that offer an improved customer experience.

According to the American Gaming Association, online gambling is growing in popularity. The Association found that 48 percent of payers prefer online gambling for the convenience of being able to play anytime, anywhere; while 24 percent choose it for the comfort of playing at home or through the convenience of a mobile device. Six percent indicated they prefer online gambling because it allows them to remain anonymous.

For all player groups, online gaming presents a tremendous opportunity for the industry. A recent industry report projects that the online gambling and betting market will reach nearly $95 billion globally by 2024, growing at a CAGR of approximately 11 percent.

Challenges of Managing a Complex Technology Ecosystem at the POS 

Whether online or in a physical location, one of the critical challenges the industry faces is effectively managing a complex technology ecosystem at the point of sale. Consumers expect casinos and online gaming sites to offer a broad range of payment options providing frictionless commerce across all channels and devices. At the same time, industry stakeholders need payment processing solutions that help reduce the cost of acceptance and optimize interchange pricing.

In delivering a superior customer experience, data is also playing an increasingly important role. More and more industry players are looking to leverage analytics in order to track customer behavior and create personalized offers delivered in real-time when they are most relevant.

Players and companies alike are mindful of security and fraud prevention. Casinos and online gaming sites are beginning to avail themselves of state-of-the-art encryption and tokenization technologies that safeguard sensitive customer card-payment data throughout the entire transaction.

A Limitless Future of Innovation for the Gambling Industry

As the industry transforms, new forms of technology are promising to change the gaming experience itself. Just a few of these innovations include:

• Augmented Reality – This advanced, highly-personal technology allows players to become completely immersed in the thrills of the casino experience. They can interact with real people and live dealers in the virtual environment – all while remaining in the comfort of their own homes.
• Virtual Reality – Similar to Augmented Reality, this technology allows players to enter a completely virtual gambling environment. Real-time graphics create a completely immersive 360-degree experience that enables players to gamble virtually any place in the world, yet do so without leaving their living room couch.
• Mobile Gambling – As mobile devices become nearly ubiquitous, online gambling through smartphones is bringing greater convenience to gamblers who can now play anywhere, whether it’s riding a train to work or while watching TV.
• Artificial Intelligence (AI) – The gambling industry is coming to recognize the power of AI and machine learning, allowing businesses to leverage the mountains of data available to create better in-game user experiences and greater real-time personalization for customers.
• Blockchain and Cryptocurrencies – The introduction of blockchain technologies and cryptocurrencies to the gambling industry are allowing players to make fast and secure transactions that don’t reveal any personal or bank details. Casino operators also benefit because of the secure nature of these transactions.

These transformative changes are creating a very bright future for the industry and a bet well worth taking.

The post Digital Transformation is a Safe Bet to Positively Impact the Gambling Industry appeared first on PaymentsJournal.

Making online purchases is extremely convenient. You can browse several websites, choose something to your liking, add it to a cart, pay, and voila– your precious item is almost on its way to your hands. However, there is one moment that might be problematic here, and this is the payment.

While processing payment online, you need to be very attentive not to become a victim of fishing or any other type of web fraud. Most websites use modern technologies to protect your sensitive information. However, even if you are acting wisely and use the most reputable resources, there is still a chance to lose your password and personal data. Let’s discuss some essential aspects to consider when buying things online.

Keep your PC safe from harmful malware

Update your browser and OS regularly to ensure that they are using the latest security measures. Some types of malware programs sneak right into your operating system or browser to steal your payment information. Track the weak points in your safety system, make updates, and use security optimizer to avoid this.

Make sure that the website connection is secure

First of all, look at the address bar. Mind that ordinary website connection uses http://. This protocol is enough to let you browse websites. At the same time, secure connection that protects your data uses https://. Pay special attention to this moment when you are headed to a payment page.

Get yourself an advanced antiviral program

Next, take care of an efficient anti-malware program. Protect your laptop, computer, mobile phone, tablet, and any device that has an Internet connection. When making an online payment, make sure that your malware protector is on. Also, always keep it updated because newly created malware programs are issued all the time, and your application must be able to detect them. Automatic updates are less efficient because transformed and new viruses are included in databases within specific periods. As such, you need to update yours manually.

Use trustworthy sites

Never pay directly to the shop or its owner. Every reputable site cooperates with one or another payment processor like PayPal, Stripe, Adyen, etc. They keep your information safe and protect you from suspicious transactions.

Pay from your personal computer only

Never pay for anything with the help of public computers. It is not safe to use the one located in your college library or an Internet café. Thieves can easily install stalking software or hardware on them and get access to your data. As a rule, they act smartly, and you cannot notice that something is wrong with this or that computer.

Use your credit card

Credit cards were created specifically for online payments, so use them when you need any service or item from the Internet. Some online tools help students study better, and you can use a credit card to pay for a subscription or benefit from the best free plagiarism checker, which is safer. Credit card processing companies save your card from being misused. You are recommended to set a payment limit, and a thief won’t be able to extend it. So if you will accidentally become a victim of one, at least you won’t lose all of your cash.

What is more, there is a chance that you will recover the stolen money if you contact a credit card provider on time and explain the situation. On the contrary, debit cards are connected to the bank account directly, don’t have any payment limits, and are hard to recover. This makes them risky to use online.

Come up with a strong password

If you take a look at any credit card basics, the very first rule you will see there is: never use a password that is easy to guess. Any common passwords, including your name or date of birth, won’t do! To create a secure password, use both numeric characters and letters in your password and make sure that it is longer than six symbols.

There are several points to sum up. First, never purchase anything from the internet shops that looks suspicious. Second, avoid any offers that seem too good to be true. Third, choose large and reputable companies only, but never rely on them entirely when it comes to payment security. Install and update your antivirus program, check the website connection for safety, make your password impossible to guess, and use your own devices only.

If you believe that your card information has been stolen, hurry up to contact your bank. Whenever you make online purchases, be attentive! Happy shopping!

The post Processing Payments on the Web: 7 Things Students Should Consider appeared first on PaymentsJournal.

PSCU, the nation’s premier payments CUSO, today announced that Chartway Federal Credit Union (Virginia Beach, Va.) has joined the cooperative for credit and debit card processing and contact center services. With $2.2 billion in assets, Chartway FCU currently serves nearly 190,000 members.

Chartway FCU chose PSCU following a comprehensive review process. The credit union was seeking a partner that would strengthen the member experience and help deliver industry-leading solutions to its members.

“Delivering a desirable member experience is our No. 1 priority, and debit and credit offerings are a primary driver of experience and overall satisfaction for members,” said Melissa Cade, SVP of Member Solutions Services at Chartway FCU. “During the evaluation process, we carefully and strategically pursued partners who had a reputation for seamless card processing, a demonstrated commitment to product innovation and an unwavering focus on delivering a reliable member experience. PSCU had all three of these capabilities and a reputation in the credit union space for operational excellence. We are very excited about the partnership with PSCU and what lies ahead for Chartway members.”    

In February 2019, PSCU successfully transitioned Chartway FCU’s contact center services to the CUSO’s contact center services platform. The partnership has already helped Chartway FCU begin to revitalize its member services and accelerate the credit union’s efforts toward a more desirable and modernized member experience. As PSCU’s systems are fully integrated with many of the systems Chartway uses today, the CUSO has been able to assist more members from start to finish, as well as significantly reduce call-back requests and wait times within the first few months of service.

This fall, Chartway FCU and PSCU will begin the card processor conversion process. As part of the credit transition, Chartway will provide contactless credit cards to its members through its partnership with PSCU, making transactions faster and more convenient. Debit card conversion will follow, allowing Chartway FCU to provide members with improved service levels and advanced fraud monitoring systems to reduce losses with the help of PSCU.

“We are pleased to welcome Chartway FCU to the PSCU cooperative,” said Scott Wagner, EVP and Chief Revenue Officer at PSCU. “Our shared commitment of delivering an unparalleled member experience has made this partnership a natural fit. We look forward to working alongside Chartway FCU to provide its members with a more modern experience through PSCU’s comprehensive payments solutions and contact center support.”

The post PSCU Partners with Chartway Federal Credit Union to Provide Payment Processing and Contact Center Support appeared first on PaymentsJournal.

Cybercriminals always follow the money, and corporate finance is a potential honey pot for them, given the potential to divert payments to their own accounts. Last year, a WEX Worldwide survey found that 52% of organizations admitted to being victims of payments fraud. Today, many CFOs alongside CIOs are implementing payment hubs to protect corporate cash through better payment controls.   

While inefficient payment processes inhibit supply chains, cash flow and profitability, they also create a ripe opportunity for fraudsters. Payment hubs have emerged as the preferred solution of many treasury and finance leaders to combat fraud. Not only do payment hubs help fight against the increasing threat of fraudulent attacks and cybercrime, they have the potential to provide global visibility into payments to ensure consistency and compliance. Additionally, payment hubs can optimize cash and improve overall working capital.  

So why are CFOs, CIOs and CISOs demanding that payment hubs be implemented? Here are several benefits organizations gain from integrating a payments hub within their finance function: 

Standardization eliminates unauthorized payments

It is quite common for global organizations to have different payment procedures by country or business unit, even if a single ERP has been implemented globally. Yet internal and external fraudsters prey on inconsistency in the way payments are managed. Payment hubs support digitization of payment policies while enforcing payment controls (e.g., payment approval scenarios, extra layers of authentication, remote and absentee approval procedures, and restrictions on payment modifications). 

Screening for internal and external compliance 

As payments continue to diversify across multiple channels (e.g., wires, ACH, checks, real-time payments, non-bank channels), organizations cannot solely rely on finance and treasury staff to scan every payment in real-time or count on banks to be the last line of defense. Corporates can be fined for violating sanctions lists such as OFAC. At the same time, payment screening should also detect payment anomalies and payments that violate internal policies (e.g., those that that take place outside of an organization’s “approved” countries, payments to a recently modified bank account, or even an odd payment amount). Process automation through complex algorithms and/or machine learning in a payments hub offers increased protection.    

Payment hubs reduce the cost of managing payments

For CIOs who manage ERP implementations, the intricacies of ERP-to-bank connectivity, payment format transformation, executing payment controls, and delivering middleware to support manual payments is a complex exercise. This responsibility increases in difficulty as banks move to API connectivity while SWIFT mandates global transition to XML ISO20022 formats. Fortunately, payments hub technology manages every aspect of payments compliance and bank connectivity, enabling CIOs to manage a modern payments infrastructure at a fraction of the cost (typically saving $1 Million +). Payment hubs also allow CFOs to optimize banking services as they scale to meet the liquidity needs of a growing organization.   

Increased visibility to payment activity 

Although organizations continue to stockpile cash, boards are demanding that CFOs minimize cash used for working capital so that more liquidity can be directed to higher yield investments, strategic projects, and shareholder returns. Cash visibility is critical to meeting the CFO’s KPIs and payment hubs enable real-time visibility into all payment activity. Without these centralized views, corporate treasurers estimate end of day cash positions for their bosses, leaving idle cash in bank accounts yielding dismal returns, and robbing the CFO of the opportunity to maximize the return on cash. Management and the board demand visibility and only a payments hub can complete the picture. 

A centralized payments hub is a vital risk management tool to protect the organization’s cash flow by strengthening payment controls. Return on investment is quick while maximizing the value of ERP solutions to streamline connectivity and compliance for the CIO and CFO.  

The post As Fraudsters Target Corporate Cash, CIOs Demand Grows for Payment Hubs appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower left corner of your screen to receive notifications as soon as the episode publishes.

Data for this episode of Truth In Data is provided by Mercator Advisory Group’s report – Are You Prepared for Mastercard and Visa to Enter Your Market?

• HIGH RISK for processors: If Visa Next has implemented its own processing platform, then 3rd party processors are cut out
• Opportunity for processors: With robust card issuance business – plastic cards will be needed where participants lack a smartphone
• Opportunity to Acquirers: To enter into the issuing market to support merchants on the B2B and consumer-focused solutions
• Opportunity for Alternative Finance: Alt. finance will be difficult to implement for Visa Next, which makes an opportunity to existing vendors
• HIGH RISK for Fintechs: Any fintech with similar goals/tech as Visa Next’s API interface are in big trouble
• Fintechs that have solutions addressed by Visa Next (horizontal or vertical) can mitigate risk by moving immediately into partnership with Visa to gain temporary exclusivity

About this report

New business units launched by the two large networks will compete with banks, processors, and fintech suppliers.

The debut of Mastercard Vyze and Visa Next should cause banks, credit unions, alternative finance suppliers, payment platform providers, acquirers, and payment solution providers to carefully evaluate their options. This Viewpoint describes the new business models and analyzes the opportunities and risks these new business models represent to other market participants.

The post Visa Next Poses Risks & Opportunities for Processors, Acquirers & Fintechs: appeared first on PaymentsJournal.

An opinion piece in PaymentsSource takes aim at the payroll industry and suggests that it has not been adopting new digital capabilities quickly enough. The writer contends:

“… despite the significant advances in fintech every company’s most important asset, their employees, have faced decades-old processes when it comes to getting paid. Today’s modern worker, including the growing group of freelancers and 1099 employees, have not been provided payroll options that meet their unique and evolving needs.” 

Although I agree that more can always be done, I think the payroll industry has historically been fairly responsive to new technology. Particularly in consideration of a fairly complex and ever-changing regulatory environment.  Some advancements that come to mind:

• Payroll cards came on the scenes in the late 1990’s to offer those employees who did not have a formal banking relationship to receive payroll electronically.
• General Purpose Reloadable (GPR) cards that allowed payroll deposits followed suit.
• Posting required paystubs on-line became commonplace in the early 2000’s.
• Options to receive payroll or a portion of a person’s payroll before payday have been around for at least 10 years.
• In the last few years many GPR providers have offer options to receive payroll two days early to help close the gap for those really dependent on the timing of their payroll deposit.
• And now we are seeing the growth of options to pay individuals in the freelance or “gig” economy to receive pay by the job or daily is expanding.

The author of the opinion piece suggests:

Clearly the definition of a “typical” employee grows outdated each year. With today’s workforce unrecognizable to that of decades past, blanket and static payroll processes are no longer sufficient. The newfound variability in how and where individuals earn their income requires better, faster accessibility to wages.

Businesses must keep up with the times and address the needs of today’s modern workforce with tailored payroll solutions. Changing habits and preferences produce new financial needs that demand new options.

The traditional payroll function works harmoniously under the assumption employees use conventional banks to manage their finances. As consumer interest in technology-driven financial services and bank alternatives grows, payroll methods must also evolve to ensure all employees — even those outside the mainstream — are provided the necessary access to and control of their funds.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Are Payroll Processors Falling Behind in Adopting Digital Payments appeared first on PaymentsJournal.

May 20, 2019 – The U.S. Faster Payments Council (FPC) today released the results of its first member election for its Board of Directors. Newly designated representatives include the following individuals representing the FPC’s six membership segments:

*At-large member

“The new FPC Board represents the industry inclusiveness that is critical to the work of the organization,” says Kevin Christensen, acting FPC executive director and interim Board chairman. “Our job is to convene industry stakeholders to chart a path to ubiquitous faster payments, and these newly elected leaders will be instrumental in achieving that vision. The level of FPC member commitment is unparalleled, and with this passion comes action: We will achieve universal faster payments.”

As outlined in the FPC bylaws, the Board is comprised of up to 21 voting members representing the voting membership segments, and each voting segment is allocated three seats; seat allocations that are not filled are left vacant. In addition, three at-large seats exist for the three voting segments with the largest number of members, but no membership segment may have more than four seats. Within each segment, the composition of the directors reflects the diversity of their segments.

In this inaugural election, FPC members voted in a Board that benefits both from continuity and fresh perspectives: 65 percent of this new leadership draws on the experiences of the interim Board, while the other 35 percent represent new FPC directors. Board members will be serving staggered-length terms. Term lengths were determined by number of votes, with the longest terms assigned to those with the largest member support. In addition, Board officer positions were recommended by the Nominating Committee and will be confirmed at the first FPC Board Meeting on May 30.

“As we assemble this new group of industry leaders, we’d like to extend a special thank you to the interim Board,” remarks Christensen. “Without the tireless efforts of those individuals, we wouldn’t be where we are today: holding our first member meeting, unveiling new initiatives and spearheading progress toward ubiquitous faster payments. This group helped set the stage, and now, our newly elected Board will take us into the future.”

The FPC Board is accountable to the members for setting strategic direction and ensuring processes, activities and recommendations are consistent with the fundamental principles of the organization. In addition, the Board is responsible for ensuring the views of segments with fewer members are heard during deliberations at the Board, committee and work group levels.

The Board’s near-term objectives include formalizing the organization’s strategic direction and establishing foundational structure. With the help of the Executive Search Committee, one of the Board’s most immediate tasks will be to confirm the FPC’s first executive director. This announcement is expected by early summer 2019.

About the U.S. Faster Payments Council (FPC)

The FPC is a new industry-led membership organization whose mission is to facilitate a world class payment system where Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. By design, the FPC encourages a diverse range of perspectives and is open to all stakeholders in the U.S. payment system. Guided by principles of fairness, inclusiveness, flexibility and transparency, the FPC will use collaborative, problem-solving approaches to resolve the issues that are inhibiting broad faster payments adoption in this country. For more information, please visit FasterPaymentsCouncil.org.

The post U.S. Faster Payments Council (FPC) Announces First Elected Board of Directors appeared first on PaymentsJournal.

In a continuing string of B2B payments tech activities vis-à-vis collaborations, partnerships, etc, JPMorgan announced that they will have a ‘strategic collaboration’ with Bora Payments Systems to deliver virtual cards. The brief release in Cards International does not have a ton of detail nor any financial arrangements, but since we have some knowledge of Bora, the expectation is that JPMorgan will push into the buyer-initiated virtual card space to improve the supplier experience and gain further adoption of cards in payables.

‘Bora’s payment processing platform, called Payer Direct Hub (PDH),  will automate delivery of JP Morgan’s Single Use Accounts payments that are linked to virtual card transaction….The patented platform enables straight-through transaction processing and remittance posting of virtual card payments to suppliers.  Due to streamlining of the accounts receivables process, vendors will be able to accept virtual card payments from their corporate clients. Further, this platform will help slash down labour costs and boost cash flow….The bank’s clients will be able to speed up SUA programme growth due to increase in supplier adoption of virtual card payments.’

For readers who are familiar with virtual cards, the single-use account model has several versions. One version, supplier-initiated, requires the supplier to process a CNP transaction in order to get paid (or have a tech partner process on their behalf). This is the dominant model by which SUAs are currently processed, which is not optimal from the supplier perspective. We recently discussed this conundrum in a report titled Supplier Enablement: Get More Flexible and Technical, which advocates creating a more hospitable acceptance environment for suppliers if issuers wish to gain more than the current <2% share of B2B payables flows. The Bora system enables the promise of STP directly through to supplier receivables posting, not just half way. We expect that the recently announced Chase Merchant Services organizational combo with Treasury Services in the Corporate and Investment Bank will smooth this effort as well, since the acquirer part of the integration with Bora’s platform is easier to accomplish, removing a key source of adoption friction.

“Together, this powerful organization, which already includes our Trade Finance and Commercial Card business, will continue to develop our own worldwide payment capabilities, and partner with digital payment companies looking to expand in the U.S. and internationally.”

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post JPMorgan Chooses Bora’s Technology for Virtual Card Payments Processing appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower left corner of your screen to receive notifications as soon as the episode publishes.

Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – Payment Acceptance as Digital Channels Expand

• When small businesses switch payment processors it is just about the charges and fees
• When they switch they are also looking for:
  • Better reporting tools
  • Speedy set up
  • Superior customer service

About this report

Mercator Advisory Group’s most recent Insight Summary Report, Payment Acceptance as Digital Channels Expand, based on the company’s annual Small Business Payments and Banking Survey conducted in 2018, reveals that 46% of U.S. small businesses that accept payment cards consider acquiring or merchant banks as their primary payment processing provider compared to 42% who consider any other third-party supplier (excluding Square or PayPal) to be a primary provider. Acquiring banks collectively are a clear leader compared to the next most common types of primary provider—a point-of-sale terminal provider (considered primary by 16% of respondents) and card processor such as First Data or Vantiv, now WorldPay (considered primary by 12%). But when the responses are aggregated, more card-accepting small businesses surveyed consider any type of third-party card processing provider (54%) to be primary than consider an acquiring/merchant bank to be their primary payment processing provider (42%), and more say so than last year.

The survey findings show that 1 in 5 small businesses that accept payment cards switched primary card processing providers within the previous two years. Lower cost was the primary reason for the switch, but better reporting, ease and speed of setup, and better service are the next most common reasons for those who switched providers.
Many third-party providers offer smaller merchants ancillary services they need aside from core processing services and many businesses are migrating to third-party providers for online and mobile services, often designed for their business verticals.

Payment Acceptance as Digital Channels Expand is the first of three reports summarizing the results of the 2018 Small Business Payments and Banking Survey, the third annual survey of small businesses fielded by Mercator Advisory Group. This was a web-based survey of 2,047 U.S. small businesses (between $500,000 and $10 million annual sales) regarding their use of payments and banking services.

The survey contained questions on current business sentiment, payment acceptance services, business-to-business (B2B) payments, and banking depository and loan services. Forthcoming companion reports summarize the survey’s findings on business-to-business payments and business banking services.

The post Why Do Small Business Change Payment Processors? appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower left corner of your screen to receive notifications as soon as the episode publishes.

Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – Payment Acceptance as Digital Channels Expand

• When it comes to small business and payments the age of the company owner often dictates the types of payments accepted
• In fact, 18-24 year old business owners are more likely to accept a broader range of payment methods than their older counterparts
• They are also more likely to accept mobile wallets.
• Further, they are more likely to have switched payment providers in the last 12 months
• These facts are true for younger companies and, to a lesser degree

About this report

Mercator Advisory Group’s most recent Insight Summary Report, Payment Acceptance as Digital Channels Expand, based on the company’s annual Small Business Payments and Banking Survey conducted in 2018, reveals that 46% of U.S. small businesses that accept payment cards consider acquiring or merchant banks as their primary payment processing provider compared to 42% who consider any other third-party supplier (excluding Square or PayPal) to be a primary provider. Acquiring banks collectively are a clear leader compared to the next most common types of primary provider—a point-of-sale terminal provider (considered primary by 16% of respondents) and card processor such as First Data or Vantiv, now WorldPay (considered primary by 12%). But when the responses are aggregated, more card-accepting small businesses surveyed consider any type of third-party card processing provider (54%) to be primary than consider an acquiring/merchant bank to be their primary payment processing provider (42%), and more say so than last year.

The survey findings show that 1 in 5 small businesses that accept payment cards switched primary card processing providers within the previous two years. Lower cost was the primary reason for the switch, but better reporting, ease and speed of setup, and better service are the next most common reasons for those who switched providers.
Many third-party providers offer smaller merchants ancillary services they need aside from core processing services and many businesses are migrating to third-party providers for online and mobile services, often designed for their business verticals.

Payment Acceptance as Digital Channels Expand is the first of three reports summarizing the results of the 2018 Small Business Payments and Banking Survey, the third annual survey of small businesses fielded by Mercator Advisory Group. This was a web-based survey of 2,047 U.S. small businesses (between $500,000 and $10 million annual sales) regarding their use of payments and banking services.

The survey contained questions on current business sentiment, payment acceptance services, business-to-business (B2B) payments, and banking depository and loan services. Forthcoming companion reports summarize the survey’s findings on business-to-business payments and business banking services.

The post What Does the Age of the Business Owner Say about the Payments They Accept? appeared first on PaymentsJournal.

Mastercard and Visa both have proposed to lower interchange in the European Region when a card that was

issued outside the EU is used to purchase something with a merchant operating within the EU.  These interregional interchange fees will drop by at least 40%, with the European Commission to determine the final rates based upon feedback to the current proposal.   The proposed drop will have bring these interregional fees more in-line with internal EU rates. This significant drop will noticeably impact revenues for the networks.  Mastercard in an SEC filing noted that they will take a $650 Million USD charge in 4^th quarter due to this issue.  The belief, however, is that this is the prudent move and will prevent a wave of litigation from the Commission and merchants.  More on this topic from the Wall Street Journal:

Credit-card companies have been locked in disagreements over fees charged to merchants with officials in the U.S. and Europe for years.

The European Commission raised concerns about Mastercard’s interchange fee practices for cross-border transactions in 2007 and it released a statement in 2009 objecting to Visa’s interchange fee practices. 

More than 400 U.K. merchants also ultimately have sued Visa since 2013 seeking damages for certain interchange fees, Visa said in its annual filing. As of Sept. 30, Visa said it had reached settlements with more than 75 of those merchants. 

In the U.S., Visa and Mastercard were part of a group of firms that agreed to a $6.2 billion settlement with merchants related to card fees.

Under the proposals, interregional interchange fees would be capped at 0.2% of the transaction value for debit cards and 0.3% for credit cards when carried out in person. Fees for online purchases would be capped at 1.15% for debit cards and 1.5% for credit cards. 

Transactions where a card isn’t present — or purchases made online — usually have higher rates because they can be riskier and are more complicated, a Visa spokeswoman said.

The European Commission plans to test these proposals in the market before they become permanent, and the new rates would go into effect six months after that decision is made. The commitments would be effective for 5 1/2 years.

If interested, Mercator Advisory Group recently published a report regarding global interchange that can be found here.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

The post Interchange Fees Drop in the EU appeared first on PaymentsJournal.

Hopefully, the Bank of China is working payment network applications alphabetically.  American Express received approval to process payments in yuans.  Mastercard and Visa still wait.  Discover enjoys a bilateral acceptance agreement with Union Pay.

CNN reports:

• American Express just became the first US credit card company to get the green light to start building its own payments network in China.
• The company said Friday that the Chinese central bank has given it preliminary approval to handle payments in yuan. AmEx (AXP) can now start setting up the payments network through a joint venture with LianLian Group, its Chinese partner.
• In every other market around the world, AmEx processes transactions through its own network, whose hub is in Phoenix, Arizona. But in China, they have been handled by state-controlled payments giant China UnionPay.
• Once AmEx has built its own network in China, it will be able to use it to process payments on AmEx branded cards and collect fees on far more transactions.

Forced relationships are one thing, full licensing is another.  With 9 billion cards outstanding, this is a payment networks nirvana.

• In China, AmEx, Mastercard (MA) and Visa (V) can only issue co-branded cards, typically in partnership with UnionPay. The cards use UnionPay’s network for yuan payments in China, and the US companies’ networks for payments abroad in dollars or other foreign currencies.
• AmEx now has a shot at taking some of UnionPay’s business inside China.

From American Express to Express, Seeking Alpha reports.

• The U.S. credit-card company formed a joint venture, Express (Hangzhou) Technology Services Co. with Chinese fintech services company LianLian to build a network business that will enable charges on American Express branded cards to be cleared and settled domestically by its joint venture.

And, WSJ points out that Mastercard and Visa still await approval as years of footdragging

• Once running, the AmEx network will join a market with nearly 7 billion bank cards in circulation, with government-owned China Union Pay Co. commanding more than 90% of the market. Mastercard ’s application for a similar joint-venture is pending, as is Visa Inc.’s to form a wholly owned entity in China.
• Approval of the AmEx deal was timed to get out ahead of that summit, a Beijing official said. He called it a “goodwill gesture.” In its announcement, the People’s Bank of China said the permission represents “an important step” toward liberalizing China’s clearing industry.
• Beijing and Washington are looking to the meeting between presidents Xi Jinping and Donald Trump at the end of the month to ease a trade conflict that has battered global businesses and investors as well as damaged the bilateral relationship.

With 9 billion cards outstanding, this is a payment networks nirvana.

For more detail on the China card market, see this Mercator Advisory Group report.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

The post The Orient Express: American Express bags Approval For Chinese Payment Network appeared first on PaymentsJournal.

First, please give us a little background about your career as a woman and a person of color in a high-profile leadership role in the financial services industry?

My career journey has given me a strong grounding in payments and technology and the opportunity to experience financial services from many perspectives. Building on my educational background in business and engineering, I gained experience across a range of business, technology and industry sectors before becoming a partner with Bain and Company. I later held a variety of leadership roles with Dell Inc. and American Express. Most recently, I served as CEO of Worldpay’s U.S. business before joining Fiserv earlier this year.

Attaining success is a tricky journey for anyone, regardless of background, requiring persistence and excellence. Various unconscious and conscious biases can be at play for women, people of color, or frankly, anyone. It is time — in business and in technology — to move beyond all kinds of bias and pursue critical opportunities rapidly with the best people.

The focus must be on understanding what’s important for the customer and consistently being the absolute best at delivering on these expectations in order to win in the marketplace.

When you put people – customers and team members — at the center, you tend to bring together the best talent to create the best ideas and enduring relationships. That has been my guiding objective throughout my career.

I joined Fiserv in April in time for Forum, our annual client conference, in Las Vegas. One of the largest sessions of the event was our inaugural Leading Women Summit, intended to accelerate the conversation about attracting, engaging, developing and inspiring people at all levels to become effective leaders. I look forward to remaining a part of this important dialog.

Why did you decide to join Fiserv? 

Many things attracted me to Fiserv, with clients and opportunity at the top of the list. First and foremost are our clients. Those of us in financial services know the importance of the industry in people’s lives. Financial services help people achieve their dreams, save money and buy homes. I am honored to provide technology and solutions to the financial institutions that help people manage their financial lives more easily and securely.

Second, is the huge potential of Fiserv. Financial services, deposits, lending and payments are advancing at the speed of life. And our products and solutions must keep pace with rapidly changing consumer expectations. Fiserv has a strong organic technology base and we will continue to acquire relevant technologies. This is demonstrated by our recently announced agreement to acquire the debit and ATM processing business of Elan Financial Services, which will further extend our scale and client value proposition. It’s a company like Fiserv, with dedicated associates, exceptional partners and clients, and innovative technology that can move in step with the way people live and work today. I am hugely excited to be a part of that.

Can you tell us a little more about what Fiserv is and does?

Money is very personal and emotional. And when it comes to moving and managing money, people prioritize accuracy and security. For more than three decades, Fiserv has been a trusted provider of technology solutions to help financial institutions and companies serve their customers.

Fiserv empowers more than 12,000 banks, credit unions, thrifts, billers, mortgage lenders, brokerage and investment firms, and other businesses to create financial experiences that enhance the way people live and work today.

We process more than 30 billion digital payment transactions and move more than $75 trillion annually. A global organization with more than 24,000 associates, Fiserv has been named among the FORTUNE Magazine World’s Most Admired Companies^® for five consecutive years, recognized for the strength of our business model and innovation leadership.

Fiserv is transforming financial services leveraging our unique strengths – our scale, our expertise and our ability to serve as a connection point for myriad capabilities for our clients and consumers.

Informed by the way people live and work today and inspired by the way they will live and work tomorrow, Fiserv is uniquely positioned to provide winning innovation in the fintech arena that moves in step with people’s lives.

What are you primarily focused on in your role as President of Cards Services?

The Card Services business at Fiserv continues to seamlessly and securely create and grow networks through innovation to enable people to access and manage money any way they choose. Fiserv capabilities authorize and settle point-of-sale and ATM transactions, monitor and drive ATMs, provide nationwide switching of debit, credit, prepaid and ATM transactions, and we operate the Accel® Network. Our proven solutions enable clients to maximize profit, reduce costs, and mitigate risk.

Each day, thousands of our clients process more than 1 billion debit, credit and ATM transactions, manage 28,000 ATMs and our debit network is accessible at 3.6 million point-of-sale locations and 535,000 ATMs.

Financial institutions play an important role in our financial lives. People trust them to hold their assets, and we are a trusted financial institution partner in moving these assets for consumers. To do that well amidst new competitive entrants, advancing technology and changing consumer purchase behavior, we must continually innovate and develop breakthrough products.

Our quarterly consumer research studies and ongoing surveys allow us to gain insights into people’s preferences, enabling us to shape the solutions that matter most. For example, consumers increasingly want transaction alerts with credit or debit cards both as a security safeguard and to conveniently manage spending. Our CardValet solution lets consumers set preferences and alerts to monitor account activity and quickly detect and act to prevent fraud.

We also see strong market demand for cardless ATM withdrawals, particularly for use in an emergency (e.g., a forgotten wallet), to prevent fraudsters from accessing a PIN, or for times it’s inconvenient to carry a debit card. CardFree Cash from Fiserv provides accountholders convenient, easy access to cash at thousands of ATMs nationwide with no card required.

Our history, size, and trusted client relationships allow us to help financial institutions serve consumers in secure, modern and convenient ways. Throughout my career, I have experienced financial services through the lens of the consumer, financial institution, and merchant and acquirer. I am honored to play a role in providing technology that empowers financial institutions to help people improve their financial lives.

The post Q and A With Kim Crawford Goodman, President, Card Services, Fiserv appeared first on PaymentsJournal.

There are billions of dollars at stake. An estimated $150 billion is spent on illegal sports gambling in the US per year. Following the Supreme Court verdict legalizing sports gambling last May, that money stands to funnel into the now-legal betting system.

Since the Supreme Court decision, Worldpay has prioritized educating banks on relevant policy changes, the risks surrounding debit and credit card transactions and other alternative payment methods, as well as other challenges financial institutions can expect as individual states move to legalize sports betting.

Despite the potential risks that banks and card schemes need to be aware of, the most important takeaway is that legalized gambling now makes for a safer and more secure transactional environment because the parties involved move out of anonymity.

Having worked with legal gambling throughout Europe and in Las Vegas, Worldpay is well positioned to bring that expertise and offer ways to process payments for legalized sports gambling as states pass legislation.

Worldpay recently partnered with DraftKings, a leading provider of daily and weekly fantasy games, In the launch of a mobile betting platform in New Jersey – the first state to legalize sports gambling outside of Nevada in 25 years.

As other states follow suit—Pennsylvania, West Virginia, and Mississippi are all close behind—there is enormous potential to make significant economic gain through increased tax revenues while appeasing their sports-loving residents. There is also a potential for gaming companies like DraftKings, as well as land-based casinos, to engage with players in new and responsible ways.

Just a few months ago, when the Supreme Court decision was made, the news sparked waves among sports fans all over the United States. Now that the 2018 NFL season has officially kicked off, fans across the country are itching to legally bet, like those in New Jersey can.

To better understand how Americans feel about the recent Supreme Court verdict, Worldpay conducted a survey around consumers’ feelings toward legal sports betting and their likelihood to participate in legal betting if it were available to them.

The results show overall excitement for the legalization of sports betting with minor concerns.

Respondents were most excited about placing bets on the NFL, and their anticipation is palpable: 30 percent of those surveyed would engage in sports gambling if their state legalized it.

That excitement is, however, tempered with concern about the financial security of a gambling transaction as 70 percent of those surveyed agree that payment fraud is a broad concern with sports gambling.

Considering the novelty of legal sports betting and recent examples of high-profile financial fraud, this isn’t entirely surprising. Part of Worldpay’s work to educate more broadly on the payments aspect of sports gambling is to provide clarity around the safety of each transaction.

Our top priority is protecting the players and the integrity of each transaction. The new legal sports gambling framework brings accountability to the forefront, removing the need for anonymous cash payments and enabling a transparent record of transactions over time.

The post Worldpay and Draftkings Kick off Legalized Sports Gambling appeared first on PaymentsJournal.