Now in its 11th year, the Merchant Payments Ecosystem event in Berlin in February brings together players from across the length and breadth of the payments value chain for a three-day conference, exhibition and networking opportunity – writes Helen Owen, PCM Contributor
THE RE-SHAPE OF THINGS TO COME
This year will undoubtedly be a turbulent one for the payments industry as evolution turns to revolution with the advent of (even more) new regulation and advances in technology. Naturally, the MPE conference content was littered with discussion around the likely change, with PSD2 highlighted as the most disruptive force to hit the industry.
Presenters and panel participants from major players in the acquiring space debated the future of the industry in a post-PSD2 world. They agreed that pure acquiring will likely become a thing of the past. They also believed that market consolidation will continue as acquirers, processors and new market players, (such as the seemingly all-powerful GAFA) continue to both build and buy their way
Andrea Dunlop, CEO, card and acquiring solutions, Paysafe Group, suggested that “some banks are doing the bare minimum to meet PSD2 requirements and others are treating it as a business opportunity – opening themselves up to partner with FinTechs for mutual benefit. The latter will thrive. The former may die. It’s up to acquirers to add value for their merchants.”
As acquirers become broader payment service providers. As merchants become direct payment enablers. As FinTechs become banks. And as the market consolidates and collaborates under the weight of PSD2, traditional roles will be abandoned. The consensus was that we may need to rethink the labels we apply to operators in the payments ecosystem to reflect this new era.
THE ROAD TO INNOVATION
A changeable industry with a flood of new entrants necessitates differentiation. Many of the presenters at MPE acknowledged how critical innovation has become to survival in the new ecosystem hierarchy.
However, there was an important call to action from some session leaders for payments companies to carefully consider the path they take in developing new products and services. Marijke Koninckx, product marketing manager, BPC Banking Technologies, warned that “Open Banking presents lots of great opportunities. But if you’re not addressing a real issue or solving a real problem, you won’t succeed in the payments space.”
This outlook was reflected in the product presentations, exhibition area and at the Innovation Competition, where the solutions gaining the most interest addressed payment pain points for the merchant, the consumer or both.
Throughout the conference, it was clear that the biggest ongoing payments challenge for merchants was to balance a fast, frictionless customer experience with cost control. Innovations proposed to address this over-arching need included those that used AI and sophisticated data for increasing accuracy in fraud detection. There were those that leveraged the value of data analytics in increasing transparency around chargebacks. And those employing alternative payments and SmartPOS to create faster, more convenient checkout options.
KEEPING THE CUSTOMER FRONT AND CENTRE
Vaidas Adomauskas, co-founder of Worapay succinctly expressed one of the best supported sentiments of the event: “We need to stop talking about payments. We should be talking about and focused on customer experience rather than on innovating payments. Innovation in payments needs to be driven purely by customer experience.”
Iddo De Jong, senior expert at the European Central Bank, elaborated with an example. “Immediacy is becoming is expected by consumers – and instant payments, mobile and contactless, will soon all become the new normal. Merchants need to voice what they need to support the end user and the payments industry needs to listen and respond by designing the right solutions.”
While anticipating and responding to customer demand is undoubtedly the right path, this approach will create huge challenges for the industry over the next few years. As FinTech expert Ghela Boskovich summarised: “Every person here has a different crystal ball for looking at future of payments. We can all see different possibilities and none of us can know with certainty which it will be.”
This uncertainty is one of the many reasons that this year’s MPE event attracted a record number of sponsors, topics and attendees, with over 900 delegates keen to get a glimpse of the road ahead for merchant payments.