Kevin Emery, Head of Business Development for Acquirer, shared some of his thoughts with me on the cards and payments industry.
Here is what he had to say!
1. What is the most exciting development in payments affecting your business?
The evolution of chip enabled payment cards as a global standard. This is increasing the scale of opportunities available to card issuers to create innovative offerings to their cardholders. With EMV becoming the standard in the US, the last bastion of magstripe cards is now being converted and this is going to focus US payments firms on opportunities for smarter multi-application payments products. In addition, non-payment applications such as loyalty provide a significant opportunity for issuers, acquirers, and merchants to create more compelling revenue-generating propositions. The advent of chip also complements the rise of the mobile channel, with exciting new opportunities in customer convenience including the harnessing of geo-fencing technology. The rise of more payment types and a broader range of payment products means the backbone payments infrastructureÂ needs to adapt to cope. This means issuers and acquirers, who are operating on tiring legacy systems, are considering migrating to more dynamic payment switching environments. In turn this is going to create the benefit of better payments services for the consumer. All these changes are increasing the emphasis on better testing to deliver successful EMV and switch migrations, to ensure on-going compliance, and to get better quality products to market faster ahead of the competition. And that’s where we come in.
2.Â Â Do you think there is a disconnect between the payments industry and the clients they work with?
There can be a disconnect. It’s a truism to say payments industry needs to fully understand our clients’ (the banks) businesses and their end customer needs, and to match our solutions to meeting these needs. We need to be focused outwardly on what we need to do to solve problems for the market, and not inwardly focused on just iteratively improving our offerings. Vendors need to understand that banks aren’t starting from a blank sheet. The problem the banks face is identifying how to strengthen the connection with their customers within the constraints of their legacy infrastructure.Â We need to recognize the demands of how growing consumer demand is affecting their legacy systems, and find ways to help them to get better products to market faster.
3. What changes do you see as necessary to make contactless payments a nationally adopted system?
There is so much work being done to make contactless technology ubiquitous. The EMV dual interface specification is gaining acceptance and huge investment is being put into contactless tags for mobile phones, SIM-based NFC, and so on. Clearly standardization is critical. However, to really get contactless adopted, industry and adopters of contactless need to think about contactless as a business proposition and not just a technical standard.
The question that needs to be answered is with so many waysÂ to make a payment, what extra value does another payment method such as contactless give to the consumer? For example, is reducing the transaction time by several seconds a sufficiently compelling proposition? Where and how often will the average consumer benefit from this proposition? Industry needs to articulate reasons that are compelling to consumers and which bring clear benefits they can understand. In fact,Â the value points for all participants in the payment chain need to be identified and packaged into compelling propositions that support sustainable business advantages and produce a clear return on investment.
It is likely that true value of contactless lies beyond the convenience factor. Payment and loyalty propositions, of which contactlessÂ is an enabling component, are likely to be more compelling to consumers and merchants.Â For example, a national transport proposition can bring benefits to both operators and consumers. Operators gain from increasing passenger throughput and reducing costs of ticket distribution and the cost of cash management. The consumer experiences a reduction in the cost of travel for using the contactless cards and eliminates queuing at the ticket office. In this example, convenience is clearly part of the proposition but a broader and more sustainable business case can be built.Â Other propositions in contactless can be bult around loyalty and reward schemes, using contactless and geo-fencing to improve the customer experience. This can help to keep the provider front-of-wallet. Collectively, the development of a range of strong and compelling business propositions will drive a national adoption.
Kevin will be presenting on EMV migration at Cards & Payments USA.
To learn more about Kevin and the cards and payments industry, click here.