A report produced by Finextra Research In association with Ingenico January 2024 Payments: The key to unlocking new ecosystems and why merchant services are on the up

How banks and acquirers have adapted to the digital frontier 02. Sharply-focused customer-centricity is more palpable than ever 03. Data-driven business services 04. The Point-of-Sale is the ultimate channel for digital success 05. On POS-enabled cost savings, on security, and on compliance 06. Long term vision, what will be the key tenets of the payments ecosystem in five or 10 years’ time?

01. How banks and acquirers have adapted to the digital frontier To say things have changed in payments, and, as a result, the merchants services space is to understate a dramatic and fast-moving digital and cultural evolution that has driven such change. Digital transformation strategies now need to be framed around this rapidly paced market involving multiple payment methods, and hence, ever smarter payment devices, or Point of Sale (POS) machines. Cloud infrastructure is the order of the day to deliver on the breadth and scope of plans. Integration is a key part of the overall picture as well...

The change was catalysed by POS devices, he continues. “They went from that type of slingshot to the machine, to swiping, to tap, and now to soft POS. So you’re seeing an extraordinary change.” Other drivers, he adds, particularly in emerging markets such as the Middle East and Africa, include the banishment of cash from the system, to get a better grip on tax and fraud and understand where growth is coming from. Antonio Macías, Director of Acquisitions, BBVA, Spain is committed to upholding BBVA’s pioneering ethos regarding innovation in the serving of the SME community through digital solutions....

“This all flipped in the course of five or six years. In many cases, local methods of payment like UPI in India have far higher usage rates than Mastercard and Visa. And they were legacy players in that country. You’re seeing an extraordinary change.” Philip Glickman, formerly Managing Director, Merchant Services Asia Pacific at J.P. Morgan Cloud technology is really the only means by which acquirers and banks can pivot, respond, develop and basically move fast to compete and retain relevance and customer base in a constantly changing and evolving payments world. Lewis Sun, Head of Domestic &...

02. Sharply-focused customer centricity is more palpable than ever Of course to a large extent, a digital transformation strategy is rooted in the customer experience strategy, as one must follow the other. And through the customer focus lens, great attention must be paid to new and emerging customers and trends. Marc Pettican, Head of Barclaycard Payments, echoes this. “Our digital transformation strategy revolves around strengthening the entire customer experience, starting with enhancing onboarding so we can help businesses get up and running, and grow quickly. We’ve also invested in our digital...

Digital-first firms such Stripe and Square, really set the pace for the rest of the industry, in terms of simplicity, ease of integration and ease of buying, he explains. “But our actual strategy around the customer experience is to be able to interact how they want, when they want, to fire on all cylinders at all times, which means investing in digital tools to [cover] the whole cycle. Sometimes they want to send us text messages. Other times they want a live person to handle their issues.” This paints a strong picture of the merchant services landscape. It is very much a merchant’s market;...

03. Data-driven business services Says Pettican, “We process a significant amount of data ourselves – we offer a service which gives actionable insights from transaction data such as decline patterns. Across our issuing and acquiring businesses we see nearly half of the [UK]’s credit and debit card transactions, which provides us with in-depth insight into UK consumer spending and the performance of the economy, [to] help [customers] drive scale and improve performance.” Business insights based on large and increasing amounts of data can be generated quite easily and this is where merchant services...

“Our strategy around the customer experience is to be able to interact how they want, when they want, to fire on all cylinders at all times, which means investing in digital tools to [cover] the whole cycle. Sometimes they want to send us text messages. Other times they want a live person to handle their issues.” Lewis Sun, Head of Domestic & Emerging Payments for Global Payments Solutions, HSBC “We don’t sell data, but we do use it as a tool that we deploy to improve the consumer or the merchant experiences. Managing their commerce systems, we can give them information on whether the amount...

04. The Point-of-Sale is the ultimate channel for digital success As outlined, the diminutive and unassuming POS machine has come a long way since its inception in the 1970s. These days, in rapidly expanding ecommerce and merchant ecosystems, it is both a physical and virtual connector and catalyst for not only new business but also new business services, and a gateway to an elevated service proposition for merchants the world over. Says Macías, “Technology is creating a full-blown revolution in payment methods that facilitate payments for businesses. New ways to process payments that turn a...

“This means we can offer merchants our own software, or an end-toend commerce management software. It’s about being able to put all of these different applications on to a smart device, which is no longer just a standalone terminal but a broader integrated e-POS offering with a huge scope of services.” Scott Frisby, Head of Strategy, Elavon All the contributors have nodded to the ubiquity and open source capability of Android devices and operating systems as being the vehicle for rapid advancement in services, albeit Apple and iOS remain competitively significant and equally front and centre...