The European and indeed global payments market is about to become a lot more complex in the wake of incoming PSD2 regulation at the beginning of 2018. So how will all the players evolve?
Amid further proliferation, is there room for everyone and to what extent will the new opportunities for PSPs take business from existing acquirers and processors?
These heretofore unanswered questions are becoming ever more pertinent but panellists at Merchant Payments Ecosystem in Berlin delivered incisive and candid commentary on how they see their roles taking shape. Not having been briefed, it must be added.
PSD2 regulation essentially could make redundant the traditional role of acquirer as a merchant will be able to request a customer payment directly from the customer’s bank.
Diane E. Offereins, executive vice president, Payment Services, Discover Global Network, said, “In five years, these guys won’t be called acquirers, but merchant servicers.”
Ron Kalifa, vice chairman, Worldpay said, “There are three main things we provide to merchants- increase sales, reduce cost and reduce fraud.
“Acquiring is moving in a different way and is no longer a four party system. Our role going forward will be to manage complexity for merchants, especially the small to mid-size merchants who manually write down their takings each day. We can continue to serve merchants best by implementing tight security to reduce fraud and failed transactions, and by routing things so as to achieve a lower cost of processing for merchants.
"Also, new models such as chargebacks will emerge on the back of PSD2.”
It comes down to technology; managing data is the way to serve the industry merchants best and it lies with the big players who have scale and capital to develop the right technology.
Michael Steinbach, CEO, equensWorldline SE said, “Acquiring will change, yes, and processing will become a huge commodity. Acquirers need to offer merchants data services. On the processing side it is very much about scale; on the acquiring side it is also about scale but very much about speed as well- time to market is king- merchants need to be onboarded in a matter of weeks, not months.”
Initial proliferation will eventually settle down and the question won’t be so much is there room for everybody but whether the big players can step up to the challenge of their new role. It will indeed be all about scale. For the likes of Worldpay, however, whose network alone includes 146 countries, 126 transaction currencies and 326 alternative payment methods, the future looks bright. I won’t say orange per se, but definitely bright.