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Innovations in Payments
Geoffrey Barraclough
EVO Payments International
15 September 2016
1
About EVO
• One of world’s largest merchant acquirers
– $100b payments processed each year
– 600.000 merchant locations
• ...
Why are Payments Important
3
Annual cost of Interchange to
UK retailers - BRC
Payments CostsThe Peak-End Rule
£1b
Mobile M...
Shopper journeys getting longer and more complex
4
Marketing Visit Shop
Make
Purchase
After Sale
Service
Leading to more complex shopper journeys
5
Marketing Visit Shop
Make
Purchase
After Sale
Service
Download
App
Visit
Websit...
Each retail sector is changing at its own pace
6
White goods
Researched
purchase
Habitual
purchase
Impulse
purchase
Fashio...
8
Payments and shopping…
…is best
understood
through
behavioural
economics
Reflex Pay
How easy is it to break into long
standing payment habits?
Speed is relative
Shoppers and the payment industry
...
Retailers
Payment
industry
Successful payment innovation requires the
needs of all stakeholders to be aligned
Speed
Simpli...
Get me in/Out quick
Kiosks and self-service | Contactless
Retail asTheatre
Mobile point of sale | Visual merchandising
But...
Four main questions…
How do I make it easier to
take money on a mobile
phone - website or app?
12
How can I help my
custom...
Contactless - a rare, popular payment innovation
13
18% of all POS
purchases
Up 200% y-o-y
ATV = £8.60
£0
£200
£400
£600
£...
Customer experience innovation
14
Making mobile payment easier.
It’s buttons underpinned with the -Pays.
15
Improving Plastic Improving payments Removing Pa...
The Pays are a valuable underpinning technology
layer but retailers need to build the CX
16
In-store Online
What of the CX?
Is it (finally) time for app payments in-store?
17
Retailer Apps Bank AppsMulti-retailer apps
Ability to p...
If we’re trying to reduce friction, what
future for the terminal?
18
SmartPOS bundle Single unit with appstore
If we’re trying to reduce friction,
what future for 3DS?
• Annoying shoppers and retailers since 2002
• Schemes working on...
Future of payments is that you
won’t notice payments
20
Payments ceases to be a separate business process
EU MIF has been a qualified success
Credit/debit fees have reduced across EU
but watch out for:
• Your acquirer not passin...
Will you block this card?
22
Brexit questions
23
Does MIF
still apply?
Will my suppliers
need different
licenses?
Where is my data?
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Innovations in Payments

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Keynote presentation to Retail Week's Innovation in Payments Conference, London, September 2016.

Covers: Research on consumer attitudes to payments, main problems confronting multi-channel retail today, my views on likely success of Apple and Android Pay.

Published in: Technology
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Innovations in Payments

  1. 1. Innovations in Payments Geoffrey Barraclough EVO Payments International 15 September 2016 1
  2. 2. About EVO • One of world’s largest merchant acquirers – $100b payments processed each year – 600.000 merchant locations • Domestic operations in USA, Mexico, Ireland, Poland, Spain, Germany and Czechia • Cross-border customers include C&A, Opodo • Setting up in the UK, closely aligned with retail POS/ecom developers • Easy integration methodology 2
  3. 3. Why are Payments Important 3 Annual cost of Interchange to UK retailers - BRC Payments CostsThe Peak-End Rule £1b Mobile Matters Q4 2015 conversion rates - Monetate 0% 1% 2% 3% 4% 5% 6% Desktop Tablet Mobile
  4. 4. Shopper journeys getting longer and more complex 4 Marketing Visit Shop Make Purchase After Sale Service
  5. 5. Leading to more complex shopper journeys 5 Marketing Visit Shop Make Purchase After Sale Service Download App Visit Website Visit Shopping Mall Customise Product Respond to Marketing Geo Message Sent to Mobile Research Product Search Reccomendations Read Reviews iBeacon Message Share on Facebook Loyalty Points Post Review
  6. 6. Each retail sector is changing at its own pace 6 White goods Researched purchase Habitual purchase Impulse purchase Fashion Grocery Fast food Petrol Rapid transit Indicative graph only
  7. 7. 8 Payments and shopping… …is best understood through behavioural economics
  8. 8. Reflex Pay How easy is it to break into long standing payment habits? Speed is relative Shoppers and the payment industry have different concepts of time Shoppers are easily discouraged The first transaction has to be good Confirmation Needs to be clear and consistent There’s a strong pessimism bias with smartphone payments Apple Pay may overcome this Our research showed… 9 …five behavioural factors determining the speed of adoption of new ways of paying
  9. 9. Retailers Payment industry Successful payment innovation requires the needs of all stakeholders to be aligned Speed Simplicity Strategic alignment Cost It’s a complex business… 10 Shoppers How well did these do? …with multiple stakeholders. All need to be satisfied…
  10. 10. Get me in/Out quick Kiosks and self-service | Contactless Retail asTheatre Mobile point of sale | Visual merchandising But forms part of the future of retail 11 …retailers are focused on transformation programmes delivering a much broader and enriched Omni-channel customer experience.
  11. 11. Four main questions… How do I make it easier to take money on a mobile phone - website or app? 12 How can I help my customers use their phone to purchase in my stores? How can I join up digital and store channels to serve customers better? How can I use digital to grow sales outside my home market? …retailers need to answer …and how do I do this securely?
  12. 12. Contactless - a rare, popular payment innovation 13 18% of all POS purchases Up 200% y-o-y ATV = £8.60 £0 £200 £400 £600 £800 £1,000 £1,200 £1,400 £1,600 £1,800 £2,000 Value of contactless transactions. UK £m Source: Payments UK
  13. 13. Customer experience innovation 14
  14. 14. Making mobile payment easier. It’s buttons underpinned with the -Pays. 15 Improving Plastic Improving payments Removing Payments
  15. 15. The Pays are a valuable underpinning technology layer but retailers need to build the CX 16 In-store Online
  16. 16. What of the CX? Is it (finally) time for app payments in-store? 17 Retailer Apps Bank AppsMulti-retailer apps Ability to pay on your mobile is not enough to get consumers to use mobile payments. Need to create a great customer experience.
  17. 17. If we’re trying to reduce friction, what future for the terminal? 18 SmartPOS bundle Single unit with appstore
  18. 18. If we’re trying to reduce friction, what future for 3DS? • Annoying shoppers and retailers since 2002 • Schemes working on 3DS 2.0 linked to PSD2 • Likely to feature two factor authentication – one time passcode – Biometrics – social graph verification 19
  19. 19. Future of payments is that you won’t notice payments 20 Payments ceases to be a separate business process
  20. 20. EU MIF has been a qualified success Credit/debit fees have reduced across EU but watch out for: • Your acquirer not passing on the reductions • Schemes introducing new fees • Shoppers switching to Amex • Shoppers switch to corporate cards 21
  21. 21. Will you block this card? 22
  22. 22. Brexit questions 23 Does MIF still apply? Will my suppliers need different licenses? Where is my data?

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