ROI Payments will provide a comprehensive overview of the players in today’s payment landscape – ranging from banks to processors, card schemes to gateway platforms -- and HOW they fit together.
Additionally, learn key industry terminology that can help you navigate payment projects or relationships. Think: What is a back-end network? What is the difference between an acquirer and an ISO? Questions will be fielded from participants throughout the webinar.
2. Overview of Recent
Consolidation
The Next 5 Years – Major
New Entrances
Wrap-up / Q&A
Introduction
Who is Interested in Payments?
Understanding the Landscape
Ecosystem Players
Schemes
Issuers
Acquirers
Processors
Technology Vendors
Agenda
3. My Story – Moving into the Payment Space
Who is ROI Payments?
Why a Boot Camp Series?
Introduction
4. Who?
Roles including Finance, IT, Sales, Marketing, and Treasury are all involved in the payment
chain at some point
It is rare when someone is specifically assigned to payments, as such many people find
themselves unprepared to navigate the payment ecosystem
ROI Payment Webinars attract
A cross section of industries, including state/local government, non-profit
organizations, eCommerce, SaaS and payment industry insiders
Senior Finance folks (CFOs, controllers, etc), technology execs, operations managers and
sales/marketing team members
Why?
People become involved in payment projects and need a holistic overview of the industry
so that they can dive deep into their project, work, etc.
Wikipedia and Google searches don’t provide a comprehensive understanding
Result?
Everybody can benefit from an increased “Payment IQ”
Comprehensive understanding helps in today’s environment (rapidly evolving)
Who is Interested in Payments
5. Useful to use a transaction flow to orient the ecosystem players
For this example, we’ll use a Visa credit transaction
Future boot camps will cover various transaction flows in detail
3 and 4 party networks, closed loop systems, emerging networks, etc
ROI categorizes vendors into 5 major categories:
Schemes, Issuers, Acquirers, Processors & Technology Vendors
Understanding the Landscape
8. Schemes set the rules and standards in a transaction
network, establish branding and spurring adoption
Provide Customer (cardholder) and Business (merchant)
rules, regulations and pricing schemes
There are commercially adopted schemes and, in certain
countries, regulatory promoted schemes
Schemes
Global Regional Emerging
9. Issuers own the customer relationship (i.e. they issue plastic
and get cards into the wild)
Issuers are a customer of the schemes (Visa/MC/etc)
Issuers profit from debt, card holder fees and interchange
Issuers
#1 in US Volume #1 in US Market Share
10. Acquirers own the merchant relationship and enable businesses to participate in the
payment network
In the US, Acquirers typically work through channel partners, called ISOs or “Super
ISOs”, who act as their feet on the street selling and implementing solutions for
merchants.
Acquirers take liability for merchant activity, including financial obligations, regulatory
requirements, security compliance and scheme rules & regulations
They acquire the payment chain on behalf of merchant - which processor to use,
which technologies work with their networks, etc.
Acquirers
#1 in US Volume
#1 in US # of Merchants
11. Processors handle the “muck” of transaction processing and are often called Backend Networks
The industry has a small number of large processors, primarily because the economics support processors that can
operate at large scale
They are technology focused banking networks performing back office functions such as:
Authorization and settlement
Funds transfer to the merchant
Statement generation & interchange calculation
Dispute management
Equipment and software certification
They generally own or have relationships with various front end networks (intermediates between merchant and issuing
bank to authorize cards)
Processors
48% US Marketshare
12. Technology is the most complex and disparate part of today’s payment ecosystem
The Technology Space is innovating very quickly -- ROI focuses most of its attention on this part of
the payment chain
ROI includes everything from PSP’s to Payment Gateways to terminals in this bucket
Technology is where merchants interact with the payment ecosystem
Proxy transactions to front end networks
Implement business rules (tax, fraud, notifications, rebills, verification, etc)
Technology layer keeps merchants from having to interact directly from a technical standpoint
with processors unless scale warrants it
Technology Vendors
13. ROI Payments classifies payment ecosystem into 5 categories:
Schemes, Issuers, Acquirers, Processors and Technology Vendors
NOTE – The payment space is complex and multi-layered. Many vendors
play in several categories and/or resell or bundle each others’ services
Prime example is First Data, who is the processor for most of the major
commercial banks in North America including Bank of America and Citi
Today’s Webinar should be considered a starting point to
understanding the industry
High level terms - ROI has assembled a glossary of terms relevant
to the payment ecosystem that will help you understand
statements, create RFP’s, and negotiate contracts. If you would
like a copy of the ROI glossary, please let us know.
Ecosystem Recap
15. Recent acquisitions show change in the ecosystem
Visa acquires CyberSource (2011)
Acquisition positions Visa in the Technology Space with a leading
enterprise payment platform and SMB gateway
Vantiv acquires Litle (2013)
Acquisition moves Vantiv from processing into online retail solutions with
expertise in rebilling, tokenization, and reconciliation (2013)
Ingenico acquires Ogone
Acquisition provides global payment gateway to the hardware
manufacturer (2013)
Groupon acquired FeeFighters (2013)- demonstrates companies
outside of the ecosystem are vying for entry into the market.
Lesson learned?
Many processors are building technology portfolios to increase
solution set and stay relevant
ROI predicts more acquisitions and consolidation in 2013/14
M&A Activity Shows Industry Change
16. Mobile and Internet commerce are causing change and
introducing new competitors and technologies to
payments
Major new players will enter the payment stream in the
coming years, such as
Mobile / telecom carriers (ATT, Verizon, etc)
Technology companies (Apple, Microsoft, Google)
New payment methods are gaining traction (Bitcoin)
Regulatory and competitive forces may change the face
of the payment chain as we know it today
Missing Logos – Upcoming Entrances