Download - Innovations in Payments
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Innovations in PaymentsGeoffrey BarracloughEVO Payments International
15 September 2016
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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
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Why are Payments Important
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Annual cost of Interchange to UK retailers - BRC
Payments CostsThe Peak-End Rule
£1b
Mobile Matters
Q4 2015 conversion rates - Monetate
Desktop Tablet Mobile0%1%2%3%4%5%6%
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Shopper journeys getting longer and more complex
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Marketing Visit Shop Make Purchase
After Sale Service
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Leading to more complex shopper journeys
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Marketing Visit Shop Make Purchase
After Sale Service
Download App
Visit Website
Visit Shopping
MallCustomise Product
Respond to Marketing
Geo Message Sent to Mobile
Research Product
Search Reccomendations Read
Reviews
iBeacon Message
Share on Facebook Loyalty
Points
Post Review
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Each retail sector is changing at its own pace
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White goods
Researchedpurchase
Habitual purchase
Impulse purchase
Fashion Grocery Fast food Petrol Rapid transit
Indicative graph only
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Payments and shopping…
…is best understood
through behavioural economics
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Reflex PayHow easy is it to break into
long standing payment habits?
Speed is relativeShoppers and the payment
industry have different concepts of time
Shoppers are easily discouragedThe first transaction has to be good
ConfirmationNeeds to be clear and
consistent
There’s a strong pessimism bias with smartphone paymentsApple Pay may overcome this
Our research showed…
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…five behavioural factors determining
the speed of adoption of new ways of paying
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Retailers
Payment
industry
Successful payment innovation requires the needs of all stakeholders to be aligned
SpeedSimplicityStrategic alignment
Cost
It’s a complex business…
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Shoppers
How well did these do?
…with multiple stakeholders. All need to be satisfied…
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Get me in/Out quickKiosks and self-service | Contactless
Retail as TheatreMobile point of sale | Visual merchandising
But forms part of the future of retail
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…retailers are focused on transformation programmes delivering a much broader and enriched Omni-channel customer experience.
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Four main questions…
How do I make it easier to take money on a
mobile phone - website or app?
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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?
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Contactless - a rare, popular payment innovation
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18% of all POS purchasesUp 200% y-o-yATV = £8.60
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
£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
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Customer experience innovation
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Making mobile payment easier.It’s buttons underpinned with the -Pays.
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Improving Plastic
Improving payments
Removing Payments
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The Pays are a valuable underpinning technology layer but retailers need to build the CX
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In-store
Online
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What of the CX?Is it (finally) time for app payments in-store?
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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.
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If we’re trying to reduce friction, what future for the terminal?
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SmartPOS bundle Single unit with appstore
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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
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Future of payments is that you won’t notice payments
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Payments ceases to be a separate business process
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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 cards21
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Will you block this card?
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Brexit questions
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Does MIF still
apply?
Will my suppliers need different licenses?Where is my
data?