What's next for merchant payments' ecosystem in 2020?

Six inspiring speakers from MPE 2020 provide unique insights into how the payments ecosystem will look in 2020 and what the industry should be prepared for.

The way people pay is changing rapidly, thanks to technological innovation and digitalization. Society is becoming increasingly cashless as more consumers choose to rely on cards, as well as alternative payment methods. Moreover, the changing payments landscape challenges everyone. For merchants, payments are no longer just a cost of doing business but can drive growth, if approached holistically by them.

On top of that, there is a myriad of new technologies like Artificial Intelligence (AI), Machine Learning (ML), biometrics etc. impacting the commerce and payments industry. The Internet of Things creates a seamless web of touchpoints, through integrated apps, smart devices, and integrated payments, making electronic payments even more convenient.

At MPE2020 (Berlin, Feb 18-20), over 140 knowledgeable speakers will provide unique insights on what payment providers are doing to help merchants to achieve frictionless shopping experience. Until then, here is what some of them have to say regarding the future of the European payments ecosystem.

Regulation, PSD2 and SCA

“As the uncertainty of Brexit lingers, this will undoubtedly pose challenges for businesses both selling into and out of the UK. While a lot of regulations will likely remain in place (at least initially), any changes will incur costs to businesses; whether that’s man-hours spent updating processes or ensuring documentation is up-to-date. Focusing on SCA specifically in 2020 - with the extended deadline this will hopefully allow merchants time to implement the additional security measures. While it may not be a completely seamless journey, PSP’s can really aid this transition by providing practical guidelines and steps on what merchants need to do next.”

Jeremy Nicholds, CEO, JudoPay

Open Banking payments

“Merchant payments will undergo radical changes in 2020, but not in all markets. The key change will be driven by the introduction of PISP payments, that in card-based online payment markets has been forecast to replace up to 30% of these transactions over the next five years. Of course, this does not come without challenges. Issues around consumer liabilities are still somewhat grey and, in many countries, where regulations have been built around card payments, consumers are not nearly as well protected. There is also the issue of banks reputation and real risk in that they cannot contract with these new types of companies but must check on their credentials each time they approach the bank. This real-time checking of TPPs with no latency involved, but no central government run, online, real-time database is also a challenge. But what it will create is a new debit network, it will as such also present new commercial challenges to banks as they cannot charge for these transactions and receive no interchange fees.”

David Parker, CEO, Polymath Consulting

Changing commerce and shopping: mobile and seamless customer experience

“We will see growth of self-serve checkouts and voice shopping in 2020. Both of these experiences require payments to be completely invisible. A large number of customers are expected to experience the convenience of voice shopping and payments in 2020. Consumers while shopping online or in physical settings will continue to move towards payment experiences which offer less friction. Mobile will remain the driving force for changing customer habits. We will see more customers moving from dipping cards to tapping them, from tapping cards to tapping mobile and so on.”

Amit Kurseja, Head - External Payments, Amazon Pay India

Growing relevance for Chinese-based payment methods

“For many European merchants, having the ability to serve the growing number of Chinese tourists at the POS has been a strategic issue in the last 12-18 months, putting QR code capabilities top of mind in many instances. UnionPay will continue to struggle to compete with AliPay and WeChatPay in the acceptance space and will look for on-us traffic opportunities by expanding their issuing business outside China.”

Volker Schloenvoigt, Principal, Edgar, Dunn & Company

Data is key in omnichannel and online-to-offline (O2O) intersection

“Payments will evolve to include more value added services around them and the industry focus will shift to O2O (online to offline) intersection. O2O intersection in loyalty programs can be another vivid example - offline loyalty card can be automatically applied online and vice versa, so the customer can receive points or bonuses by all means. PSPs will try to get closer to the customer and acquire more space across his value chain, not just fulfilling his/her payment needs, but contributing to lifestyle, interests, loyalty programs and everything in between. Usability will be more important than understanding under the hood operations, as of an example of Apple Pay - one click and the payment is conducted, there is no need to know where did the money come from, what has happened in the backend. PSPs will try to get closer to the customer and acquire more space across his value chain, not just fulfilling his/her payment needs, but contributing to lifestyle, interests, loyalty programs and everything in between.”

Ivan Glazachev, CEO, Yandex.Checkout

Interoperability, collaboration and emergence of global merchant payment providers

“For many acquirers, it will become more important for retention of existing merchants also to offer alternative payments as a choice, but in many cases, there will be no explicit “business case” for the relevant necessary IT investments. Therefore, in some cases, new commercial partnerships might evolve between providers to keep incremental IT costs low.”

Nicolas Adolph, Chairman, EPSM

Future of merchant payments, new business models and technologies supporting commerce and payments are among the key topics to be discussed at MPE 2020, in Berlin, February 18-20.

About Merchant Payments Ecosystem

MPE is the only inclusive European discussion platform for merchants, acquirers, PSPs, and Point of Sale vendors, established companies as well as start-ups, fintech, regtech and paytech and everyone in between.