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March 3, 2017

To infin-tech-ity and beyond

With the onset of spring there’s a sense of shifting change in the payments world too. Or is it that I’ve just been to a very forward-looking payments conference in Berlin, namely Merchant Payments Ecosystem (MPE). New payments roles are coming into view as we limber up to PSD2. Anna Milne writes

By Anna Milne

With the onset of spring there’s a sense of shifting change in the payments world too. Or is it that I’ve just been to a very forward-looking payments conference in Berlin, namely Merchant Payments Ecosystem (MPE). New payments roles are coming into view as we limber up to PSD2. Anna Milne writes

In case there was any doubt, the future is mobile (and probably WeChat). Not a single c-level payments, retail or banking exec at MPE disputed the fact that all things consumer payments are converging on mobile technology. Incoming PSD2 regulation is a massive opportunity, and driving this change in great measure.

Yes, the banks see nothing but a compliance burden, indeed they are doing naff all about it, going for the collective deadline-swerve. They love deadlines. They love the whooshing sound they make as they fly by (as do we here chez Payments Towers).

Where will it leave the bigger players, the acquirers, the processors, a large chunk of whose payments business will be shorn off by the facilitation of merchants accessing customer bank accounts directly, without the middle man, so to speak.

They will need to have scale, access to distribution and various locations as well as access to the networks such as Visa, MasterCard, etc.

The big players needn’t worry. Worldpay, ACI? It’s in the bag, love(s). After an initial period of jostling for position in the new framework, there will be a handful of big players serving the proliferation of small players in the system.

How will they compensate the loss of processing business? They will develop new services- they will guide the smaller players through the digital ecosystem, they will provide tighter, better fraud detection, chargeback services- think Carrefour suddenly being hit with chargeback issues left, right and centre from myriad new providers.

In short, they will evolve from being card payments providers to plain old simple payments providers, or arbiters, streamlining and simplifying the open API system.

As Paul Thomalla, ACI Worldwide, put it at MPE, “PSD2 is the best thing the regulators have brought out (..) fixing a siloed and analogue system; we need to get out of legacy thinking, let alone legacy systems, and we need to be digitised players instead of digital players.”

What he also said was he’s thinking ahead to PSD3 already. Well, that was certainly the first time I have heard any whisper of a PSD3, let alone paid any thought service to any directive that might follow PSD2- so encompassing and definitive has the limbering up to it been.

So Mr Thomalla, if you’re out there, you might expect a call from EPI in the next week to try and scope out your thoughts in this regard. For I can see how, by casting our thoughts and expectations beyond PSD2, suddenly it might just fall into place a little easier.

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