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A Thing A Bigger Thing

Monday, March 25, 2019

Worldpay first to enable Amazon Pay

O n the heels of news about Worldpay's pending merger with FIS comes word that Worldpay has become the first acquirer to support Amazon Pay for its merchants. Now U.S. merchants can add Amazon Pay as an accepted payment option for online customers, using Worldpay as both gateway provider and acquirer, the company stated.

Amazon Pay allows consumers to pay for purchases at participating online businesses using the payment information they keep on file with Amazon. It also offers the convenience of one-click purchasing, which consumers find appealing. On the back end, a new application programming interface was designed to facilitate seamless onboarding for Amazon Pay, Worldpay representatives noted.

Amazon, the leading U.S. ecommerce site, is among the largest ecommerce sites worldwide with over 310 million active customers, said that "tens of thousands" of online merchants offer Amazon Pay, which was introduced in 2007. Currently, Amazon pay is available in eighteen countries: Austria, Belgium, Cyprus, Germany, Denmark, Spain, France, Hungary, Luxembourg, Republic of Ireland, India, Italy, Japan, Netherlands, Portugal, Sweden, United Kingdom and United States.

A win for Amazon, Worldpay, merchants

The deal with Worldpay was reportedly inspired by Amazon's desire to continue to expand Amazon Pay's reach to larger merchants and is expected to succeed in driving even greater online merchant adoption, given Worldpay's market footprint. The company processed over 40 billion payments across 146 countries in 2017 and is the largest acquirer in the United States.

"Working with Worldpay will make it easier for merchants to grow their business by providing customers with a familiar and trusted experience throughout the shopping journey," said Patrick Gauthier, vice president at Amazon Pay.

"By teaming up with Amazon, we have an even stronger capacity to enable digital commerce, streamline the checkout experience and drive frictionless payments for our merchants," said Asif Ramji, chief product and marketing officer at Worldpay.

Kudos to ETA's Forty Under 40
Friday, March 22, 2019

A s the Electronic Transaction Association embarks on a new chapter under new leadership, the global trade association is honoring 40 payments executives under 40 years of age whose leadership and contributions are reshaping technology and commerce. The 2019 award recipients, chosen from more than 100 nominations in multiple industry sectors, were selected for their professional character and impact on the payments industry, ETA representatives stated.

The ETA Forty Under 40 provides a platform for innovative leaders to engage with ETA members and payments industry stakeholders. This year's honorees will be recognized in the ETA's Transaction Trends magazine and at Transact, the association's annual convention and expo to be held in Las Vegas April 30 to May 2, 2019.

"ETA launched the Forty Under 40 last year to highlight the next generation of payments professionals who are moving the industry forward," said ETA interim CEO Amy Zirkle, noting that the program was instrumental in introducing industry leaders from across the payments ecosystem. "Discover Global Network joined us this year as the sponsor of the program and will help us honor the 2019 class on the evening of May 1st during a special Young Payments Professionals and Forty Under 40 networking reception at TRANSACT," she added.

Kevin Jones, president and chairman of the board at ETA and CEO of Celero Commerce, called 2019's honorees "the leaders who will power the next-generation of payments technology and merchant services."

The next evolution of payments

2018 award recipient Lane Conner, founder and CEO at Fuzse, commended the ETA Awards and Recognition Committee for showcasing leaders who "are game changers, disruptors, and outside-the-box thinkers. This is a group that we are going to look to take us into the next evolution of payments."

Cory Capoccia, president at Womply, complimented the ETA for keeping in step with the ever-changing payments sphere. "Having spent a decade and a half in the payments industry, I've always had a special admiration for ETA as an organization and am humbled to be a Forty Under 40 honoree," he stated. "The payments industry is facing unprecedented change, which brings new challenges and opportunities every day. I'm excited to continue working with our industry partners to make payment data more valuable for small merchants trying to find a level playing field in our increasingly digital world."

2019 honor roll

This year's Forty Under Forty honorees include:

"What a prominent group of individuals," said Peter Fitzpatrick, vice president, payment networks, at Agreement Express. "It means a lot to me to be included, and it means a lot to Agreement Express. We're working hard to provide the best toolset in the industry for automating the application process. For me, this honor is evidence that our customers feel we're on the right track."

SEAA returns to Atlanta
Wednesday, March 20, 2019

T he Southeast Acquirers Association will host its annual conference March 25 to 27, 2019, at the Loews Atlanta Hotel, which is located in a region numerous payments companies call home. The independent not-for-profit trade association, established in 2000, has prepared a varied menu of seminars, exhibits and presentations for a diverse audience. Event organizers noted that equipment manufacturers, finance experts, technology startups and merchant acquirers will be among attendees, speakers and exhibitors.

The SEAA and other regional shows provide merchant level salespeople (MLSs) with networking, business and educational opportunities in affordable, locally situated venues, stated John McCormick, SEAA founder and board member. Recalling the success of SEAA 2014, also held in Atlanta, McCormick said hundreds of organizations and professionals have already registered for this year's show.

Georgia's Transaction Alley

The Technology Association of Georgia dubbed the Atlanta region "Transaction Alley" in 2010, noting that Georgia-based companies facilitate nearly two-thirds of all U.S. credit, debit and gift card transactions.

"Atlanta, along with the surrounding areas of Georgia, has evolved to become the epicenter of a growing segment of the financial services industry – a sector often known as Financial Technologies or FinTech," TAG members wrote. "This sector encompasses the product and service companies that support the technology needs of the financial services industry and, ultimately, the payment-processing infrastructure of the economy."

Additional data from TAG's fintech division shows continuing unabated growth in the region. Economic indicators show that Georgia fintech companies generate more than $72 billion in annual revenues. These companies employ more than 38,000 professionals in the state and over 130,000 globally and six of the ten largest U.S. payments processors are based in Georgia, researchers noted.

New and legacy players

Trending Twitter hashtag #SEAA2019 shows the conference is drawing interest far beyond Georgia and the Atlanta area. Exhibitors and attendees from tech startups and established, nationwide U.S. brands will participate in the show. The presenters listed below will examine the following topics:

Additional workshops and breakout sessions will explore vertical industries and technology updates. Sessions will include Retail Solutions Providers Association's comprehensive look at the evolving small and midsize business marketplace; Visa's research on growing contactless adoption; insights on social media for fintech professionals from Mary Hagen, senior vice president of electronic banking and customer support at Meridian Bancorp; and an overview of omnichannel strategies by Greg Aamoth, founder of POPcodes.

In addition, Aamoth will share experiences and key learnings from his 10-year stint as vice president of customer and marketing systems at Macy's, event organizers stated. These experiences shaped his view of how acquiring banks and processors, ISOs and MLSs, and their growing number of fintech partners can employ omnichannel strategies, such as push-button services and omnichannel support, to build profitable merchant portfolios.

FIS-Worldpay mega merger: pros and cons
Tuesday, March 19, 2019

M erchant acquiring is shaping up as a battle of the titans with this week's news that Fidelity Information Services is merging with Worldpay Inc. The combination is valued at $43 billion in stock and cash to Worldpay shareholders, which works out to a 14 percent premium over Worldpay's share price, said Thomas McCrohan, managing director of financial technology and payments at the research and analytics firm Mizuho Americas.

News of the FIS-Worldpay combination comes on the heels of Fiserv's acquisition of leading acquirer First Data Corp. It also comes less than two years after Cincinnati-based Vantiv paid $10.6 billion for Worldpay Group plc and rebranded the combined entity as Worldpay Inc. As of last year, Worldpay was the largest merchant acquirer in the United States in terms of card processing volume, according to the Strawhecker Group. First Data held the number four spot.

Worldpay originally was a unit of Royal Bank of Scotland, but the bank was forced to sell the unit in 2009 as part of a U.K. government bailout of RBS. Pending approvals by shareholders and regulators, the combined company will retain the FIS moniker with headquarters in Jacksonville, Fla.

"The deal marks one of the biggest transactions in the fast-consolidating payments sector that is under pressure to cut costs," Raymond Pucci, director of merchant services at Mercator Advisory Group, wrote in a blog post on the FIS-Worldpay combination.

"Scale matters in our rapidly changing industry," Gary Norcross, chairman, president and CEO of FIS, said in a press release. Norcross will retain the titles of FIS chairman of the board, president and CEO.

"As a combined organization, we will bring the most modern solutions targeted at the highest growth markets." Charles Drucker, executive chairman and CEO at Worldpay, said the combined companies will benefit "from new scale and capabilities that will truly differentiate the company globally." Drucker will serve as executive vice chairman of the board of the new FIS.

'Bulking up,' diminishing choices

Like Fiserv, FIS is a leading provider of back-end processing services to banks and credit unions. But unlike Fiserv, which acquired First Data to enter the merchant acquiring space, FIS already has an established presence in merchant acquiring.

"It has been bulking up its merchant offerings to include business tools for retailers, such as analytics and inventory management," Pucci noted. "Further, FIS has merchant marketing and loyalty programs, as well as merchant gateway services to enable ecommerce transactions on a global basis." Pucci suggested other mergers and acquisitions involving merchant acquirers could be in the offing. "M&A departments will be working overtime to tee up new possibilities," he wrote.

Not everyone is convinced this is good. Industry attorney Adam Atlas said ongoing consolidation means ISOs have fewer choices for processor/acquiring partners. "Years ago, ISOs could shop for a deal with one of a handful of processors that did direct deals," he said.

Now three of those firms – Worldpay, Vantiv and NPC (which Vantiv acquired in 2010) – are one, Worldpay, which is about to be acquired by FIS. Two others – ChasePaymentch and Global Payments – are believed to be retreating from retail ISO deals, Atlas noted. "[W]e are left wondering how ISOs will be able to solicit competing bids for their sales work," he added.

Fed prepares for triennial study, evaluates ACH road map
Friday, March 15, 2019

T he Federal Reserve Board disclosed March 14, 2019, that it will invite select financial institutions and payments industry stakeholders to participate in its seventh triennial Federal Reserve Payments Study. The independent research, to be conducted by McKinsey & Co. and Blueflame Consulting LLC, will separately survey banks and processors to assess banking and payment card processing trends.

The study's executive sponsor, Mary Kepler, senior vice president of the Federal Reserve Bank of Atlanta, said the Federal Reserve will publish aggregate estimates, and individual survey data will remain strictly confidential. Analysis will include developing trends in in the number and value of payments made with checks, cards, electronic transfers, and various alternative payment initiation methods and systems over the past 12-month period, she stated.

"The U.S. payments system has changed dramatically since 2000, and the Federal Reserve Payments Study has served as an aggregate benchmark for the payments industry, policymakers, and the public," Kepler said. "Robust industry support and respondents' willingness to participate is paramount to our ability to publish timely, accurate, and high-quality results."

Faster payments, settlements

In a 2018 town hall meeting, Esther George, president of the Federal Reserve Bank of Kansas City and executive sponsor of the Federal Reserve System's Payments Improvement Efforts, pointed out that technology is changing. Emerging technologies enable people to pay each other instantly. However, many of these transactions occur outside the banking system, without the security that a strong regulatory framework can provide.

Noting that progress to date has been a result of active collaboration, George called for payments industry stakeholders to participate in addressing the mismatch between faster payments and slower settlements. Interbank settlement for alternative payments schemes can create delays and pose risks to banks, George stated. A nationwide, seamless way to send and receive funds would solve these issues.

"It makes sense for us to look at how changes in the settlement process can encourage faster payments and enable everyone to gain the benefits of a more efficient system," she said.

ACH settlement road map

Recent developments affecting the automated clearing house (ACH) system reflect the complex realities of aligning faster payments and faster settlement. The ACH Network is readjusting its implementation schedule, according to NACHA, the governing body for the network.

On March 12, NACHA revised the schedule for same-day clearing and settlement of ACH transactions from the original date of Sept. 18, 2020 to March 19, 2021. NACHA attributed the delay to the Federal Reserve Board, noting that the ACH Network is waiting for the Fed board to approve procedural changes. The ACH processed 23 billion payments in 2018, its highest volume in a decade. In February 2019, ACH payments volume exceeded 100 million transactions and $1.9 billion in payments, a 7.2 percent increase over the same period last year.

Jane Larimer, chief operating officer at NACHA said these milestones indicate the ACH Network is a vital part of the American economy. "The nation's consumers and businesses are clearly expressing their preference for electronic payments and the ACH Network will continue evolving to provide the services they need," she said.

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