By Peggy Bekavac Olson
Money20/20 is a worldwide gathering of innovators in the evolution of commerce and the concurrent ongoing digitization of money. The relatively new conference and exhibition focuses on the intersection of payments and financial services with retail, mobile, marketing services, data, technology and other sectors that are profoundly changing how people and businesses manage, spend and borrow money.
More than 7,000 payments professionals gathered in Las Vegas in October 2014 to learn the latest on how the commerce ecosystem is rapidly changing. Double in size from 2013, the conference offered extensive programming, comprehensive vendor exhibits with more than 300 companies showcased in the tradeshow and meeting areas, and numerous networking opportunities. As expected, a flurry of activity prevailed with innovation announcements, demonstrations, partnering and private equity opportunities, and more.
Keynotes were delivered by executives from traditional industry giants, as well as technology companies that are new entrants to the payments sphere. American Express Co. Chief Executive Officer Ken Chenault's keynote was engaging, giving the audience a real flavor of his personality and leadership style.
During his keynote, Dekkers Davidson, CEO for the Merchant Customer Exchange retailer mobile wallet consortium, appeared battle-worn. He is continuing to deal with negativity around MCX members not enabling Apple Pay in their stores, plus the aftermath of a data breach involving MCX pilot program users' email addresses.
Programming tracks covered a range of subjects, including legal and regulatory; disruptive financial inclusion; (Bit)coinWorld; what's in store for retailers; identity, security and fraud; entrepreneurship and innovation; payments and commerce disruptions; bank and nonbank disruptors; innovations in online payments; global landscape; payment processing; business-to-business and small and midsize businesses (SMBs); mobile payments and security; marketing services; new market research; and demos, case studies and announcements. There were so many sessions it was hard to decide which to attend during any given period.
Also at the conference were the Launchpad360° sessions, which had proven popular last year. Startup companies were given 360 seconds before a large, general session audience to provide a 360-degree view of their leading-edge innovations.
As you can imagine, top on everyone's discussion list, from keynote speakers and panelists to regular attendees, was talk about Apple Pay. Fortunately, I was able to meet one-on-one with several acquiring industry executives during the event. Here are pertinent excerpts from our conversations.
"There's still more fertile ground for ISOs, except for the ones selling only on price," said Robert O. Carr, Chairman and CEO of Heartland Payment Systems Inc., the fifth largest merchant acquirer in the United States. "ISOs have a place and role in today's market if they have the ability and expertise to add value to truly help business owners."
When asked if the industry's had enough of data breaches, Carr responded, "The Target breach changed everything." He believes improving payment data security today requires a comprehensive approach, which his company provides in an offering called Heartland Secure. "EMV, end-to-encryption and tokenization technologies working in tandem provide the highest levels of security available to protect against fraud," Carr said. These technologies take data out of the point of sale and reduce Payment Card Industry (PCI) Data Security Standard (DSS) scope. "All three technologies should be available to merchants of all sizes. This is realistic and cost-effective," Carr noted.
Commenting on the plethora of mobile POS solutions in the market, Carr talked about Leaf, a Heartland wholly owned subsidiary, and its Android-based tablet solution and small business software platform. Leaf's open technology connects merchants with apps to improve employee management, track sales and grow their businesses through innovation.
Carr believes that to win in the small to midsize business segment, providers must offer commerce enablement along with interesting and differentiated business services. "There are lots of unsustainable models out there, but there are winners," he said. "The pace is accelerating; however, there will be a shakeout and some consolidation."
Carr made a brief digression during the mobile conversation to talk about dongles. "Interestingly, we're selling dongles like crazy," he said. "People are buying them for backup instead of using old-fashioned knuckle busters to keep their businesses running. Having a dongle is like having an insurance policy."
Carr also mentioned Heartland's recent acquisitions of Xpient Solutions and TouchNet Information Systems. Xpient provides technology to 11 of the top 25 quick-service and fast-casual restaurant brands, including Taco Bell, Jack in the Box, Panera Bread and Panda Express, spanning more than 25,000 installed locations and $15 billion in annual credit/debit card processing volume, Carr noted. TouchNet, an integrated commerce solutions provider to higher-education institutions, added more than 600 higher education institution clients serving over 6 million students to Heartland's Campus Solutions business. These acquisitions exemplify Heartland's efforts to add complementary solutions and capabilities that "enhance merchant value," Carr noted.
At the conclusion of our conversation, Carr informed me that, with some help, he recently wrote a book titled, Through the Fires: An American Business Story of Turbulence, Triumph and Giving Back. The book is available in digital format from Amazon.com.
LoopPay Inc., the startup company founded by industry notables Will Graylin and George Wallner, was given high marks in a recent Consumer Reports mobile wallet evaluation. Earning the top spot over Google Wallet, Softcard and Apple Pay, LoopPay ranked highest primarily for its widespread acceptance at more than 10 million merchant locations.
LoopPay's patented Magnetic Secure Transmission (MST) technology turns existing magnetic stripe readers into mobile contactless readers without any change or cost to merchants or their payment processors, enabling secure mobile payments. "Our mobile wallet works at more than 90 percent of point of sale terminals installed in the U.S. today," said Gregory Mann, Chief Marketing Officer for LoopPay. "You simply hold your phone close to the terminal's stripe reader to activate a transaction."
Other wallets in the survey rely on near field communication (NFC), which is the root of their acceptance problem, according to Mann. Today, just 220,000 merchant locations or so have NFC capabilities in place that can be turned on. However, the number of merchant locations should rapidly grow in the next year with the expected compliance upgrades to terminals that support Europay/MasterCard/Visa (EMV) and NFC technologies.
"Consumers want a leave your wallet at home solution and LoopPay delivers," Mann said. "It works with all kinds of cards, including credit, debit, private label, prepaid and gift, as well as loyalty and rewards," he added.
The LoopPay app can be downloaded from Google Play or the App Store on iTunes. It is compatible with iPhone 4s, 5, 5c, 5s, 6 and 6 Plus models and popular Android phones running OS 4.3 and higher. The new LoopPay CardCase attaches to smartphones to enable push-button payments. It comes with a storage compartment for identification cards like a driver's license and any physical payment cards the user may want to have on hand for backup.
"We're just beginning to market LoopPay," Mann said. "We're already in thousands of Staples stores and on Staples.com, Amazon.com and SkyMall.com. Come January, we will be in SkyMall's print catalog and we're rolling out to a bunch of cellular carriers during the first quarter of 2015," he noted.
For now, LoopPay seems to have a good thing going because competitive offers aren't much use in the marketplace if they're not widely accepted. LoopPay's success remains to be seen, but as it is with all technology, consumers will ultimately determine if this mobile wallet will become a winner.
NCR Corp. invented the cash register and is looking to get back into the SMB market in a big way with NCR Silver. "Increasing the number of NCR Silver integrations to include popular mobile wallet, e-commerce, accounting, gift and loyalty solutions is a top priority," said NCR Small Business President Justin Hotard. "It can be a big transition selling robust SMB solutions," he added. That's why NCR's partner program offers three levels of engagement. Resellers can decide if they simply want to refer business or do more.
"We want to reduce any friction our partners may experience to make NCR Silver sales easy," Hotard said. "We are helping with lead generation through advertising and promotions. Plus, we have a comprehensive sales and marketing portal with a whole set of marketing collateral. And we have dedicated pre- and post-sales support so that you can speak directly with a live person to get your questions answered."
NCR Silver works with any processor; partners earn referral fees on all deals, as well as margin on equipment bundles at the "expert" level, Hotard pointed out.
Optimal Payments PLC is a global provider of online payment solutions headquartered on the Isle of Mann, with large operations in United Kingdom and Canada. In the summer of 2014, Optimal acquired Southern California-based Meritus Payment Solutions and Global Merchant Advisors, to strengthen its presence in the U.S. marketplace. These acquisitions create a solid U.S. customer base for Optimal, as well as provide strong U.S. operations and sales teams, Optimal noted.
Optimal's Netbanx gateway service delivers complete online processing and fraud detection that includes processing of local currency payments from customers in the U.S., Canada and beyond without cross-border surcharges, the company noted.
"We are a one-stop-shop for multinational companies who want to efficiently and effectively manage their payments," said Danny Chazonoff, Optimal Payments Chief Operating Officer. "We offer multiregional acquiring, making processing in the U.S., Canada, U.K., and Australia and beyond especially simple, straightforward and seamless."
Optimal also reported that it recently introduced the Netbanx real-time merchant onboarding service; unveiled Netellergo!, a flexible, easy-to-use online checkout page that handles all of the legal contracts with payment providers and assumes all technical integration; launched a new card issuing services division offering one-stop-shopping for fully customized prepaid cards; made available an iOS software development kit (SDK) for Apple Pay; and now offers full acquiring services for U.K. and European merchants after obtaining principal memberships with MasterCard Europe and Visa Europe.
Planet Group Inc. informed me that it provides merchant accounting, settlement and chargeback software, giving clients who license its software complete control of back-end processing while simplifying back-office operations. The company felt that Money20/20 was a place to get the word out about its offerings and to meet with clients and prospects.
"Acquire360 completely streamlines back-end payment processing for merchant acquiring portfolios," said Mike Dooley, Director of Sales for Planet Group. "We have superior risk, reserve management and pricing tools, plus our interchange management capabilities are second-to-none. In fact, one of our clients, a top 15 U.S. merchant acquirer licensing Acquire360, realized a 12-month investment payback based on interchange savings alone."
Planet Group recently reported that its Acquire360 and Exception360 software supports the American Express OptBlue program, providing clients with a single interface to all the major U.S. card brands.
"Our clients can give their merchants better pricing than they can normally get from AmEx – along with one contract, one boarding process, one settlement process, one monthly statement and one exception handling process," Dooley said. "Plus, their merchants get faster funds availability, consolidated reporting and one-stop, single-source servicing."
Powa Technologies stated that it specializes in technologies that transform and redefine the retail experience, incorporating the needs of always-connected consumers demanding simplified, fast and personalized transactions. Bringing together innovations in mobile POS, e-commerce web platforms and payment-enabling app technologies, Powa offers versatile and scalable products to empower merchants and consumers in both online and offline retail environments, the company noted.
Powa's main focus at Money20/20 was touting its PowaPOS integrated hardware POS solution, which acts as a sophisticated all-in-one POS terminal. "We want to be the de facto hardware platform for Independent Software Vendors (ISVs) developing tablet-based POS solutions," said Paul Rasori, Executive Vice President, Product and Marketing, for Powa.
He added that an advanced SDK enables easy integration to software applications and establishes an out-of-scope environment for PCI DSS compliance.
On display at the company's exhibit booth was a variety of differently configured PowaPOS all-in-one tablet systems. Their sleek design creates a compact footprint that takes up minimal counter space and uses a single power cord while leveraging Wi-Fi or mobile connectivity.
Powa pointed out several of its distinguishing features, as follows: its equipment mount adjusts up and down and swivels 180 degrees for better cashier and customer viewing, securely holding any type of iOS, Android or Windows tablet. The back of the mount houses PowaPIN, a device that supports EMV and mag stripe transaction acceptance.
Common retail peripheral components are also integrated, including a thermal receipt printer located in the base, a removable scanner that supports standard and two dimensional, quick response barcodes, and a cash drawer that resides underneath the rest of the equipment. Popular third-party devices, such as PIN pads, scanners, scales and printers can be easily plugged into the PowaPOS USB expansion hub, the company noted. PowaPOS is distributed in the United States through POS Portal, The Phoenix Group and Ingram Micro. It comes with preloaded software from various ISVs. "All merchants have to do is take PowaPOS out of the box, plug in the power cord, configure connectivity and they're up and running – It's that easy," Rasori said. "PowaPOS is totally nonthreatening to the payments ecosystem as it is software, developer, operating system, PIN pad and processor independent."
Sage Payment Solutions Inc. garnered significant attention as Money20/20's avatar booth sponsor. Conference attendees lined up in droves to have avatars drawn by character sketch artists. This proved to be a good opportunity for Sage representatives to meet and greet the throngs, as well as take advantage of the opportunity to promote their business.
"Integration-as-a-service levels the playing field when it comes to omni-channel payments," said Rob Bertke, Senior Vice President of Research and Development for Sage. "We're giving SMBs the solutions and tools to compete with big-box retailers, while making it simple enough so they can focus on running their businesses." He also pointed out that integrating payments into business software solutions "helps ISOs sell and keep their merchants long-term."
Bertke also noted that the Sage Exchange platform is an all-in-one payment management system that enables merchants to accept multiple ways and channels for payment, while centralizing payment data for real-time viewing, management and reporting. Sage Exchange is an open platform for any business software. Thirty-two Sage software packages and 270 independent software solutions for enterprise resource planning, inventory, accounting, loyalty and rewards, mobile marketing and more, are integrated with Sage Exchange today and the number is rapidly growing, Bertke added.
"We are quickly broadening our ecosystem of software partners," said Ray Merck, Vice President of Strategic Alliances and Partnerships for Sage Payment Solutions. "Our doors are open to any ISOs, ISVs, VARs and merchants that have clever integration ideas. We're here to help and make it happen."
Transaction Network Services reported that it securely manages network connections to more than 400 payments companies around the world, giving merchant acquirers, processors, payments innovators, retailers and financial institutions incredible global access with just one connection. A complete array of highly secure, reliable, flexible and scalable connectivity and value-added communications services simplifies complex payments infrastructures, achieves cost savings and drives speed-to-market for new payments offerings, both domestically and internationally.
"TNS is the best kept secret in the industry," said Lisa Shipley, Executive Vice President and Managing Director of Payment Network Solutions for TNS. "We seek to understand specific business needs and goals to configure an optimal combination of services that increase revenue, reduce risk, and save time and money."
TNS noted that it is best known as the titan of dial connectivity, but it is emerging as a single-source provider for global payment connectivity and related services. TNS also pointed out that it can connect virtually any type of device, from POS terminals, electronic cash registers, ATMs, and kiosks to PCs, smartphones, tablets and mobile wallets, using wireless, broadband and dial communications to any payments endpoint globally, including card brands and debit networks; card issuers; ATM networks; acquirers, processors and gateways; loyalty, offers and rewards companies; financial institutions; security and fraud vendors; money transfer agents; and, last but not least, retailers.
Add in value-added services wrapped around connectivity, like encryption and tokenization, SIM card provisioning, and message and protocol conversion, and you've got a company that can deliver solutions that meet specific business needs, TNS added.
"We've met with lots of great companies here at Money20/20, and what we're hearing is that we're a great scaling partner," Shipley said. "We provide immense and fast access to the payments marketplace, while giving our clients the ability to maintain operational control without in-house infrastructure and resources. This is critical for businesses wanting to capitalize on new opportunities that drive revenue and create strategic advantage."
This year's Money20/20 turned out to be a great venue to hear what's new and happening in payments, as well as to gather views and perspectives from industry executives and innovators. Money20/20 will be back in Las Vegas during October of 2015. The conference is expanding with a catalyst event focused on the opportunities and challenges of the European payments and financial services industries to be held in the spring of 2016.
Peggy Bekavac Olson is founder and principal of Strategic Marketing, a full-service marketing and communications firm specializing in financial services and electronic payments. She serves on the Board of the Women's Network in Electronic Payments (W.net) and on the Program Planning and Communications Committees for the Electronic Transactions Association. She can be reached at 480.706.0816 or firstname.lastname@example.org. Information about Strategic Marketing can be found at www.smktg.com.
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