The Green Sheet Online Edition
November 23, 2015 • Issue 15:11:02
Trade Association News:
Las Vegas hosts global, regional payments events
Two payments industry conferences were held in Las Vegas during the last week of October 2015. Money20/20 was billed as the largest convention in payments history; the Western States Acquirers Association was a well-attended regional gathering.
Despite obvious differences in size, both shows delivered well-organized, incisive content. Payments analysts who attended both venues noted similarities in presentations and topics of interest such as Europay, MasterCard and Visa (EMV) migration, mobile payments, security and omnichannel commerce.
An abundance of new and emerging companies at these events reflected a convergence of digital immigrants and digital natives across the evolving payments sphere. Money20/20 hosted a hack-a-thon competition, StartUp Pitch and LaunchPad 360, giving entrepreneurs the opportunity to compete and promote their emerging companies. WSAA entered its 12th year with a mix of old and new exhibitors; legacy countertop terminals stood side by side with tablet POS and mobile payment solutions.
20/20 hindsight, highlights
More than 10,000 attendees and 3,000 exhibitors from 75 countries attended Money20/20 Oct. 25 to 28. "Treat your badge like cash," registrants were told. "There will be absolutely no badge reprints allowed." Financial services professionals from mobile, retail, marketing services, data and technology met at what show organizers described as "the intersection of mobile, retail, marketing services, data and technology."
The conference agenda was aimed at distributing content across a diversified audience, highlighting the "disruptive ways in which consumers and businesses manage, spend and borrow money." To this end, each day's presentations were organized into different tracks. Following are predominant themes explored in concurrent sessions throughout the four-day event:
- Bill payments, financial services: Newly released market research provides insights into the future of household bill payments, millennials, and financial services including how to improve access to underbanked populations.
- POS, processing and open platforms: Executive roundtables with leading acquirers explored front-end and back-end technology and omnichannel commerce for small and midsize businesses.
- Alternative lending and credit: Financial analysts and leading executives from online marketplace lenders debated inherent challenges for alternative lenders, strategies for achieving sustainable growth while remaining vigilant to the changing regulatory landscape.
- Connected commerce and the mobile enterprise: The Internet of Things is changing the way that consumers interact with their environments. Analysts predict up to 30 billion interactive devices will be connected to the Internet by 2020, noting that many of these devices will be payment-enabled. A diverse group of payments industry stakeholders and technologists reviewed the role of emerging technologies in creating hyper-connected machines and mobile wallets.
- Marketing and customer experience: Most marketers agree that the era of demographic profiles and pull marketing is over. Retailers, card brands and information technology professionals looked at the customer experience in the digital world. They explored new marketing practices, trends in e-commerce and mobile commerce, and big data findings in other industries that may be useful to financial service companies. Panels of senior leaders from a range of industries addressed what they are doing to create great consumer experiences across complex enterprises.
- Payment card evolution: Payment card issuers, processors and network service providers analyzed the changing look, feel and role of payment cards in the greater ecosystem. Discussions ranged from card linking to the coolness factor of gift cards to how e-cards are expanding market opportunities.
- Mobile payments: Payments analysts reviewed Apple Pay a year after its launch and a range of other mobile wallet offerings, and they speculated on how third-party wallets will impact bank apps. JPMorgan Chase & Co. debuted Chase Pay, a new mobile wallet. The company is partnering with Merchant Customer Exchange (MCX), a growing consortium of retailers that collectively claim more than 100,000 retail locations.
Approximately 94,000 Chase customers will be able to load Chase-branded credit, debit and prepaid cards into Chase Pay and use the mobile wallet at merchant locations that accept MCX's CurrentC. The consumers will have the option of transacting with the Chase or CurrentC mobile app.
- Mobile banking: Banks are undergoing an incremental transformation as they learn to compete with nonbank lenders, balance cash management with digital currencies, and shift from local branches to online and mobile forms of banking. These topics were explored in depth in a number of panels.
- Regulatory landscape: Increased federal and state oversight has had a significant impact on the financial services sector. Experts presented a variety of topics related to state money transmitter licensing laws, alternative lending regulations, the Dodd-Frank Act's five-year reign, and recommendations on how to navigate the complex regulatory environment.
- Security: Security analysts made in-depth presentations on tokenization, end-to-end encryption, and secure methods of authentication designed to protect consumers, merchants and industry stakeholders from cybercriminals. Many agreed that EMV implementation in the United States will drive fraudsters to the card-not-present space. They discussed how EMV adoption has changed fraud patterns in other regions and offered examples of best practices geared toward identifying and preventing electronic payment fraud.
"As always, Money20/20 got us excited and made us feel even more certain that the years to come will be a turning point in the payments sector," said Yitz Mendlowitz, co-founder and Chief Executive Officer of PAAY. "And of course, with the recent shift to EMV, the entire conference confirmed that all the players are more interested than ever in finding innovative solutions for combating online fraud."
WSAA: think global, act regional
The theme of the 12th annual Western States Acquirers Association conference was "Stacking the Deck for Success: Play your hand in the future of payments." The not-for-profit, non-membership organization was established in 2003 with a goal of educating the acquiring community.
The Oct. 28 opening reception, held at the M Resort in Henderson, Nev., immediately after Money20/20, drew a record 800 attendees. An equally high number attended break-out sessions the following day addressing a range of issues, including:
- Payments, compliance and industry trends: Electronic Transactions Association CEO Jason Oxman presented a range of regulatory and compliance issues impacting payments. "Everything is changing, which is good for us because we work for companies that are innovative and focused on what's best for the customer," he said. "The definition of a payment company has changed over the past few years, and we're all trying to figure out what these changes mean for our companies."
- Globalization of e-commerce payments: Global online trade is growing, accounting for more than $1.5 trillion in 2014. Patrick Huynh, Head of the GlobalOne division of Pivotal Payments, presented the latest news on global acquiring opportunities, challenges and benefits.
- The technology bet: A panel of experts moderated by Xavier Ayala, Managing Partner and CEO of oneSOURCE Business Advisors LLC and President of WSAA, explored how payment technology innovation is shaping the merchant and consumer experience, particularly in the areas of loyalty, big data and omnichannel shopping.
- Card brand discussion: Moderator Deborah Camm, Vice President Business Development at Merrick Bank, led a panel of experts that addressed how the card brands are working with acquirers to create value beyond interchange, rules and Payment Card Industry Data Security Standard compliance.
- EMV as an opportunity:M Julie Stull, General Manager of Integrated Payments at Discover Network moderated a panel of industry experts on how to educate merchants on the importance of adopting EMV technology. The panel was designed to provide merchant level salespeople with additional insight and resources to help them become more consultative with merchant partners.
- The ACH landscape: Payments executive Steve Eazell discussed the nuances of the automated clearing house (ACH) landscape with John M. Curtis, Senior Vice President of Education and Training at WesPay. They explored how changing rules and requirements are impacting financial institutions and their business clients. They also looked at the risks and opportunities associated with increased ACH adoption.
- ISVs – it pays to play: Ken Elderts, Vice President ISO Sales at AnywhereCommerce, moderated a panel that looked at how changing market conditions, competition and end-user requirements are changing the payments landscape, making it more challenging to meet service levels, contain costs and refresh obsolete technology. Independent software vendors can fulfill these needs and help their ISO partners deliver intelligent and timely solutions.
The mobile payments revolution
Derek Francom, Director of In-Store Payments Strategy, Operations and Go-to-Market at PayPal Inc., delivered the final keynote presentation at WSAA. He presented an overview of payments' fast-approaching future. "The payments industry is operating in chaos with old legacy hardware," he said. "It's time to plug into the mobile payments revolution and take advantage of what's to come."
He went on to say that smartphone usage is on the rise, with 220 million consumers in the United States expected to use smartphones by 2018, a trend mostly driven by millennials, who are already using their phones to make in-store payments. "Last year, PayPal processed $1 billion in mobile payment transactions," he said.
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