„As I already elaborated in my introduction at the second day of the conference, some of the presentations and discussions increased my conviction that the stakeholders of the payments industry need to carefully consider the future. The debate around the Commission’s ‘Green Paper’, the criticism about the perceived lack of competition and lack of transparency, the continuous debate about the true costs of the various means of payment, all leave me with the feeling that having open and unbiased discussions between the various stakeholders is an absolute necessity. In a few countries, such as Norway and the Netherlands, discussions between retailers, banks, government and controlling instances, have led to higher use of electronic payments and a better understanding of the costs of each payment alternative throughout the value chain. If we do not have a similar debate at European level, this industry risks of becoming more and more controlled and legislated to the point that neither the necessary investments nor the financial rewards will be safeguarded. Payments as an industry should not become a commodity!
The second day of the MPE conference, started with a number of solid presentations around fraud and security issues. Impressive as the content of the presentations was, it still felt as if this is an ongoing ‘chase’ whereby organized crime has more means than the industry. As the fight continues, the overall costs of the actual fraud , the missed business for the retailers and the costs at each point in the chain (retailers, PSP’s, processors, payment schemes, call centers, software developers, etc…) is growing and staggering. I wonder what we can do to bring this overall cost down? What mobile and NFC will do to the business case? Actually, it is most likely that these only add up to the costs and the business case becomes as elusive as it was for smart cards in the nineties.
Later on in the day, we were presented an interesting development made by the EBA. Technically a very logical solution which should allow customers of the banks to link into their current account for payments on the internet. At national level similar solutions have proven to be successful and loved by the end customer. It is not a guarantee though that the same customers will also want to use a similar solution for their international payments and, most importantly, it also needs a business case approach! This being said, no doubt that, if well executed, such a product concept could bring down fraud levels and costs. I wonder why none of the schemes is coming up with a solution: they know how to support banks in creating a new and meaningful product and have all the scheme knowledge available. It is only about adding a layer of technology to already existing infrastructure and develop the necessary scheme rules.
I was most intrigued by the presentations around ‘social media’. On the one hand, it shows how the consumer of today is willing to share his whereabouts through all sorts of applications, yet on the other hand this is hardly aligned with our genuine desire for privacy. Some of these developments may not be ‘mainstream’ today, but they clearly show the disaggregation of the industry and the fact in future even more than now, it is impossible for anyone to control the whole value chain. The last part of the conference around payment strategies for e-payment illustrated what various players, such as banks, technology providers, retail customers, airlines, expect and/or are doing to further develop the market. It shows that exponential growth in e-payments is definitely expected, that there are lots of opportunities to improve today’s services and service levels and that the role of technology remains important but is only one aspect of how to ensure that the demands of the retailer (any retailer) and the customers are met.
All in all, a most interesting day, illustrating the challenges and opportunities of an ever exciting industry.“
Chris De Smet
Chairman of the second conference day