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MPE 2019, FEB 19-21 in BERLIN

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MPE 2013 summary

Brief information

The market of nowadays offers numerous opportunities but at the same time it may be very challenging to thrive in a disruptive environment it creates.

Event in numbers
  • Attendees: 432
  • Speakers: 70
  • Sponsors: 19
  • Exhibitors: 20

Summary

If you attended the MPE 2013, we believe that the interaction, which was one of our key priorities, served you well and that you established a lot of new contacts and reunited with the older ones...

We are excited to say that that there is a lot happening in the area of merchant payments. The market of nowadays offers numerous opportunities but at the same time it may be very challenging to thrive in a disruptive environment it creates.

You can get lost easily in the endless list of payment innovations but it is important to listen carefully and to distinguish between hype and reality.
MPE 2013 reserved more space for thought-provoking discussions, industry announcements, start-ups & innovators showcases, exploration of new trends in dedicated workshops, increased networking opportunities, and overall interaction in extended exhibition space…

Also, the traditional MPE „Guiding Hand“ statuette gained a new form and vision, represented by a new, renowned artist. The list of Awards categories was enriched by a new one, called "Startup Payment Innovator", to recognize the best of the best in the payment start-up arena…

We are looking forward to seeing you in Berlin next year again!

The team of Empiria.

Chairmen summaries

Remarks on Conference Day 1 by Roger K Alexander, Director, Accourt

Roger joined Greenings International in September 2008 as Chairman and Head of their Cards & Payments Practice. Most recently he was European President for Elavon Merchant Services and previously CEO of Switch Card Services following a distinguished career at Barclays. Roger is working closely with the founder, Andrew Greening, to build the brand and consultant group around the world as well as investigating complementary services for talent development and innovation. Roger brings the strategic insight and leadership necessary to ensure Greenings continues to deliver value to clients through exceptional people. Few leaders can match his knowledge and experience in the payment industry - combine this with his deep and genuine concern for nurturing and developing people and he makes a great addition to the team! He currently holds a number of non-executive and advisory roles, including Accourt, Caxton FX, Greenings International and The Logic Group in the UK as well as Pensio in Denmark; Roger is also acts as an Advisor to the Private Equity sector’. Roger lives with his wife and family in Northamptonshire. Roger is a member of the Advisory Board for the Merchant Payments Ecosystem 2013.

Foreword

„Welcome to MPE 2013 for what, I am sure, will be another interesting, informative and thought provoking conference. Those of you who have attended previous conferences will notice that we have had to change the venue because of the continued success of this unique event; those attending for the first time will understand why this conference is so successful over the next 3 days.

In this ever changing world we live in it is clear that we must adapt to change whether in a business or personal context; the rate of change in the area that we are all privileged to work in continues to exceed all expectations and it is becoming more and more difficult to maintain a level of understanding that enables us to make and take those critical decisions regarding corporate strategy in a timely manner.

Participation in this conference is an excellent way to find out what’s going on and how that might affect your business; I use the word ‘participation’ with a request that you truly do participate by your attendance and interaction during the formal sessions and also by networking during the breaks and social activities. Learning is iterative; the interaction during the Q and A sessions are your opportunity to explore issues at a more detailed and to test the speakers and panellists – reviewing those sessions in a more informal environment is also a key part of the learning process as the alumni of pervious MPE events can confirm.

The format of MPE continues to evolve and this year is no different. In addition to the change of venue, the team at Empiria have conjured up many innovations which will make this a great 3 days. Some of these changes will be obvious through the way this year’s programme has been developed to provide the focus that you have said you want through feedback in previous years; other changes will become apparent as we work through the conference.

Today’s focus is on Card Acquiring and Rich Merchant Services; to the best of my knowledge the term ‘Rich Merchant Services’ has not been used in this manner before and is worthy of further comment. This covers a new generation of services designed to improve the interaction with consumers and to streamline merchant business operations. Acquiring is no longer the extent of our business; we are gradually moving into the provision of ‘Merchant Services’ designed to add value to the Acquirer’s relationship with their customer base. Acquiring card transactions in essentially a commodity service and inherently all about volume; differentiation, and thus competitive advantage, will emanate from innovation around those value added elements of service which is what today’s agenda is all about.

I am privileged to have been in this business for many years and can remember those days where our transactions were based on paper sales vouchers (as they were known) which were either sent to the Acquirer in the post or lodged with a bank branch. We used ‘zip zap’ machines to capture the embossed data from cards and automation was unknown at the point of sale. Authorisations, over static floor limits, could be obtained by telephoning the local bank and any referral could lead to an extensive telephone conversation between the Acquirer (and/or Issuer) and the cardholder. The evolution to where we are has taken many years but the pace of change today is such that, to my mind, we are now seeing revolution in all aspects of the value chain based on the continuing innovation in technology on both sides of the Atlantic and, indeed, the Far East. This is a technology business now and the winners in the next few years are those that will embrace technology from the point of sale (or should I say, the point of interaction) through to the backend and, fundamentally, through the interface and ongoing communication with the customer.

I am excited about the future and particularly the ability to learn more about the new opportunities that we will hear about during the next few days. I hope you share that excitement and trust that your attendance at MPE will be enjoyable and rewarding. Take every opportunity to network; challenge the Speakers (and the Chairmen!), challenge your peers but, above all challenge yourselves to optimise on this unique learning experience.

Onwards and upwards!“

Summary

„I was very pleased to have been involved in Day 1 which covered a large number and variety of topics within the theme of ‘Rich Merchant Services’. It is particularly difficult to summaries those proceedings so best to try and distil some thoughts that may be worth considering as part of the daily routine.

Regulation is an important aspect of our business; it is fundamental to existing players and also to those that strive to carve a niche within the payments value chain. We are too quick to attack regulation whether at the national, regional or global level but, conversely, are often slow to work on adding value to the regulatory processes. We were challenged by the European regulator to respond to their latest request for informed input on the Green Paper; if we don’t take the opportunity to do so we can hardly complain when new regulation is enacted.

One of the businesses with which I am associated recently discovered that they were out of step with the market in terms of their pricing model; it became apparent that the market had moved on to a different model but we had not! The merchant panel session provided an excellent insight into what our merchant customers need from banks, acquirers, PSPs and others providing services to them. It is probably the first rule of business that we should listen to our customers and give them what they want at a fair price and in an effective and efficient manner. We gained a lot from listening to 4 major European retailers and some of their steers need to be heeded. I was particularly taken with the supposition that we need to understand how to create value in a simple but effective way and in doing so we can enhance the service at the point of sale (or interaction) with the provision of ‘Rich Merchant Services’ that the customer wants – remember the 4 seconds to make a difference! Mobile was ever present in many of the presentations and panel discussions. However, I still have some issue with differentiating ‘eCommerce’ and ‘mCommerce’; to me using mobile for purchasing goods and/or services is purely ecommerce albeit using a different medium to effect that transaction. Yes, the input device is different and requires innovative security solutions but realistically we are still talking about eCommerce. Some years ago we used to talk about ‘tCommerce’ when TV was being promoted as a channel; this has disappeared although we are able to purchase through this medium – once again eCommerce by any other name. However, the key point for me is that whilst penetration of eCommerce is increasing it still represents less than 20% of total card payments and, as we know, cash is still universally the dominant payment method. The opportunities for eCommerce (using whatever medium) to create efficiencies and provide real customer choice is huge so let’s not get carried away with all the mobile debates before we have a mature eCommerce environment elsewhere.

I hope you enjoyed another great event in Berlin and look forward to meeting up with many of you at MPE 2014."

Roger K Alexander
Chairman of the first conference day


Remarks on Conference Day 2 (morning sessions) by Erik Hogenkamp, Founder, Paytect

Erik Hogenkamp started his career in payments at InterPay (Equens) where he was in charge of the relationships with Internet Payment Service Providers and the High-Risk merchant sectors when he was recruited by First Data in 2005. As a member of the founding management team of European Merchant Services he created and managed the eCommerce department (from scratch) including sales, support, product management & scheme compliance. This task included managing and translating the Card not Present business requirements into a new acquirer institution setup and transforming a domestic single brand acquirer to a Pan European, multi brand, cross border player. From 2008 until 2011 he was Director, Global Merchant Sales at First Data International. In this business development role he consulted to merchants and acquirers with complex, global cross border, multichannel needs in North America, Europe, Asia and Australia. After leaving First Data, he founded his own company, PAYTECT.

Foreword

„I feel privileged to have the opportunity to chair the morning sessions on Day 2 of the MPE 2013 as last year it has been proven that this 3 day event is the place to keep up to date on the latest developments in the merchant payments value chain. I was infected with the payments virus in 1999 when I started selling eCommerce acquiring including the SET protocol. Back then, we tried to explain that developments in the Card not Present channel went much faster compared with the traditional POS. But the rapid development pace is not exclusive to the CNP-channel anymore.

On the morning sessions on Day 2 we will cover eCommerce and Interaction Beyond Payments. We start with insights on one of the BRIC countries: although the nearest to Europe, yet so different in payment behaviour.

When you started to think the role of the PSP is clear, you should pay attention today when we have presentations from an acquirer with integrated PSP services and a PSP with integrated acquiring services covering the latest trends and the convergence of channels.

We tend to think of our services and capabilities in the context of a channel but consumers do not.

To enable services up to the consumer expectations, of the integrated shopping experience, will be challenging for the whole merchant payment value chain and will again create opportunities and threats to our industry. What payment methods will be able to follow these cross-channel demands and are online- and/or NFC-wallets the future or todays reality?

Sometimes we are so busy with our internal challenges or are simply not in a merchant facing role that we don’t know how merchants perceive our products or services. Fortunately we can get the view from a global merchant, who will share their barriers and opportunities on Cross-border eCommerce.

The MPE is not an event to just sit back and listen, you will be encouraged to raise questions and I am particularly looking forward to the panel discussions on e.g. card acquiring for PSPs , the potential of alternative payment methods not only for online or mobile, but also in the bricks & mortar POS environment. The participants are representing the whole ecosystem from merchants, PSPs, acquirers and an Interbank processor.

One size fits all payment solutions don’t exist, the same applies to payment methods. Some (alternative) payment methods are fit for specific merchant sectors or regions, but can cause complex challenges to merchants relating to multiple integrations & relationships, hidden costs, reconciliation or funding streams. This and more merchant insights will be covered in Session 2, followed by a panel discussion with several global merchants.

Last but not least, NEW in 2013, we finish the morning with a creative session on Interaction Beyond Payments. Cross-channel retail interaction with connected consumers.

The Empiria Group did a great job to create such a promising second conference day and I hope you all will be inspired or at least triggered by the topics and insights of the MPE 2013.“

Summary

"We’ve started the morning sessions of Day 2 with insights of the Russian market. Europe’s largest Internet audience with still a huge growth potential. A country where Cash is King: eCommerce payment behavior largely depends on Cash on delivery, Cash collection by post offices or electronic terminals. Card usage is for 85% related to Cash withdrawals. What a contrast with Turkey, the youngest population in Europe and among the top 3 in number of cards & POS in Europe. For this market the Interbank processor introduced last year the BKM express, the national digital wallet platform, free of charge for both consumer and merchant. The buzzwords for this year are Omni-channel, Cross-channel or Universal commerce. The interaction beyond payments with the 24/7 connected consumers will bring additional opportunities and threats to our industry and although we all strive, it’s not at all clear who in the merchant payments value chain will succeed in reducing complexity for merchants. I learned that next to Social-commerce even Subway-commerce has been introduced; customers shop for groceries in the subway and have them delivered within hours. We had a great merchant panel consisting of two multi-channel global fashion merchants and two online gaming merchants who were willing to share their cross-border barriers, challenges and opportunities with regards to payments. Their message was clear; although they also see the convergence of channels tomorrow, there is still room for our industry to reduce the complexity of eCommerce payments today.

Looking forward to see you all next year.“

Erik Hogenkamp
Chairman of the second conference day (morning sessions)


Remarks on Conference Day 2 (afternoon sessions) by Neira Jones, Head of Payment Security, Barclaycard

With more than 20 years in financial services, Neira has directed many global change programmes, launched new products/services and managed process reengineering practices. She believes in change through innovation, team work and collaborative partnerships to generate both top-line growth & bottom-line profit. Neira particularly enjoys business turnaround initiatives and anything compelling in the digital space. Currently Head of Payment Security at Barclaycard, she is responsible for security compliance & risk management of circa 100K customers & 3rd parties, including PCI DSS. She enjoys public speaking and blogging and is regularly invited to speak to various audiences across industries & regions. She is the proud recipient of the SC Magazine Information Security Person of the Year Award 2012, was inducted to the Infosecurity Europe 2011 Hall of Fame and was voted on the top 10 most influential people in information security by SC Magazine & ISC2 in 2010. She has been on the PCI Security Standards Council Board of Advisors since 2009 & has recently been appointed Senior Vice President, Cybercrime for the Centre for Strategic Cyberspace + Security Science. Her Payment Security Team in GPA won the prestigious SC Magazine Award for Information Security Team of the Year in 2012 & 2011 and two Merchant Payments Ecosystem awards in February 2012, as well as the 2010 European Card Acquiring Forum (ECAF) award for Data Security (PCI DSS).

Foreword

Security, Trust and Innovation

„Looking back at the 2012 Verizon Data Breach Investigation report, you will have noticed a slight change in the nature of data breaches we have experienced in the past year:

  • Payment card information represented 48% of all breaches in 2011, but unlike previous years, it was not a runaway winner
  • Whilst payment cards retained the title of “most stolen”, the dubious honour of “largest hauls” now firmly belongs to other types of personal information, including name, e-mail, national ID, etc. (95%)

There was a notable 36% increase in the number of recorded data breaches experienced in 2012 over the previous year

The report also noted that 84% of breached organisations didn’t detect the breach themselves. It all comes down to basic security lapses, negligence and common sense and this is not different from what we have observed over the past four years.

We have however noticed an interesting change in the last year, as summarised in a recent Symantec survey:

Summary

„On 19th February, David Cameron announced a cybersecurity partnership with India aimed at protecting the personal data of millions of British households that is stored in Indian call-centres and data centres. Undeniably, cybersecurity is on everyone’s agenda, it is therefore not surprising that Session 4 & 5 of Day 2 of MPE, respectively entitled “Merchants’ Insights: CNP Security & Trust” and “Trust, Security & Innovation” proved so interesting. With contributions from Just a Game, Ogone, Skrill, Trustwave and Barclaycard, the discussions and presentations centered on security and its potential to become an enabler for innovation for merchants and service providers alike. Looking at the fraud and threat landscape and the payments market growth, the discussion inevitably came to mobile payments, wallets and social media, with an emphasis on risk management and its careful application to the various industry sectors. With laws and regulations becoming increasingly tougher, innovators would do well to make customer trust, and therefore security, a part of their growth strategy. Let’s revisit the landscape in 2014 and see if any of our predictions came true.“

Neira Jones
Chairman of the second conference day (afternoon sessions)


Remarks on Conference Day 2 (innovator zone - evening session) by Eric Grover, Principal, Intrepid Ventures

Eric Grover is a Principal at Intrepid Ventures, providing corporate development and strategy consulting to private and public financial services, processing, technology and payment network businesses, principally in North America and Europe. He has a comprehensive understanding of the global payment network, processing and credit card landscape. Mr. Grover is a renowned expert on the electronic payments space with high-level understanding of each node within the industry value chain including credit issuing, payment networks, acquiring, processing, and end-consumer value propositions. He was one of the first to publicly make the case for banks to demutualize MasterCard and Visa. Mr. Grover is the world's foremost independent authority on interchange, its economics and regulation. His prior experience includes Visa International, GE Consumer Finance, Bank of America, NationsBank and Transamerica. Mr. Grover currently serves on the board of Nordstrom's credit card subsidiary. He has over 25 years of experience in the financial services space and his commentaries have been frequently published in the American Banker, Cards International, the Daily Deal, Digital Transactions, Credit Card Management, Cards & Payments, Card Technology, Cards Insider, and the Washington Times. Mr. Grover is a frequent speaker on card payment networks, payment processing, credit, debit and prepay payment businesses, and government's increasing role in the payments industry.

Summary

„Eric set the stage, discussing payment opportunities and challenges across the value chain, highlighting favorable conditions for the recent explosion in innovation in and around payment acceptance, and the unprecedented wave of new payments ventures challenging and enriching the industry. Christian Thaler-Wolski (Wellington Partners) and Rouven Dresselhaus (Capnamic Ventures) spoke to the burgeoning opportunity to put venture capital to work in payments. Five promising payments startups presented their stories. Birdback is a fascinating venture enabling businesses other than the issuer to directly deliver rewards and benefits to general-purpose cardholders. PSP SumUp, sometimes characterized as a Square clone, is in the thick of the land rush, providing mobile-phone-based payment card acceptance, and is piloting a digital wallet. PSP Paymill has a different focus, similar to Stripely, it provides e-commerce payments acceptance, competing with dead-simple integration, transparent pricing and rapid underwriting and boarding. Payworks delivers a mobile payments platform for financial institutions and mobile-phone operators, accelerating their ability to deploy mobile payments products. Synqera enables real-time marketing to consumers during wait-time at checkout, which if it gets traction, is revolutionary."

Eric Grover
Chairman of the second conference day (innovator zone – evening session)


Remarks on Conference Day 3 by Alex Rolfe, Managing Director, PaymentsCM (Payments Cards and Mobile Mobile; Mobile Payments World)

Alexander Rolfe is the Managing Director of Payments Cards and Mobile (PCM). He is the publisher of European Payments Card Yearbooks and Eurasian Payments Card Yearbooks, Mobile Payments World and Payments Cards and Mobile. Alexander is also a Director at Mobile Payments Consulting. He has been in the publishing business for 16 years and has been involved in m-payments consultancy for 12 years. PCM, as well as publishing industry magazines, provides PR, Research and Consulting services specifically for the Payments industry. Alexander Rolfe graduated from Manchester University in 2000. After a period of time with Guardian Media Group he was taken into employment by European Card Review – Europe’s leading payments magazine – as the m-commerce editor. In May 2002 he acquired the company, incorporated several smaller magazines, rebranded it as Payments Cards and Mobile and is now the Managing Director. PaymentsCM offers a niche portfolio of services for the Payments Card and Mobile Payments industries. With a 16 year heritage in the industry we are ideally positioned to help drive small, medium and large companies to achieve focussed goals within the Payments Card and Mobile Payments industries.

Foreword

As 2013 grinds through the industrial gears and gets up to speed we are already seeing the same type of headlines assaulting us as our daily news hits the mail servers: “2013 – the year of the mobile wallet”, “Mobile banking users to exceed 1 billion”, “NFC to account for half of Europe’s mobile payments”, and of course, my personal favourite, “End of the line for cash”.

For my part, I look less for the glossy head turners and more towards the subtle quiet movers who are just getting on with positioning their businesses steadily to match what the consumer has already told us in thousands of consumer studies – consumers want convenience.

Let me be clear. This does not mean that consumers WANT mobile payments. However, if making a payment through or via a mobile phone is more convenient, saves them time, adds value to the check out experience – whether online or in a physical location – then the consumer wants it.

One of the major issues we have, and this is well documented, is the slow moving incumbents – whether that is in the payments arena or the mobile telephony arena. They have not all been deliberately slow to be obtuse. These are massive, multinational, listed companies which do take years to force change of policy through while wrestling with the objectives of their current business.

What is less documented, but equally distracting in my view, is that in 2012 in the USA alone there were just over 500 venture capitalist backed m-commerce/payments start ups alone. Now take that and add in the UK, France, Italy, Germany etc., etc. We are working our way towards thousands...in just one year! Each of these has its own “unique” offering, sometimes true, sometimes not.

The effect this explosion of choice has is to slow decisions. It is a fact now that some retailers are turning their backs on Contactless/NFC – they simply do not see the long term business case versus the myriad of other options that are available to them with less investment and what they see as less risk. Others are simply adopting a wait and see attitude.

Contactless is just one example I have used here but frankly we could shine the light anywhere. Mobile POS, bridging technology, wallets...literally hundreds of companies either in the space or clamouring to get in.

It’s ruthless, brutal, fascinating - its high stakes at the table and nobody knows where or who the winner will be.

From my perspective, the payments industry in 2013 is fantastically interesting, and I do hope that this conference goes some way to helping you navigate your way through turbulent waters.

Summary

„After a fantastic night at the awards it was great to see the room fill up as we got started on the Mobile Payments day. The outcome of day three was particularly interesting as we were able to clearly see a number of strong similarities between products launched in different regions. The mobile wallet is one such product that has been successfully launched in both Germany and Turkey and whilst the products have been generally well received they still lack mass adoption by both consumers and the merchants. This could be, as is often argued, down to the handset manufacturers not enabling NFC as readily as the industry had hoped, but it also seems to me that the level of complexity for both consumer and merchant has moved ahead quite quickly. To explain – the amount of services offered in the wallet are now so great that I am sure that the consumer has trouble to understand the product, Geolocation, opt-in offers, loyalty, NFC, barcode, QR code are all offered – but how, when and where does the consumer use the different use cases for payment or access? As for the merchant the complexity to serve and integrate all of these channels at POS ha just got exponentially greater. The challenge, for me, is not to keep increasing the numbers of VAS in the wallet but to simplify it for use by both merchant and consumer."

Alex Rolfe
Chairman of the third conference day

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