Card Based Receivables Management Current Priorities for the Merchant Community. September 10, 2013. Presented by: Keith P. Olson Director, Business Development. Ecosystem Priorities and Trends. Business to Consumer Enterprises (B2C). Separated into two swim lanes….
September 10, 2013
Keith P. Olson
Director, Business Development
Business to Consumer Enterprises
Separated into two swim lanes…
Business to Business Enterprises
Retailers increasingly engage Omni Channel distribution and the multi-channel consumers have proved to be more profitable
Source: Retail Systems Research (June 2013)
Omni Channel consistent experience
Case study: Many leading retailers have benefited from their Omni Channel strategy and shared their experience
Walgreens found that its Omni channel shoppers spend more than its single-channel shoppers
Stores + Web
Stores + Web + Mobile
Source: Miguel, Almeida, VP of ecommerce at Walgreens at a session at Retails’ Big Show 2013, sponsored by the National Retail Federation
Capitalize on driving more sales through and steer consumer payment options
to desired state.
Mobile Technology consistent experience
*Source: RIS News Custom Research, Retail Embraces Tablets, January 2012
† Mobile POS Grows to $2 Billion Market in North America, But Retailers Are Separating Hype From
Reality, According to New IHL Report, pymnts.com, May 2013
Banks are motivated to invest
Mobile Wallet Race consistent experience
In the news today
…while New Participants are Entering the Payments Value Chain.
In August 2012, more than a dozen large retails announced their intentions to create a private ‘mobile payments network’ called Merchant Exchange Network (MCX).
MCX is intention to complete with or replace the open-loop mobile networks run by Visa, MasterCard, AMEX and Discover.
Since its inception, MCX has steadily grown its membership, which now stands at over 37 US National Retailers. Many of the Canadian merchants are looking at MCX too. They were present at the last ACT meeting in NF, ON.
While MCX focus is on expense management, ownership of customer sales data is the #1 priority
Mobile Technology for Local Merchants
1 – App Store Downloads – Gartner Research (2011 / 12) via Statistica (Link – WEB)
2 – Financial Post November 2010 (Link – WEB)
3 – GigaOM Mobilize 2012 (Link – WEB)
The number of purchases made through mobile applications will grow at an increasing rate, exceeding those made through traditional PCs within 5 years.
Consumers Buying with Mobile Devices
1 – Emarketer Research (http://www.emarketer.com/Article/More-Shoppers-Reach-Mobile-Browse-Buy/1009615)
2 – Gartner Research via Techcrunch Article (http://techcrunch.com/2013/04/04/gartner-2012-2017-devices-forecast/)
Leveraging Mobile Devices while “Idle or In-Transit” will grow at an increasing rate, exceeding those made through traditional PCs within 5 years.
Source: Comscore Mobile Future in Focus Report
24% will grow at an increasing rate, exceeding those made through traditional PCs within 5 years.
% represents Mcommerce (Smartphone and Tablets)
U.S. Consumer Usage of Mobile Devices
…SMB’s use apps to save time and increase productivity4
4 – Saving Time and Money with Mobile Apps - Small Business and Entrepreneurship Council (SBE Council – 2011 Report) (Link – PDF)
5 – The ABC's Of SMB Transformation: Apps, Broadband, And The Cloud – 2013 Chetan Sharma Consulting on behalf of AT&T (LINK: PDF)
Data Security will grow at an increasing rate, exceeding those made through traditional PCs within 5 years.
EMV and NFC will grow at an increasing rate, exceeding those made through traditional PCs within 5 years.
In Canada, Visa incented the acquirers to convert their systems, POS hardware, customers, and VARs and ISPs partners to EMV through a 10 bps reduction in interchange costs for EMV transactions.
As a result of the incentive, coupled with a strong commitment by the banks and other Networks to support EMV adoption, it took Canada less than 5 years to achieve over 70% EMV enablement at the merchant level, which continues to grow.
As outlined in a recent White Paper issued by TSYS, the US experience and situation is vastly different.
As outlined in the report, the complexities and conflicts in the U.S. payment ecosystem continue to cause paralysis for widespread EMV enablement. These include:
Economic interests are disconnected; risk for issuer decreased, no interchange decrease to merchants to offset hardware CAPX
Vast number of acquirers and issuers
PIN Networks lack of defined EMV specifications
Durbin requirements of merchant driven routing challenge
Cost of replacement card issuance (est. $3B) and POS hardware
Plethora of middleware providers
Merchant owned hardware
There is a high likelihood, the counterfeit liability shift scheduled in the U.S. for Oct., 2015 will be pushed back, as it was in Canada on two occasions. Without the exposure of non-U.S. issuers and associated losses they experience through card data theft and usage of counterfeit cards within the U.S. mag stripe environment there would be no force to enable EMV.US merchants' conversion to EMV will diverge from Canadian conversion rates
And the naysayers remain vocal…
“The U.S. is going to adopt EMV in about the same way the U.S. adopted the metric system — somewhere between kicking and screaming and not at all.”
Forrester Research Group
EMV and NFC