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Transformational payments solutions:Mastercard plans to release a new app that will allow cardholders to pay using the points or miles they collect from card, airline, hotel or retail rewards programs at any Mastercard merchant worldwide that have signed up for the service. The Pay with Rewards Service which will be relaunched at the end of this year comes with no additional fees or software updates for merchants. The app can also be integrated into a merchant’s or bank’s existing app. With the service, cardholders can track and choose to pay with points both before they make a transaction and after their purchase is complete. Source: Forbes and Mastercard |
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Regulatory landscape: With the Secure Remote Commerce (SRC) initiative set to make its first appearance in the second half of 2019, EMVCo, recently released a draft of its proposed SRC standard for comments from merchants, processors, and card issuers. The initiative aims to provide a standard foundation that will enable the processing of e-commerce transactions in a consistent, streamlined fashion across a variety of digital channels and platforms. Some payments executives have questioned the intricacies of the new system and some merchants have expressed concerns on the impact that SRC could have on their continued access to lower-cost PIN-debit networks. However, Mastercard CEO Ajay Banga has continued to show his support and optimism for the initiative and its ability to solve key payments pain points with e-commerce.Source: Business Wire and Digital Transactions |
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Customers’ evolving expectations: According to Worldpay, contactless payments have become the most popular payment type for in-store card transactions in the UK after seeing a 30% growth from last year. The switchover happened in June when 51% of in-store card transactions were completed using contactless payments. The strong growth of contactless payments in the UK has been attributed to a rapid rise in consumer adoption of mobile payments, higher spending limits (£30 today as compared to £20 previously), and increased merchant acceptance for contactless payments. Worldpay also reports that the use of mobile wallets increased by 114% during the first six months of 2018, with merchants in the fashion industry seeing the greatest shift from chip and PIN to contactless and mobile payments.Source: The Guardian and Sky News |
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Data:According to a joint report conducted by e-commerce fraud prevention company Riskified and cyber intelligence company IntSights, the number of false merchant websites being used to steal consumer credentials and data has gone up by ~300% since the fourth quarter of 2017. With merchants increasingly focused on driving sales through online channels and the staggering increase in phishing sites, Riskified and IntSights emphasize the need for merchants to have processes in place to take down malicious sites and deter fraudsters from compromising employee and customer information. Source: CNET |
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New providers: As the payments industry shifts toward faster money movement and with strong demand from small and medium-sized merchants, payment providers are realizing the value created by getting funds into merchant accounts instantly. Paysafe, a traditional payment services provider (PSP) has now entered the faster payments space by launching a program called “Accelerated Funding” that gives merchants the option to receive next-day, same-day, or express funding. Square was one of the earliest providers to offer an Instant Deposit feature that delivers funds to merchants within seconds, for an additional fee of 1% of the funding amount, over the regular transaction fees.Source: Digital Transactions |
PARTNERSHIP SPOTLIGHT
- Amazon is partnering with Western Union to launch a new payment option that will allow international shoppers to pay in person for their online purchases
Through the Western Union agent network, customers in select countries around the world will have the option to pay for their purchases in person and in their local currency
The new payment option will be visible on the checkout page and shoppers will be sent a code along with instructions on how to make the payment at a participating Western Union agent location
Western Union’s platform will also power the process for cash refunds on returned products
Source: Business Wire
American Express and PayPal announced an expanded strategic partnership to improve the digital payments experience for US American Express card members who use PayPal or Venmo
Through the partnership, Amex cardholders will have the option to: a) use loyalty points to make purchases at PayPal merchants online, b) send money and pay Amex bills with PayPal or Venmo balances, and c) easily add Amex cards to PayPal wallets directly from the Amex mobile app or website
The implementation of the partnership will take place over the course of 2019, with PayPal also planning to integrate with the American Express Token Service
Source: American Express and Tech Crunch
MERCHANT SPOTLIGHT
- McDonald's recently announced its partnership with Fleetcor Technologies Inc to provide Brazilian drive-through customers a new frictionless payment option
With the Sem Parar “voice payment system”, drive through customers will now have the option to complete transactions through voice by simply saying the phrase “I’m paying with Sem Parar”
The voice-activated payment solutions are expected to be installed in approximately 350 McDonald's drive-thru locations across Brazil
Source: Associated Press and Fleetcor Technologies
- Easy Jet, the European low-cost air carrier, recently released a feature on its app called Look&Book that allows users to find, book and pay for flights from their Instagram feed
The app leverages image-recognition technology to give consumers the ability to instantaneously search for and book flights when they see travel ideas on their feed
Based on the results of the image recognition search, the app pre-populates the booking form and allows users to see the nearest airports so that the customer journey from search to purchase is as seamless as possible
While the feature currently only includes bookings to Europe, Easy Jet plans to include other destinations soon
Source: Business Insider and The Independent
Oliver Wyman is a global leader in management consulting with offices in 50+ cities across nearly 30 countries. Our Payments practice works with constituents across the payments value chain to deliver insights with real impact, combining deep industry expertise with powerful consulting capabilities. To have a discussion with Oliver Wyman on your payments issues and opportunities, please contact Beth Costa or Rob Mau at payments@oliverwyman.com.
Note that Oliver Wyman believes the curated content to be reliable, but it has not been verified. As such, Oliver Wyman gives no warranty as to the accuracy of such information. Oliver Wyman’s curation of such content should not be interpreted as an endorsement of the organizations that published the content.
