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Transformational payments solutions:In a bid to further enhance its omnichannel offerings, Ant Financial, Alibaba’s financial services arm, recently launched a smart payment hardware called Alipay Box for physical stores. The Box integrates barcode scanning and facial recognition to allow customers to easily authenticate themselves at checkout for making payments with Alipay. The plug-and-play hardware requires no additional integrations from merchants. It is aimed at boosting checkout efficiency and enhancing customer experience by facilitating a seamless authentication and payments transaction process. Source: Shine |
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Regulatory landscape: EMVCo. recently updated its 3-D Secure Standard for card-not-present (CNP) transactions by launching v2.2.0. The 3-D Secure Standard is used by merchants to help customers authenticate themselves with their card issuers in a frictionless manner while making CNP purchases. The changes in the updated version are twofold: (1) enhanced communication between merchants and issuers to better address exemptions under Europe’s Second Payment Services Directive (PSD2) regulation, and (2) better authentication for mail orders and telephone orders (MOTOs) even if a customer is offline.Source: EMVCo. |
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Customers’ evolving expectations: Barclays has introduced a feature in its banking app that allows debit cardholders in the UK to select the types of merchants where their card can be used. This move is in line with the broader trend of payments providers looking to offer greater flexibility and control to customers. Using the new feature, customers can restrict the usage of their card across different Merchant Category Codes (MCCs) such as grocery stores and supermarkets, restaurants, gas stations and gambling sites, among others. Barclays will automatically decline transactions in those MCCs that are “turned off”. A key use case is to aid vulnerable customers such as those who are addicted to gambling. Customers can also proactively manage fraud at higher-risk merchants such as gas stations.Source: BBC |
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Data:According to the 2018 True Cost of Fraud study for the e-commerce sector released by LexisNexis, mid-to-large size merchants bear $3.20 in fraud-related costs for every $1 of fraud. These costs include chargeback fees, costs for replacing products and labor costs for employees, among others. In a separate Fraud Mitigation Study conducted by LexisNexis, merchants noted identity theft, falsified claims, and data breaches as their top three fraud concerns with 47%, 42% and 37% of them expressing concerns about these respectively. 84% of survey respondents expressed willingness to participate in a centralized cross-industry database to combat fraud. Source: LexisNexis and PR Newswire |
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New providers: Square announced plans to re-apply for a banking license with U.S. state and federal regulators. If a license is granted, the new Square Financial Services unit will primarily offer deposit services and loans to smaller merchants. Square currently lends to merchants via Square Capital which partners with a financial institution. The ability to accept deposits with a prospective banking license will offer Square the flexibility to move beyond its initial areas of focus and offer additional types of loans and services to merchants in the future.Source: Reuters |
PARTNERSHIP SPOTLIGHT
- UK-based coffee chain Costa Coffee has partnered with Barclays to embed payments into reusable coffee cups.
The ‘Clever Cup’ comes with an embedded Barclaycard contactless payment chip and can be used for ‘tap-and-go’ payments
The cups can be used by customers to pay at any location where contactless payments are accepted, including at transit turnstiles
Customers can top-up their cup with additional money using Barclay’s bPay app
Source: Business Insider
Klarna is extending its partnership with Shopify by becoming one of the first payment service providers to join the Shopify Plus Partner Program targeted at high-growth merchants.
With this integration, merchants in the US, UK and Germany on the Shopify Plus platform can accept Klarna’s suite of payments products and solutions
Klarna expects its point-of-sale financing options to benefit high-ticket merchants by driving conversion and higher basket sizes, while Klarna manages the credit and fraud risks on those transactions
Source: Klarna
MERCHANT SPOTLIGHT
- To further streamline the omni-channel purchase experience, Walmart recently announced an option for in-store shoppers to order and pay for online orders conveniently.
Walmart associates will have access to a new app to help in-store customers find and order items online and have them shipped either to their home or to the store
Customers can pay for their online orders either directly to the associate or at the register in case they have other in-store purchases
As customers can also pay with cash, Walmart expects this move to attract more underbanked customers since they can now purchase items that are not immediately available in-store
Source: TechCrunch
7-Eleven has launched an unmanned store in Japan which relies on facial recognition and integrated payments.
The pilot store is currently available only to employees of 7-Eleven’s partner NEC Corp. which authenticates customers as they enter the store by checking against pre-registered facial images of employees
During checkout, once all the barcodes on the products are scanned, payment is automatically debited from the salaries of the employees
Source: Japan Times
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.
