Payments partnerships spur rebound from COVID-19 lows

The Merchant Payments Digest is a regular update from Oliver Wyman to keep merchants apprised of developments in the rapidly shifting payments space.

PAYMENTS SPOTLIGHT

Transformational Payments Solutions:

With COVID-19 pushing consumers to seek out flexible payment options, providers are increasingly looking to buy-now-pay-later (BNPL) solutions to cater to this need. Recently Mastercard announced a partnership with TSYS to offer split payments pre-, post-, or at checkout. Mastercard also supports point-of-sale (POS) financing in-store and online with Vyze, Fly Now Pay Later, and QuadPay. Fiserv is also now offering BNPL financing options to its merchant clients that use its processing platform. Similarly, PayPal announced "Pay in 4", where US consumers can make four, interest-free installments over a six-week period for purchases ranging between $30 to $600.

Source: Mastercard, Fiserv, and PayPal

Rules and Standards:

American Express, Discover, Mastercard, and Visa who together launched a simplified online checkout solution branded Click to Pay in the US have now announced plans to expand globally. Based on the EMV Secure Remote Commerce (SRC) industry standard, the objective of the solution is to facilitate interoperability and a consistent experience for digital payments. Technical preparations are underway for each network as they work with payments service providers, gateways, and acquirers to expand to Australia, Brazil, Canada, Mexico, Singapore, and the United Kingdom, among other markets.

Source: Business Wire

Customers’ Evolving Expectations:

COVID-19 has rapidly transformed consumers’ payment habits, forcing merchants to adapt quickly. According to Visa’s Back to Business Study, about four in five consumers (78 percent) have made changes to the way they pay for goods and services, including the use of contactless payments. Nearly half the consumers surveyed globally (48 percent) indicated that they would not patronize merchants that only support payment methods that require contact with a cashier or other shared device such as a POS card reader.

Source: Visa

Data:

ING is piloting a tokenized bank account based payment service. Using this offering, consumers can pay directly from their bank accounts for online purchases, without the account credentials and other sensitive data being shared with merchants. Once a customer consents, unique tokens are assigned for every merchant that a customer shops at, which can also be used for repeat purchases and subscription payments. Customers can control the tokens either on ING’s banking app or the merchant’s app. Ahold Delhaize, the supermarket chain is participating in the pilot with ING.

Source: NFC World

New Providers:

Facebook is creating Facebook Financial to pursue payments and commerce opportunities. Facebook Financial’s objectives will be to bring together all of the payments offerings to support contextual commerce across the Messenger, WhatsApp, and Instagram applications.

Source: Bloomberg

PARTNERSHIP SPOTLIGHT

Walmart is partnering with Paymentus to enhance the bill payment experience for consumers in store and on its app. Paymentus supports instant payments via cash, debit card, and digital wallets across multiple channels including web, mobile, IVR, text, email, chat, voice assistant, POS, and agent assisted channels. PayPal and Amazon have also partnered with Paymentus for bill payments.

Source: Yahoo Finance

Wayfair is launching a private label and co-brand credit card in partnership with Citi Retail Services. Both cards will offer cashback rewards of five percent or financing up to 60 months on eligible Wayfair purchases, in addition to rewards ranging from one percent to three percent for off-us purchases on the co-brand card.

Source: Citi

MERCHANT SPOTLIGHT

Pay-at-pump using Amazon’s Alexa is now live at over 11,500 ExxonMobil gas stations in the US. By saying “Alexa, pay for gas”, customers can trigger the payments process, which is facilitated by Amazon Pay, using the stored credentials on their Amazon account. Amazon has collaborated with Fiserv to activate the pump and to ensure a secure payment experience using tokens. The capability is currently available across Alexa-enabled devices such as Echo, in Alexa-enabled vehicles, and through iOS and Android versions of the Alexa app.

Source: TechCrunch

Oliver Wyman is a global leader in management consulting with offices in 60 cities across 29 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, Rob Mau, or Rick Oxenhandler 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.