Top challenges of the global acquiring industry

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We enjoyed attending the Global Acquiring Conference (GAC), in London, May 5-7.

The conference brought forward many interesting insights for the acquiring world, which we’re always looking to share with the industry.

As the innovation and fintech hub in Europe, London offered the perfect stage for a CEO audience targeting strategic issues and looking to work together for the growth of the whole acquiring industry. We were joined by card schemes, the main acquirers, innovators and providers around the world, which ensured an inspiring dialogue during GAC London’s discussions and panels.

How global is global acquiring today? 

Mary Gerdts, CEO Post Integration, debated the very nature of global in the acquiring landscape, arguing that from a regulatory perspective, there are regions all over the world that prohibit players from actually becoming global acquirers.

“For global merchants, we cannot fulfil their needs of global acquiring because we are prohibited from going outside borders and doing true global acquiring. So until the industry catches up with the way e-commerce is conducted today and removes those barriers, there really isn’t such a thing as a global acquirer,” Mary said.

Entering new markets and dealing with individual regulations, habits and preferences are among the biggest challenges merchants face today. All they want is a complete solution towards a faster, more efficient and less costly market entrance. As an active player in the global acquiring arena, Payvision has been constantly investing in creating a unique acquiring platform to connect banks, acquirers, PSPs, and their merchants around the world.

On behalf of Payvision, I was invited to participate in a panel discussion on the latest developments in e-commerce and m-commerce. The evolution of these two commerce grounds is happening at a really rapid pace. As mobile commerce is no longer a buzzword, we are actually witnessing a true mobile payments revolution. These are exciting times for acquirers around the world to identify and answer the main challenges merchants face today in a global e-commerce world. There were a lot of questions around technology issues and some of them missed the real point: the real needs of the end-user, which acquiring communities to actually focus on, and how to identify them. Only then will we be able to deliver solutions.

From Mastercard we heard that over the next 12 months we will see a lot more education within the acquiring community and more partnerships between payment facilitators and acquirers, with both new and traditional players entering the scene.

E-commerce has been growing much more quickly than card payments overall. This is mainly due to wider consumer access  to the internet, thereby increasing the number of merchants trading online. At the same time however, e-commerce fraud is also growing. Fraudsters have thousands of ways today to access the identities of consumers. Understandably, given our increasing reliance on technology, today’s consumers are more concerned by cybersecurity than they were 20 years ago.

The increased fraud numbers and case studies have been discussed by Interpol itself. In this age, the numbers of financial data breaches aren’t necessarily increasing. What is worsening is the severity of, and the ways in which fraudsters use and manipulate the compromised data. Interpol’s key message was therefore to highlight the importance of bringing the private and the public sectors together. Jim Anderson, Assistant Director at Interpol, invited all payments and acquiring industry leaders to work together as a team and fight back the increasingly savvy fraudsters.

In order to keep up with the techniques and methods used by fraudsters and to stay one step ahead of them, Interpol revealed the opening of their innovation center in Singapore. They also emphasized that observing PCI compliance standards is the least merchants can do to protect themselves against online fraud. Although costly, these payment industry standards ensure the fundamentals for security and compliance within the fast-paced payments industry. As Anderson said: “Either you pay now, or you will have to pay a lot more later and your corporate reputation will be affected.

Another topic on the GAC Conference agenda was trendy digital currencies, with Bitcoin and Tibado leading the discussions. Jon Matonis from the Bitcoin Foundation mentioned that the number of Bitcoin transactions per day have almost doubled. The main challenge for Bitcoin now is the process around changes to the court protocol – in particular the block size limit which at the moment allows seven transactions per second. On the other hand, Tibado, the new kid in the digital cash town, claims to conduct 10 to 30,000 transactions per second, through a centralized and patented “live coin database”.

How acquirers and issuers should move forwards

One of our biggest takeaways from GAC London was for the acquiring industry to quit functioning like regional merchants providing regional solutions, and instead start thinking globally and working together. Issuers and acquirers need each other, so players should share profitability by penetrating more markets and getting more business done globally.

The author

Gijs is one of the three Payvision's co-founders and acted as our COO until April 2020. He’s got extensive knowledge on the e-commerce and global payments industries, especially when it comes to joint ventures and strategic investments. With his industry expertise and know-how on the growth of the e-commerce sector, Gijs has become a distinguished panelist at events.

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