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Why now is the perfect time for innovation within remote payments



Fintech has reshaped the entire digital payments industry and there are more changes on the horizon, says Donal McGuinness, CEO of Prommt. 

Often when we try to predict where we are going, we need to take a look back at where we have come from. This generally dictates the direction of travel, rather than where we are at an instant

in time. With remote payments, it is important to understand that as recently as 1998, pretty much 100 percent of the transactions were fulfilled by someone calling out a credit card number over the phone, or filling in a mail order form and posting back. These were known as MOTO payments (Mail Order Telephone Order) and pre-dated cards having secure chips, or CVV numbers on the back.

As we moved through the turn of the century and beyond the year 2000, we had a number of factors influencing change. Broadband access, the arrival of eCommerce, cloud computing, and the ubiquity of mobile devices. Over the next 20 years, remote MOTO payments generally migrated to eCommerce payments, with one exception. Complex B2B and B2C transactions remained as MOTO. This is due to the fact that these bespoke ‘checkouts’ needed to be built up via consultation with an expert. This generally still equates to between 12 percent and 16 percent of the entire remote payment market. MOTO payments are not declining any further either as many merchant types can only sell via a consultative process, as is the case with purchases such as building supplies, automotive, hospitality and corporate events, or in relation to high-value purchases, such as a Rolex watch, which the purchaser would be reluctant to purchase online without assistance and consultation. With MOTO payments, the risk is carried by the merchant. One of the strengths of eCommerce today is that due to 2FA, the risk and liability shift moves from the merchant to the card issuer/payer. Let’s hold that thought, as we will come back to it.

In parallel, many B2B and B2C payments are made via traditional bank transfers. These have been very cumbersome to set up and the movement of funds was very slow. However, one of the key advantages is the cost of processing the transaction is much lower than credit card transactions and it involves a fixed fee rather than an ad valorem % charge. This is perfect for merchants with relatively low transaction volumes, but high average transaction values (ATV). This is one of the reasons why bank payments have been traditionally popular with B2B transactions. Higher volume transaction merchants would have offered “payments on account”, where the customer was effectively given one month’s credit and billed at the end of the month. This came about due to the previously mentioned highly manual bank transfer process coupled with the slow movement of funds through the system. This practice is still widely used today but is an unbelievably risky way to conduct business.

A number of initiatives in the banking world are changing the landscape of remote bank payments. Way back in 2016, Payment Services Directive 2 was announced with a lot of regulatory changes which for the most part have been delivered in phases since 2019. These changes have involved a mix of Secure Channel Authentication (SCA/2FA) for eCommerce and Online Banking Access, and also Open Banking, which has mandated that the banks offer open APIs that regulated entities (fintechs) can access and offer value-added services. In addition to this, real-time payments and faster payments have become the norm in some countries and are on the roadmap of most others.

Fintech has reshaped the entire digital payments industry and there are more changes on the horizon. To put into context, the remote card market in the USA was $3.8 trillion in 2020, of which $630 billion was MOTO. At the same time, the bank transfer market was $69 trillion in 2020. If you look at the UK market, the figures show 5.5 billion in bank transfer transactions.

The coupling of Open Banking Payment Initiation with Faster Payments now offers a viable alternative for merchants to efficiently process large volumes of bank payments and enjoy the almost real-time collection of funds. Suddenly an “eCommerce-like” experience is available for A2A bank payments. The ability to request payments from your customers remotely, at scale, by anyone in the organisation and not just the overworked accounts team, is here now. No longer does the payer need to set up suppliers as new payees within the online banking environment. This now happens automatically removing most of the friction from the payment process. This results in businesses getting paid faster. Reconciliation is also really easy and the guesswork is removed from analysing inbound payments in their bank statements.

Many organisations are already processing millions of pounds in Open Banking payments per month and it is growing steadily. End customer adoption has been strong and has not been the challenge expected by the industry. Sectors including automotive, construction, auctioneering, and luxury retail account for the majority of client uptake of open banking payments. We are seeing the average transaction size for banks is almost double that of card payments, the highest bank transactions greatly exceed top card amounts and Open Banking payments are driving cumbersome bank transfers into slicker Open Banking transactions. This is a game-changer for payments as we head into 2023 and beyond.


Does the middle market have a financial edge?  



Companies tend to look up the ladder when searching for ways to improve efficiency and business performance. What are larger competitors, or others outside their industry, doing right that they can learn from and implement?

What smart technologies or bright ideas do they have that could create efficiencies for them, too?  

As we enter yet another likely volatile year for business, punctuated by recession, should businesses continue to only look up? And could the approach of a slightly smaller business offer more of a competitive edge? 

Large corporates tend to pioneer innovation in automation by simple virtue of the resources they have. Home to transformation directors and departments, with the ability to implement large overarching software systems, they pave the way for others and are often the first to digitise their source-to-pay cycle at pace.  

While growing businesses understand the merits of full automation, implementing it is often too expensive and it doesn’t bring the rapid realisation of benefits that they need. They need to consider what will bring them the biggest return on investment – and the reality is that those in the middle market don’t necessarily need all the elements of an ‘all-doing’ piece of software. What’s more, without dedicated personnel to project manage a transition, they frequently lack the currency of time to be able to comfortably transform working practices, and take staff with them on the journey, without taking resource from other areas of the business.  

For SMEs, digital transformation has never been quite as seismic a shift. Instead, they tend to take a modular approach, employing digital solutions only for particular areas of their finance department, where they need them. This has never been a particularly strategic move. Rather, for a growing business that values quick results and watches their outgoings with greater scrutiny than their larger counterparts, it’s something that suits them better. A modular approach also comes with very little disruption and can be implemented relatively seamlessly into their existing organisational setups. 

But while growing businesses are opting for a modular approach because it’s the most cost and time effective option for them, the benefits go far beyond that. The beauty of a modular approach is that it is agile. The last three years – with pandemics, an increasingly challenging climate and shifting geopolitical tensions impacting our global economy – have only served to remind us of how suddenly, and drastically, a business landscape can change. The companies that have weathered the storm are those that have reacted and adapted quickly – those that have been capable of changing the way they do things with little impact on day-to-day operations. A modular approach can offer just that.  

Businesses using modular finance technology can integrate small solutions that sync up with the rest of their processes, quickly and seamlessly – and these systems can be integrated into their existing Enterprise Resource Planning (ERP), too. There’s no restriction of a monolithic or aging piece of software either – finance teams can add and update small solutions to their daily operations without the upheaval of having to replace or update large IT infrastructures or wider working practices within the business to accommodate the new software.

Unrestricted by entrenched and hard-to-change systems, the speed with which SMEs are able to react to market changes is miles ahead. A prompt software add-on to manage risk, or create a quick fix in response to a market shift, can be virtually a knee-jerk reaction. SME’s abilities to bend and flex to today’s world efficiently is seeing them reap the benefits of a modular approach. It’s lean, it’s fast and it’s facilitating their growth with a strong competitive edge. And as some of these companies’ growth propels them into the large corporate sphere, they’re choosing to keep a modular approach to finance.  It will certainly be interesting to watch those middle-sized companies which grow to the extent that they find themselves competing in the same space. With no financial remodelling to assume a large ‘all-doing’ piece of software, they’ll be competing against their counterparts with completely different tools in their arsenal.  

With technology, working life and business needs continuing to change day to day, we have another year ahead of us that will see companies running to keep pace with each other – and fast-growing companies’ approach to finance could be the silver bullet that enables them to catch up with, and even take on, big enterprises. It might just give them a competitive edge against large corporates in these turbulent times.

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Consumer demand driving sustainable payments




Jenn Markey, VP Payments & Identity, Entrust


Sustainability is a buzzword that seems to be at the forefront of all industries. Since The Paris Agreement of COP21 back in 2016, organisations must now report on the sustainability of their actions per government requirements. While this has put pressure on organisations to re-evaluate their business plans to incorporate sustainability as a core business component, it has opened up vast opportunities for organisations to gain a competitive edge, while adhering to government regulations and improving sustainability. The payments industry has proved to be no exception.

From physical cash and card payments to digital payments through mobile phones, all forms of payment have an environmental impact in some way, and financial service providers must, therefore, evaluate their actions.

A growing consumer demand

Firstly, it’s important to recognise that the issue is not that payments are unsustainable. It is more related to consumer awareness and increased government oversight and regulation.

In today’s society, most consumers want to be sustainable and because of this, have a heightened awareness of the consequences of their actions. This means that if businesses don’t have an environmentally friendly payment option, they risk dissuading a large proportion of consumers from using their banking or financial services.

Jenn Markey

This even applies to the ways consumers make payments on a day-to-day basis. After the COVID-19 pandemic, we saw a drastic shift in popularity of contactless and digital payment formats for safety and convenience reasons. This trend continues to grow as consumers see the benefits that digital and contactless payments have on shrinking carbon footprints. Of course, incorporating digital payments can work towards this by reducing plastic waste associated with physical cards, as well as their packaging and production energy. And even more known to the consumer in a high-speed society, digital cards are instant – if you get a new card from a digital-first bank, in most cases, you can add it to your e-wallet and use it straight away. Speed paired with sustainability makes the digital card increasingly popular in today’s society.

A preference for physical cards

While it might seem that digital payment options like Apple Pay and Google Pay dominate in terms of popularity, research suggests that physical cards are still here to stay. In our recent consumer study, The Great Payments Disruption, respondents listed credit/debit cards with chips (50%) as their most preferred payment method, but contactless credit/debit cards (48%) were a close second.

With this in mind, it doesn’t have to be one or the other, as banks and financial institutions can improve their sustainability practices for physical cards whilst still abiding to the growing adoption of digital cards. Adopting sustainable practices will help banks and financial institutions adhere to ISO 14001 requirements, an internationally agreed standard that maps out the requirements for an environmental management system. What’s more, expected regulation and oversight following the Paris Agreement further highlights the need for banks and financial institutions to take action on sustainable practices. Such requirements outline ways for the sector to improve environmental actions by being more efficient with resources to reduce waste. Reducing the number of resources being used for printing cash or physical cards, for example, will not only improve company sustainability, but also lower production costs.

A further benefit for banks and financial institutions lies in the ability to make physical cards more sustainable by improving durability to extend their lifetime and, where possible, explore eco-friendly card substrates. Today, most payment cards are not biodegradable and, therefore, need to be disposed of in a manner that can be wasteful. Card manufacturers are working on more environmentally-friendly materials to reduce their carbon footprint in the future. Producing cards with durable graphics technology extends card life, meaning lower demand for new cards, fewer materials needed in the production of cards and card printers, and of course less waste. Additionally, extending the life of physical cards will help with the ongoing supply issues regarding chip shortages.

A more sustainable banking sector

Over the next few years, we can expect to see a continuation of the post-pandemic trend of cashless and e-commerce transactions. This paints a positive picture for sustainable payments as the ongoing adoption of alternative payments means a reduction in carbon emissions. Most importantly, banks and institutions can already incorporate more sustainable practices, such as printing cards in-house, and only when required, for near-immediate distribution to keep up the pace of instant e-wallets, while switching to more sustainable printing materials and practices.

What’s clear is that contrary to belief, the subject of sustainable payments is not a case of simply switching to digital payments and eliminating the physical card altogether. It’s about increasing the sustainability of physical cards to keep financial accessibility for every consumer in mind. This should be the next stop for banks and financial institutions on their journey to a more sustainable sector – one where we look after all of our consumers’ needs in today’s society.

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