Standardization to meet innovative mobile payments

Transcription

1 Standardization to meet innovative mobile payments SIX Paymit for merchant payments Christian Bucheli Penha Longa Resort, Estoril, Portugal, 8 October 2015 Classification: public

2 Content SIX in short Paymit.com Evolution to merchant payments Acceptance gap Standardization outlook 2

3 Company presentation SIX in short 3

4 SIX Group - a globally unique service portfolio Securities Trading Securities Services Financial Information Payment Transactions Stocks Warrants Bonds Funds and ETF Derivatives Repos Clearing Settlement Custody Administration Stock exchange data Index data Valuation data Administration information for securities Payment cards business POS and processing services Interbank payments in CHF / EUR (PEACH) EBPP (PayNet) Operating Income EUR 946 m Net income EUR 266 m Total equity EUR m Share holders 160 Figures: Annual report 2012 Over employees (FTEs) of 52 nationalities across 40 locations in 24 countries Expertise in IT, financial and process knowledge Sustainable staff development through targeted promotion of key talents, structured succession planning and training programs User owned, user governed

5 SIX Payment Services overview SIX Payment Services covers the entire electronic payments value chain and possesses all necessary banking and PSD licenses to provide financial services across Europe with almost 50 years of business experience. Merchants Card Issuance - Cobranded international payment cards - Closed loop private label payment cards - Closed loop private label loyalty cards Enabling - Stand alone POS solutions - Integrated POS solutions - E-commerce PSP solutions Financial Institutions - Issuing partner models - Issuing processing and management - Issuing services (fraud, auth. Cardholder support, etc. - Stand alone POS solutions - Integrated POS solutions - E-commerce PSP solutions Card Acceptance - Multibrand, multicurrency acquiring - Merchant processing - Acquiring reseller models - DCC solution - Value added services - POS Acquiring partner models - Merchant management - POS Acquiring processing - ATM Acquiring processing - ATM Management - Transaction switching - DCC solution - Value added services Non card payments - Mobile peer 2 peer payments - Mobile peer 2 peer payments 5

6 6

7 What is «Paymit»? 7

8 The Vision replacing CHF 87 bn of cash transactions in Switzerland being an open payment ecosystem with access for all participants setting the Swiss standard for mobile payments 8

9 Status Quo went live May 2015 with a peer-topeer payment functionality having downloaded apps as of September 2015 available at UBS, ZKB and SIX, Coming soon: Raiffeisen,Banque Cantonal Vaudoise, Luzerner Kantonal Bank,Genfer Kantonal Bank, Schwyzer Kantonal Bank, 70 Swisscom Banks 9

10 Marketed via Banks

11 Use cases confirmed After Work Beer Sharing Lunch Costs Sharing Dinner Costs Coffee Break

12 Evolution The evolution 12

13 Two possible scenarios Market penetration Small merchants Unattended In-app ecommerce Large merchants Alternative roadmap 1. Roll-out to large merchants first (only possible without interchange-like fee model) 2. Roll-out to remaining market based on strong merchant acceptance Large merchants Small merchants Unattended In-app ecommerce Envisioned roadmap 1. Generate strong community 2. Introduce interchange-like fee model 3. Roll-out to large merchants P2P

14 Acceptance gap 14

15 Ways to bring Paymit to large face to face merchants 1. Contactless / NFC 3. Extended P2P MERCHANT ID Erika18 5. Dynamic QR code on terminal display 7. Virtual Payment Identity without mobile device 2. Magstripe 4. Bluetooth LE bidirectional 6. Barcode on mobile device screen e.g. PHONE NUMBER + PIN or just an NFC sticker with my ID or just fingerprints on terminal 15

16 10 Key success factors in P2M 1. Minimize infrastructure costs and integration efforts at merchants 2. Minimize training efforts at merchant 3. Minimize cost of transactions 4. Reduce (or eliminate) queues customer experience / speed of transaction / self service 5. Reduce staffing costs self service / faster throughput 6. Maximize user base 7. Ease of use for consumer 8. Use existing infrastructure 9. Embrace international interoperability 10. Rely on standards 16

17 Overlap with NEXO standards The NEXO standard currently partially facilitates the acceptance of mobile payments when travelling on classic card rails, i.e NFC or Magstribe with HCE and tokenisation. 17

18 Acceptance evolution cycles Cards were initially accepted via imprinters and later by magstripe EFT POS devices. Since a bit more than 10 years we have EMV Chip Terminals and by 2020 all such devices should be contactless which will make them ready to be used for card rail based mobile payments like ApplePay and AndroidPay. Chip EMV POS NFC EMV POS Open Payment APIs Magstripe EFT POS Imprinters The subsequent step, also powered through the access to account discussion under PSD 2 will though most probably be open API s. 18

19 Standardization outlook 19

20 Ideas to make NEXO future ready: I If the future omni-channel acceptance infrastructure cannot be standardized proprietary solutions might restrict the market development and limit innovation. It will therefore be paramount to observe the market development. Additionally it could be useful to open the scope of NEXO beyond classic POS devices through the following activities: Generally invite new players to participate Specifically invite p2p schemes to participate (>50 in Europe) Actively embrace e-/m- commerce and multi channel Start reflecting on a standard payments API 20

21 Ideas to make NEXO future ready: II In the future merchants should be able to handle all payments through a standard API regardless of the channel, device and payment method. Such an API would also strongly increase the innovation output in payments since new services could rely on a standard solid interface. NEXO could contribute essentially to this endeavor E-Com ERP M-Com Cash Register API I-App Alt. Payments POS Card Schemes mpos 21

22 and help in moments like this 22

23 Unlocking the potential.