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CoverStory
In Germany, for example, consumers prefer debit cards to There are some differences to consider, of course. Canada
credit cards. In the United Kingdom, credit cards remain is a much smaller market, French is the primary language
popular, but several alternatives have been gaining, for about 20 percent of the population, and PIN debit is the
notably the Faster Payments Service, an automated clearing most common POS card-based transaction. Merchants in
house-like network with near real-time settlement. (Net Canada also expect more on-site support from their ISOs
settlements are performed three times daily.) In France, and acquirers, according to Green.
Carte Bleue debit cards account for 85 percent of all
e-commerce transactions by French consumers. U.S. ISOs and acquirers already doing business in Canada
gain the added advantage of being ahead of the EMV
Meanwhile, in Spain, merchants deal directly with their curve, according to Green. "Having practical knowledge
local banks for payment services. And in numerous of EMV is a competitive asset in a market [like the United
overseas markets, legal constraints on who can do business States] that is just implementing EMV," he said.
with merchants necessitate finding local partners, experts
noted. E-commerce and fraud
Legal and regulatory hurdles The spread of e-commerce clearly makes international
acquiring a more viable option for U.S. companies. And
The European Union has undertaken a series of measures when an established merchant decides to start selling
it says are intended to make payment acquiring more online one of the first calls they make is to their ISO or
competitive across its 28 members. The creation of the acquirer. "They look to them for support," Green said.
Single Euro Payments Area (SEPA), for example, came
with uniform procedures and euro-denominated formats
for retail payments (bank-to-bank and card transactions).
And SEPA is now working on an instant credit transfer
system for retail payments that operates like the U.K.'s
Faster Payments Service. Payments execs look for better deals
Early in 2015, the EU capped interchange for most credit Reducing the number of intermediaries in the payment chain
and debit card transactions. In a recent spate of rulings, tops the wish lists of a growing number of payments executives
the EU also told the card brands to eliminate rules that worldwide. That's the key takeaway from a new Global Payments
prevent merchants from steering customers to preferred Insight Study by ACI Worldwide.
payment cards and methods, and to abolish honor-all-
cards rules. These latest regulations also impose new Forty-four percent said reducing the number of fee collectors in the
billing practices on acquirers and processors. For example, payment value chain is a top priority, ranking higher than both the
beginning in December 2015, billing statements must ability to make targeted ofers (41 percent) and mobile commerce
break-down merchant charges on a per-transaction basis. (39 percent). Nearly 60 percent said they are evaluating direct
connections with banks in order to eliminate or reduce reliance on
"They are trying to drive acquirers to be more competitive, the card networks. Meanwhile, 85 percent of bankers said they want
and bringing down interchange is one way of doing that. to work more closely with clients to help reduce costs.
It's a way to level the playing field," Pascoulis said.
ACI partnered with the market research and advisory frm Ovum for
Opponents believe the new rules will be a financial its global payments study, which queried executives in consumer
drain on acquirers in Europe – and lost revenues could fnance, higher education, insurance and other consumer billing
top $6 billion a year. Wilson, who works from EVO's organizations.
London office, is more optimistic. "It actually opens up
opportunities for us to compete and grow," he said. "The Additionally, 75 percent of surveyed organizations believe
ubiquity of the international brands and the new, cheaper consumers expect more payment options, and in response, half the
pricing combine to create an interesting dynamic." organizations surveyed said they were evaluating at least eight new
Closer to home, Canada beckons payment methods.
U.S. acquirers and ISOs don't need to travel far to pick It's not that the traditional payment rails are unreliable, noted ACI's
up international clients. Canada is an option. "ISOs from Chris Pascoulis. "But there are situations where retailers want to
the U.S. should, for the most part, find Canada to be a cut costs, and some are looking to create alternatives, like MCX," he
market they can understand," said Brian Green, General said. MCX (for Merchant Customer Exchange) is a mobile commerce
Manager for Canada at First Data. "There aren't the kind of payment network developed by leading U.S. merchants as an
structural differences that exist in other [foreign] markets. alternative to the major card brands.
A street-level salesperson, by and large, can take the
business development skills they honed in the U.S. and
apply them in the Canadian market." And many of First
Data's ISO partners have done so successfully, he added.
40
In Germany, for example, consumers prefer debit cards to There are some differences to consider, of course. Canada
credit cards. In the United Kingdom, credit cards remain is a much smaller market, French is the primary language
popular, but several alternatives have been gaining, for about 20 percent of the population, and PIN debit is the
notably the Faster Payments Service, an automated clearing most common POS card-based transaction. Merchants in
house-like network with near real-time settlement. (Net Canada also expect more on-site support from their ISOs
settlements are performed three times daily.) In France, and acquirers, according to Green.
Carte Bleue debit cards account for 85 percent of all
e-commerce transactions by French consumers. U.S. ISOs and acquirers already doing business in Canada
gain the added advantage of being ahead of the EMV
Meanwhile, in Spain, merchants deal directly with their curve, according to Green. "Having practical knowledge
local banks for payment services. And in numerous of EMV is a competitive asset in a market [like the United
overseas markets, legal constraints on who can do business States] that is just implementing EMV," he said.
with merchants necessitate finding local partners, experts
noted. E-commerce and fraud
Legal and regulatory hurdles The spread of e-commerce clearly makes international
acquiring a more viable option for U.S. companies. And
The European Union has undertaken a series of measures when an established merchant decides to start selling
it says are intended to make payment acquiring more online one of the first calls they make is to their ISO or
competitive across its 28 members. The creation of the acquirer. "They look to them for support," Green said.
Single Euro Payments Area (SEPA), for example, came
with uniform procedures and euro-denominated formats
for retail payments (bank-to-bank and card transactions).
And SEPA is now working on an instant credit transfer
system for retail payments that operates like the U.K.'s
Faster Payments Service. Payments execs look for better deals
Early in 2015, the EU capped interchange for most credit Reducing the number of intermediaries in the payment chain
and debit card transactions. In a recent spate of rulings, tops the wish lists of a growing number of payments executives
the EU also told the card brands to eliminate rules that worldwide. That's the key takeaway from a new Global Payments
prevent merchants from steering customers to preferred Insight Study by ACI Worldwide.
payment cards and methods, and to abolish honor-all-
cards rules. These latest regulations also impose new Forty-four percent said reducing the number of fee collectors in the
billing practices on acquirers and processors. For example, payment value chain is a top priority, ranking higher than both the
beginning in December 2015, billing statements must ability to make targeted ofers (41 percent) and mobile commerce
break-down merchant charges on a per-transaction basis. (39 percent). Nearly 60 percent said they are evaluating direct
connections with banks in order to eliminate or reduce reliance on
"They are trying to drive acquirers to be more competitive, the card networks. Meanwhile, 85 percent of bankers said they want
and bringing down interchange is one way of doing that. to work more closely with clients to help reduce costs.
It's a way to level the playing field," Pascoulis said.
ACI partnered with the market research and advisory frm Ovum for
Opponents believe the new rules will be a financial its global payments study, which queried executives in consumer
drain on acquirers in Europe – and lost revenues could fnance, higher education, insurance and other consumer billing
top $6 billion a year. Wilson, who works from EVO's organizations.
London office, is more optimistic. "It actually opens up
opportunities for us to compete and grow," he said. "The Additionally, 75 percent of surveyed organizations believe
ubiquity of the international brands and the new, cheaper consumers expect more payment options, and in response, half the
pricing combine to create an interesting dynamic." organizations surveyed said they were evaluating at least eight new
Closer to home, Canada beckons payment methods.
U.S. acquirers and ISOs don't need to travel far to pick It's not that the traditional payment rails are unreliable, noted ACI's
up international clients. Canada is an option. "ISOs from Chris Pascoulis. "But there are situations where retailers want to
the U.S. should, for the most part, find Canada to be a cut costs, and some are looking to create alternatives, like MCX," he
market they can understand," said Brian Green, General said. MCX (for Merchant Customer Exchange) is a mobile commerce
Manager for Canada at First Data. "There aren't the kind of payment network developed by leading U.S. merchants as an
structural differences that exist in other [foreign] markets. alternative to the major card brands.
A street-level salesperson, by and large, can take the
business development skills they honed in the U.S. and
apply them in the Canadian market." And many of First
Data's ISO partners have done so successfully, he added.
40
