Money20/20: Payment Networks Call for More Merchant Participation in Innovation
Merchants get ready: That was among the main messages at Money 20/20 in Las Vegas, during an Oct. 25 roundtable session with executives from the four major payments networks.
Executives from American Express, Discover, Mastercard and Visa agreed that as commerce becomes more digital and mobile, and payments strive to keep pace, merchants will have a larger voice in creating and deploying new transactional technology. That mirrors a session on Monday that focused on merchant views of what they want from the payments industry, including an earlier say in how payments evolves.
That may sound like typical conference talk expressed annually and then quickly forgotten, but the experts on Tuesday’s panel spoke with certainty about learning from merchants that directly deal with consumers and increasingly collect and process mountains of data on customer behavior.
“Merchants are really important constituents for us,” said Luke Gebb, senior vice president, enterprise digital, for American Express. “Over the next year, the merchant side will be very, very important.”
He told a full ballroom full of attendees about how American Express not only targets cardholders with offers based on their spending histories, but recommends small merchants those consumers might be interested in—so far, about 10 percent of those consumers have shopped with those recommended merchants, he said.
Going forward, payment networks will have to work to create experiences for consumers to win their business, said Amy Parsons, vice president and head of global commerce, Discover Financial Services. That will mean integrated mobile apps that make payments simple and efficient, and save consumers the trouble of shifting to other apps to complete purchases. Building those apps will require retailer input. “Merchants sit in a very interesting spot in the ecosystem today,” she said.
Additionally, APIs will play in an increasing role in driving payments innovation, said Garry Lyons, Mastercard chief innovation officer. But that’s not to say that the industry has moved past present challenges. Both Lyons and Jim McCarthy, Visa’s executive vice president, innovation and strategic partnerships, noted that getting EMV right in the U.S., and protecting against the migration to card-not-present fraud are ongoing.