Adopting nexo ISO 20022 standards - the benefits for retailers Mark Beresford, Director Head of Retail Payments Prac8ce Edgar, Dunn & Company
Thursday 8th October 2015 nexo Annual Conference Sintra, Portugal
Retailers are in a state of flux because there are 4 drivers of change
Change #1 Customer Behaviour
Change #2 New
Technologies
Change #3 New
Regula8ons
Change #4 Payment
Fragmenta8on
pay
Driver of change #1: evolving consumer behaviours
Single Channel Mul@channel Omni-‐Channel
Driver of change #2: new technologies are enabling new use cases
Wifi & Beacons mPOS HCE
Enables retailers to exchange
informa@on with their prospects /
clients
Enables retailers (e.g. for queue bus@ng, or
for at-‐home merchants) to accept payment via their
mobile
Cloud-‐based technology that
enables new mobile-‐related use cases without being SIM-‐
centric
SSKs (Self-‐Service Kiosks)
In-‐store shopping experience is enhanced with
interac@ve touch-‐screen search and order portals
(blurring line between online and offline)
Driver of change #3: new regula8ons
MIF Regula8ons, Surcharging, Honour All Cards Rule, PCI DSS, Strong Customer Authenica8on, etc.
Driver of change #4: payment fragmenta8on
X"pankkikortti"X"X"
In addi8on, there are a lot of new entrants (focused on customer-‐not-‐present and in-‐store transac8ons)
1950%
Proximity) Mobile)
1990%1980%1970%1960%
Internet)
2007%
2005%
2020%
2003%
2009%
2003%
2000%
Within this context, EDC was engaged by nexo to conduct merchant research
Payment Providers
Technology Providers
Merchants
Industry Experts
Large European Retailers
Mul@-‐Country General Retailer
Why are retailers interested in the nexo ISO 20022 standards?
12 Faster @me to market and deployment
11 Financial savings
10 Acquirer independence
9 Universal open interna8onal standards
8 Cer8fica8on and compliance simplifica8on
7 Future flexibility and empowerment
6 Single payments environment
5 Driving innova8ons agenda
4 Increasing compe88veness and advantage
3 Supplier consolida8on /agnos8c
2 Employee efficiency improvements
1 Improving customer experience
Most important
Least important
Four main levers will generate cost savings of at least 20%
Retailers: 4 levers to achieve financial savings
1. Centralising payment systems and opera8onal management (e.g. facilita8ng cross-‐border consolida8on)
2. Paying lower prices for POS terminals (likely savings of at least 10%)
3. Nego8a8ng lower processing fees from acquirers
4. Having fewer payments processing suppliers to manage
Financial savings for retailers
Ø Projected savings of at least 20% can be achieved
-‐Specific example: “Each country protocol costs us more than €100,000”
Ø Return on investment payback expected to be under 3 years
Payback period of less than 3 years
There are also a number of qualita8ve benefits
Qualita8ve benefits
nexo compliant systems will deliver
faster @me to market
Complete acquirer
independence
Simplified PCI DSS
compliance
IT produc8vity gains and
improvements in opera@onal efficiency
Ability to mix and match POS models from mul8ple suppliers
Flexibility to introduce smart transac@on
rou@ng
nexo standards will help accelerate the pace of payment
innova@on
Which Types of Retailers are Likely to Adopt the nexo ISO 20022 Standards?
Retail Segment 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Mul8na8onal grocery (supermarkets)
Mul8na8onal general retailers
Petroleum retailers
Interna8onal hotel groups
Tier 1 Na8onal retailers
Tier 2 retailers
Peak adop8on period
Adop8on Timescales
Next Steps for Retailers
EDC would suggest a three-‐step approach to obtain management buy-‐in and the advantages of adop8ng the nexo standards
Step 1 Step 2 Step 3
Where are you now?
Where do you want to go?
Are you gebng there?
360° Payments Diagnos8c
Payment op8misa8on
plan
On-‐going monitoring
and management
Next Steps for nexo
nexo has published the results of the merchant research and survey and it has been suggested that a similar survey
Merchant Research and
Survey
Acquirer Research and
Survey
Completed
Merchant point of view
Bank point of view
þ Proposed
Thank you…
Edgar, Dunn & Company Candlewick House 120 Cannon Street London EC4N 6AS
Tel +44 207 283 1114 Mobile +44 7825 027 525
Fax +44 207 283 1007
Mark Beresford Director
