José Luis Arias: ‘New Players Disrupting The Market’

Earlier in October the Ingenico Group, smart payment solutions provider, announced the appointment of José Luis Arias as Executive Vice President for Europe, Middle-East and Africa (EMEA). 

Having formerly served as the company’s Executive Vice President for the Latin America region, Arias will now be based at Ingenico’s Paris HQ where he will focus on both maintaining and developing the company’s growth in the EMEA region. 

In an interview with Payment Expert, Arias discussed the similarities between the Latin American payments ecosystem and that of the EMEA region. As well as this he outlined the opportunities that the EMEA brings to Ingenico and gave his opinion on the future of the region. 

PE: Following on from your transition of roles, what are the similarities and differences between the current state of Latin America’s payments ecosystem and the EMEA region? 

JLA: Both Latin America and EMEA are diverse regions, in the sense that they have different levels of electronic payment penetration and cash prevalence. In EMEA, the differences are more acute, as they are very developed and mature markets – similar to those in Western Europe. On the other hand, though, there’s also emerging markets, as you’d find in Africa, for example. 

There are similarities between Latin America and EMEA in their emerging markets, primarily in their interest in making electronic payments to the largest possible share of the population.

In Latin America, this has mostly been done by the expansion of mPOS or basic terminals, with very large deployments in countries like Brazil and Peru. In East Africa, this has been achieved through the expansion of mobile money. 

What’s interesting is that, as both approaches are not mutually exclusive, we are seeing that in places where terminals have taken off, mobile opportunities exist, and vice versa.

PE: What are the types of opportunities that Ingenico see in the EMEA? 

JLA: If we look at mature countries, opportunities come from various outlets, most recently including growth in smart terminals, use of Android, and HTML5 technologies. 

Smart terminals allow merchants to easily incorporate value-added services in the terminal. Ingenico has a very wide and comprehensive product range which has been successfully deployed in both Latin America and Asia and is currently being deployed in Europe. In emerging markets, there are also opportunities to provide solutions to the ‘long tail’ sector through the use of mPOS and terminals without printers. Both provide excellent value for money. 

Traditionally, the payment industry has had a very static business model, but new players are now disrupting the market. By expanding customer diversity, Ingenico will continue to be the leader in the sector and drive the transformation of the industry at the point of acceptance.

PE: How vital is mobile money interoperability for merchants in the region? 

JLA: Mobile money interoperability is becoming increasingly important. We are seeing this trend in geographies where mobile money is prevalent, such as East Africa.

We have also seen that there is a need to provide solutions that allow merchants to accept as many payment methods as possible, and those solutions need to be seamlessly integrated. A big part of our role is solving the complexity for merchants at the point of sale.

At the end of the day, merchants are reliant on selling, and accepting as many payment methods as possible to help them maximise sales and, ultimately, grow their business.

PE: How could a ‘cashless society model’ impact the region? Is this the best way to improve financial inclusion or do you feel there’s better options? 

JLA: The impact of the introduction of electronic payments and the elimination of cash offers great benefits. Electronic payments allow a safe and transparent movement of funds, hinder money laundering, contribute to the elimination of tax evasion, and discourage corruption, amongst other benefits. We are seeing the benefits of electronic payments in all geographies where these type of payments have been introduced. 

In mature markets, societies are becoming increasingly cash-free as more consumers choose to rely on debit and credit cards, as well as alternative payments like mobile wallets. By providing more options for cashless payments, merchants maximise their chances to increase sales while also enhancing user experience. 

In emerging markets, electronic payments are a proven way to promote financial inclusion. We have seen very successful cases of agency banking harnessing Ingenico technology that has then allowed banks to significantly increase the number of places where people can open or operate an account. 

Other success cases include the use of mPOS together with a debit card. This means that acquisition is settled on a prepaid or a debit account as the merchant now has access to a full electronic payments suite. This has been also a very successful in increasing financial inclusion, particularly in markets such as Peru.

PE: In your opinion, what piece of financial technology will be most influential for the EMEA region moving forward? 

JLA: There are several technologies that we are following closely. For example, open standards, including Android as an enabler of collaborative ecosystems and APIs in payment method authentication. Another is blockchain technology, however it’s difficult to ascertain which one will be more influential.

PE: What can EMEA take from Europe in terms of regulation of the payments industry? Could a similar PSD2 structure be put in place? 

JLA: Europe is setting the standards when it comes to regulating the payments industry. The introduction of PSD2 is a prime example of using regulation to increase competition in areas such as banking and payments.

The effort that has been made in creating a level playing field in the industry and increasing competition is something that is being analysed and adapted in other geographies.