Ingenico, being one of the pioneers for payment acceptance, is one of many global companies constantly seeking to evolve its systems to enable a multitude of alternative payment methods for both merchants and consumers.
Speaking to Payment Expert, Philippe Cece, Solutions & Software Architect at Ingenico, believes that companies should be looking to the nexo for improved retail adoption, why this payment method has taken over in 2024 and more on Ingenico’s partnership with Crypto.com
Payment Expert: Firstly Philippe, this year has seen many developments within digital payments, but what are some of the standout developments you believe have impacted how users pay, either at retail stores or on e-commerce platforms?
Philippe Cece: From my point of view there are three developments, or usage of old techniques that have been outstanding this year.
I believe that the first one is the rise of Instant Payments. In a recent study, it was reminded that in Europe, the total amount of transactions processed by Instant Payments is above the total amount of transactions processed per-card. Even if the total number of transactions processed by Instant Payments is lower than the one from card. The rise of new use cases, and the increasing number of e-commerce platforms accepting Credit Transfer, will probably shuffle these figures.
The second element to notice is a trend to reduce physical interactions with payment terminals, even through the deployment of biometrical solutions, or the use of alternative solutions like tokenisation through mobile phones. This latter technique is not new, but we can see this adoption by older people.
The last development that has been noticeable is the adoption of solutions of services like Buy Now, Pay Later or Issuer Instalment, probably due to a post lockdown effect or a rise in energy cost.
PE: Within the UK retail sector in particular, climbing back from a cost-of-living crisis, why is it important for merchants to deploy tailored payment methods for its consumers in a bid to make the customer journey as seamless as possible?
Philippe Cece: I guess that we are all personally strained by new regulations, searching for ways to reduce our ecological footprint and ways to save on our bills. Since our business time is constant, we have to save time on other tasks, and shopping is an important activity.
So, in order to gain new or keep existing customers, merchants have to provide a seamless solution. And we need to confess that, except for payment experts, paying is not an interesting activity for the man on the street, even if generally speaking he is eager to know how it works.
PE: What else goes into a merchant’s payment offering that many don’t take into consideration, particularly in regards to payment security, compliance and regulation that the merchant may not know?
Philippe Cece: In a world where we are looking for cost reduction, reuse and so on, I’m surprised to not see a rush on nexo retailer adoption.
The use case provided by Nexo should be a must read for any merchant acting in more than one country. The nexo retailer protocol is part of the ISO20022 protocols family, which ensures the evolutionary support of new payment types and use cases, with optional support of state-of-the-art cryptographic algorithms.
And the cherry on the cake is, that if by miracle you don’t find a way to support your use case, ISO20022 standards allow you to ask for change through a Change Request procedure.
And for those who want the cream on the cherry on top of the cake, you can even join nexo-standards and design this protocol with peers.
PE: E-commerce has now become the predominant mode of buying goods for consumers but is there still value for both consumer and merchant for in-store payments and why?
Philippe Cece: Well, I assume that e-commerce might still be a major mode, probably due to some habits taken during lockdown.
Additionally, we know that automated convenience stores exist also, but our biology and our confidence is based on social contacts. I’m quite sure that we will still have in-store payments with new payment types or usage.
In a similar way, some countries planned to be cashless in the near future and changed their mind recently. A merchant must be inclusive, so it should provide solutions for all kinds of people, those with high experience with computer science and those without, and as we said earlier, make it seamless.
PE: How will the role of fintech standardisation evolve over the coming years with the impending PSD3 and ISO 20022 rules set to come into effect over the next several years?
Philippe Cece: I believe that these rules are very important, since it backs development of payment solutions that natively provides security, interoperability and universality.
The dark side of these rules is to lead to complex solutions which require a lot of effort and attention during study and maintenance, which could be a corrective or evolutive one.
On the other hand, our payment habits are strongly linked to our culture, and the definition of a payment service might lead to various and tough descriptions. For example, consider the “simple” tip management, which could lead to multiple implementation and adoption.
Consequently, we can conclude that more and more complex solutions have to be developed, taking into account more and more constraints, for broader usage and in a shorter timeframe. All in all, it sounds like probably a rule that has been put in place since the beginning of humanity.
PE: With Ingenico recently partnering with Crypto.com for crypto payment settlements at POS, what value do crypto payments have for not just the customer and merchant, but also for the future landscape of the financial industry?
Philippe Cece: As we said earlier, I think that a merchant must provide as many possible different payment solutions to its customers, and cryptoassets is one of these solutions.
But we need to bear in mind also that we generally talk about “cryptocurrencies” where we should use “cryptoassets”. These solutions are not currencies since they are not stable and not globally adopted, which are two of the three main features of currencies.
I believe that for some domains, stability is necessary. But I know this solution has clearly some key usage and will fit specific needs.
PE: Finally Philippe, and thank you for your time, we have to mention AI. How crucial is it for financial institutions to first set out a responsible AI program before it can experience its seemingly limitless benefits, and what do these benefits look like when it pertains to payment processing?
Philippe Cece: Obviously, we can easily identify the benefits of AI for any controls or security topics. It would probably help us to identify fraudulent payments or merchants, websites, etc.
On the other hand, we have to study how deepfakes might impact customer services and lead to fraudulent refunds for instance. Additionally, we will also have to study and probably change our regulations if we are considering using AI in the processing or triggering of payment transactions. Should we have the same confidence in a transaction initiated by a human or by an AI acting on behalf of a human?
I don’t have an answer for this, but we are already able to differentiate these two transactions in the Nexo Acquirer protocols.
