As payments and the financial landscape continually evolves, within this evolution are merchants, often almost always on the outside looking in on the latest innovations.
When the world paused in 2020, both physical cash and cards slowly became removed from society and digital wallets became more and more incentivised. Instant payment rails have seeped their way into becoming mandatory in Europe and now the emergence of digital currencies, such as stablecoins, have added an entirely new wrinkle.
You can then be forgiven for feeling sympathy for merchants trying to keep up to pace with the latest payment methods. The difference in offering a customer’s preferred payment method and not is paramount, leading to cart abandonment and the loss of new or even existing customers.
This is why conversations and open dialogue between payment service providers on emerging payment methods, regulation and types of fraud become essential in order to ensure a customer’s needs are being met, but also the merchant’s.
These conversations will take place at the InterContinental in Berlin at Merchant Payment Ecosystem (MPE) from March 17-19, which Payment Expert will be covering.
There are a range of topics to unpack from MPE’s conference agenda, and Payment Expert will list five panels we believe will become the key talking points coming out of the event.
The Agentic Commerce era is upon us
Towards the end of last year, several major players began embedding their financial services within AI in a bid to unlock the next frontier of commerce and human behaviour.
Consumers are now deferring to AI agents, able to assist throughout the entire shopping lifecycle; from searching for products based on their preferences, to prompting a payment method at the checkout.
This rise in agentic commerce has seen the likes of PayPal adopt OpenAI’s Agentic Commerce Protocol (ACP), an open source AI model which enables transactions for merchants. Similar models have been developed in recent months, such as Google’s Universal Commerce Protocol.
Despite being in its infancy, agentic commerce is already proving to be a major talking point not just for the payments industry, but a critical tool for merchants to automate their customers’ journey.
To understand agentic commerce, its potential developments this year and its role in the wider financial landscape, this will be the topic of discussion during a panel on day two on 18 March.
Representatives from Visa, Stripe and OpenAI, among others, will intend to solve the compliance complexities of this new age commerce payment service.
Know Your Agent (KYA) has been coined as agentic commerce’s answer to Know Your Customer (KYC), but how will this be implemented, who sets the standards, and will this be universally accepted?
A2A Payments: Enacting on potential
Account-to-Account (A2A) payments have surged in its development and usage in recent times in order to remove third party intermediaries and accelerate the point-of-sale further than before.
But there has been a constant topic of debate regarding A2A payments at event conferences; what is stopping A2A payments’ mainstream adoption? Payment service providers, merchants or consumers?
Figureheads from the European Central Bank (ECB), payabl. and Tink will be the next group of industry officials providing their opinion on the adoption debate during the “Big Promise” panel on day two of MPE.
This is not to say adoption has been disencouraged by both the payments and retail sectors, if anything, Amazon’s adoption of TrueLayer’s Pay by Bank infrastructure to its online checkout in the UK is one of the largest indications of A2A’s growth.
While adoption will no doubt be discussed, Wero’s arrival in 2024 will have payment service providers and merchants debating its early impact as Europe’s homegrown answer to Apple Pay after launching in France and now Belgium.
For A2A to realise its projected potential as an instant checkout solution, adoption amongst merchants and consumers continues to remain vital as the payment method becomes increasingly more optimised.
Embedded Finance’s future involves the whole stack
A payment instrument that has taken off in popularity amongst merchants is embedded finance.
Embedding payments, banking, lending and any other financial services into a merchants’ infrastructure has never been more seamless due to the advancements of onboarding capabilities.
This in turn has been able to unlock new revenue streams for merchants as manually integrating these financial services has been alleviated, as APIs become increasingly more sophisticated.
US Bank and Rapyd representatives, among others, will speak on a panel regarding the “new phase of embedded payments” on day three at MPE on what the future holds for embedded finance.
Developments of embedded finance recently have come through the decentralised finance (DeFi) space. Companies such as Coinbase and Ripple have begun providing Stablecoins-as-a-Service as the appetite to leverage the benefits of near-instant cross-border settlements becomes more enticing to merchants.
But what if merchants can make the integration process even more simpler? What if Infrastructure-as-a-Service can provide everything; from payments to lending, all as one service? This would enable merchants, particularly smaller businesses, to scale quicker and more efficiently when launching to market.
From noise to implementation: Will stablecoins arrive to merchants?
Unsurprisingly, stablecoins will be another topic of conversation at MPE after dominating the event circuit last year.
MPE ponders the question whether stablecoins are “quietly going live”, from use case pilots to a fully integrated payment method among businesses seeking faster settlements on cross-border trade.
While stablecoins have been surging, central bank digital currencies (CBDCs) have also gained traction over the last several years, and the MPE panel discussion on day one (17 March) will question if both digital currencies can co-exoist at the same time, with answers from the ECB as it continues to push for its digital euro.
Representatives from dLocal and Spencodes will also seek answers as to how fiat and stablecoin payment rails can exist in parallel with one another, what benefits this can provide a merchant adapting to an environment that is shifting on-chain.
Stablecoin conversations have not been quiet in the least, but their implementation across large-scale retail sectors this year could fly under the radar.
The blueprint to succeeding domestically and internationally
A payment strategy can be very dependent on regionality; where the merchant is based and what are the preferred payment methods within said region.
The same can be said when scaling internationally. Cross-border payments can unlock new revenue growth opportunities for companies, but if they do not offer Pix for Brazilian consumers – for example – cart abandonment and subsequent loss in customers may prove inevitable.
This is why representatives from JP Morgan, Bolt and Nuvei, among others, attempt to design an international payments strategy during a panel session on day one of MPE.
Aside from payments, compliance and regulatory understanding is also paramount for a new business entering a new market. There is a fine line between recognising these compliance laws, but enforcing them can help a merchant not only continue to operate, but avoid losing a new customer base on reputation.
