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RS Cards and payments<br />
18 RS February - March 2013<br />
Future of payments<br />
Paul Rodgers, chairman of Vendorcom,<br />
tells us why it’s imperative to visit this<br />
year’s Cards & Payments Solutions<br />
conference. The event will take place<br />
alongside RBTE at Earl’s Court 2 on<br />
Tuesday 12 and Wednesday 13 March<br />
The Vendorcom Cards & Payments Solutions conference at<br />
this year’s RBTE will address key retailer concerns regarding<br />
the future of consumer payments. Paul Rodgers,<br />
chairman of Vendorcom, discusses what’s in store in the four<br />
conference sessions and warns of the risk that so many new<br />
payments initiatives might lead to solutions overload resulting<br />
in retailers missing the silver bullet that may be the difference<br />
between staying alive or going the way of Jessops, HMV or<br />
Republic.<br />
“Being at the centre of the European Cards & Payment scene<br />
is an exciting place to be at the moment! If you believe the<br />
enthusiastic pronouncements of the host of solutions providers<br />
who are, every week, coming up with new ways to take payments<br />
from consumers, we’re barely going to recognise today’s<br />
instore or online checkout and payment process in a few years’<br />
time.<br />
“Ten years ago, we saw huge changes with the introduction<br />
of Chip & PIN. For a year after the announcement in 2002 of the<br />
January 2005 implementation deadline, we had a chaotic freefor-all<br />
with solutions providers understandably embarking on a<br />
massive market push. Thankfully a more structured programme<br />
emerged and a more collaborative, coherent approach ensured<br />
that, through 2003 and 2004, a clear route map emerged enabling<br />
retailers/merchants to get on board quickly and achieve<br />
mass adoption by early 2005.<br />
“As a result of the success of the Chip & PIN implementation,<br />
there is now an assumption by many that every new payments<br />
initiative will take three to four years from launch to mass<br />
adoption. However, this year sees the eighth anniversary of the<br />
June 2005 compliance deadline for PCI DSS and five years since<br />
the launch of contactless payments with wholesale adoption still<br />
seeming a long way off and, indeed an unreasonable expectation.<br />
Yet the consumer payments industry naively puts such<br />
initiatives in the same category as chip & PIN and bemoans the<br />
relatively weak uptake, particularly of contactless payments.<br />
“The reality is that, post Chip & PIN, the cards & payments<br />
industry’s initiatives have simply presented options where, even<br />
though there has been unprecedented collaboration amongst<br />
suppliers to develop standards and bring a strong technical solution<br />
to the retail market, the dynamics of the chip & PIN roll-out<br />
simply do not apply. This initiative was unprecedented, and one<br />
that is unlikely to be repeated in the foreseeable future. We had<br />
a global standard with a clear mandate for change, a deadline<br />
for compliance, an industry-wide technical programme, common<br />
communications to merchants and, importantly, to consumers,<br />
all underscored with a large regulatory threat lurking in the<br />
background. Even PCI hasn’t had this level of singular focus.<br />
“So, whilst Chip & PIN was a ubiquitous success, we will do well<br />
to recognise that the PCI and contactless payments initiatives<br />
are rolling out based on largely market driven motivations (with<br />
perhaps a little carrot for early adopters in the case of contactless).<br />
There are further lessons to learn as we look forward to<br />
emerging mobile and NFC payments, the wave of micro-merchant<br />
smartphone dongle solutions and the promise of non-card<br />
based, consumer driven transactions with no requirement for<br />
payment terminals in store or card entry screen for online payments.<br />
“There are so many new payment possibilities being presented<br />
and so many funding organisations chasing new payment innovations<br />
that the situation is likely to become even more diverse<br />
in the coming months. Since many of the new players only make<br />
passing reference to the legacy cards and payments ecosystem<br />
it is increasingly difficult to know exactly how such innovative<br />
solutions fit into such the traditional landscape.<br />
“The reasons that saw Vendorcom emerge as a collaborative<br />
community in 2003, most notably ensuring common approaches<br />
to global payment standards, improving communications<br />
amongst solutions providers and promoting the delivery of market<br />
relevant solutions and credible messages to merchants, are<br />
as valid as they ever were. The potential problem is that many<br />
of the emerging initiatives have little to do with global standards<br />
and merchants are now crying out for a clear route map before<br />
investing, asking, ‘Is this solution going to be here in a year’s<br />
time and how do I integrate it with my more conventional existing<br />
infrastructure’.<br />
“The current retail reality is one of staying alive! Payment<br />
solutions have the potential to be of strategic importance to<br />
this business imperative through fraud reduction and improved
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