Essential Retail caught up with Paul Thomalla, senior vice president and managing director EMEA at ACI Worldwide, for a quick Q&A session on the changing payments landscape, retailer security and the importance of understanding consumer acceptance when it comes to new innovations. Here's what he had to say:

ER: What are currently the top three priorities for retailers from a payments perspective?

PT: The last few years have brought unprecedented innovation and disruption to the payments world, a trend which is set to continue. Retailers will increasingly come under pressure to make key decisions in regards to their payments strategy. Mobile payments is the big buzz word at the moment but in my view the top priority lies elsewhere. Retailers need to take a look at their core IT infrastructure and ask themselves if it will enable them to compete in this brave new payments world. Does it support all the things customers want today: multichannel shopping, mobile payment options, security, speed of transaction, the list goes on. In short, developing a holistic strategy when it comes to payments should be on top of the list.

Secondly, for many retailers, especially in Europe the question is not only how do I process payments across multiple channels but also across borders. In Europe, each country has its own regulations, industry associations, standards and protocols; every time a new payment solution is introduced in a country, it needs to adhere to that country's specifications and protocols. Depending on the country, some protocols do not allow some functionality, which hampers innovation. And innovation is key. Last year we partnered with Auchan one of the world's largest retailers to build a new SEPA-compliant European card payments platform, the first of its kind in Europe. The new platform will support the new European standard EPAS protocol, which addresses the region's numerous local standards and increasing regulations that have previously stymied growth for retailers.

Finally, security and fraud prevention should be another priority for all retailers no matter in which country and across which channels they operate.

ER: In terms of security and fraud prevention, what are the key things that should be on every retailers' checklist?

PT: Data breaches are always high profile so data protection requires ongoing investment and penetration testing. In today's payment environment, data security and fraud prevention are required at every purchasing touchpoint of the consumer. Point-to-point encryption (P2PE), network segmentation and integrated fraud detection capabilities are therefore critical components to a retailers’ payment strategy and are designed to help lower risks.  

Sophistication among fraudsters continues to evolve; therefore retailers must have tools that can adapt quickly to mitigate fraud.

Finally, the rise of online shopping and the omnichannel customer means risks are potentially on the rise especially with the emergence of completely new risks. These include so-called friendly fraud, GLIT (goods lost in transit), internal fraud and returns fraud. Retailers need to analyse these risks and find new ways to mitigate them.

ER: Security, mobility and speed of transaction are the key things retailers are looking for when it comes to new payments systems. How do you combine the three without compromising one or the other?

PT: For retailers it is important to understand that if the payment experience does not fully support the omnichannel strategy of the retailer, consumer satisfaction and loyalty will be compromised.

An important concept in this context is 'extensibility' – being able to add new services to your existing payments infrastructure without breaking security, reliability or speed. This is a big challenge. For example, if you want your sales assistants to be completely mobile on the shop floor you have to sacrifice an element of security. Or can you be certain that none of your mobile devices will get dropped, stolen, or substituted with fraudulent devices? And if customers are paying for items at various places in the store and receiving their receipts electronically, how can you be sure that goods have been paid for before they leave the store without impacting speed? There are solutions to all of these problems, but some element of risk has to be accepted to give the customer a good purchase experience.

ER: To what extent will innovation in payments be driven by consumer acceptance through day-to-day banking, or will it be the other way around?

PT: It is extraordinary how observers and commentators of the consumer payments industry consistently underestimate the importance of consumer acceptance. Payment processing is not just a baffling arrangement of computer systems – it is also a complex social technology. This requires understanding, acceptance and enthusiasm in a network of participants including consumers.  

The payments world is littered with discarded, great innovations over the last 20 years – anyone remember Mondex? Or Visa Cash? Mass market shifts in payments require a huge investment in education, training and promotion. Perhaps the payments industry should be looking more at Behavioural Economics principles to understand what it takes to nudge consumers towards innovative payment techniques.

ER: Tell us what key solutions ACI Worldwide is providing for European retailers in 2015?

PT: UP Retailer Payment solutions offers retailers a flexible, secure payments platform that supports consumer payments from all channels. Whether the retailer is processing high volume credit and debit card based payments from thousands of retail locations, or deploying a pre-paid solution via a mobile wallet, ACI provides a platform capable of supporting these needs.

ACI also offers tokenisation, P2PE and network segmentation options plus real-time ecommerce card not present (CNP) fraud prevention and detection. In addition, ACI provides the broadest set of business choices available in the retail industry when it comes to selecting the point of sale and pin entry device manufacturers and processor, acquirer and networks for their payment needs. The solution provides retailers with a secure omnichannel payments solution which enables retailer to take control of their payments business by providing independence from control by third-party providers.

When it comes to payments solutions we provide more choice and flexibility than others. We can scale our solutions from the smallest to the largest retailer and we do all of this safely, using the latest P2PE and CNP technologies. 

ACI Worldwide is the sponsor of the Payments Theatre at RBTE 2015, which takes place at London's Olympia between 10-11 March. Click here to check out the conference programme.

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ACI Worldwide

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