Vendorcom, the cards and payments community, is ten years old this month and at its conference at the start of September, members and delegates heard many familiar themes covered and gained a glimpse of what the future might hold in the ever-changing merchant payments ecosystem.

Opening the conference and echoing the words of Dr Martin Luther King, Paul Rodgers, chairman and founder of Vendorcom, said: "Back then I had a dream and, today, that dream is only part realised. Perhaps it can never be fully achieved but that should not be a reason to lose sight of those idealistic hopes that one day the world of merchant payments will be judged not by the quality of its hyperbole but by the value of what it offers to merchants, citizens and consumers."

The conference dealt with the most topical issues facing today's merchant payments sector, ranging from disruptors, mobile payments standards and loyalty, identity and authentication, innovation, data privacy and the regulatory environment with presentations from ACI Worldwide, Aletheia, Dentons, Ixaris, Mobius Networks, Nanjee, Proxama and Weve.

The day also saw six CEOs and founders present and then take questions from delegates in an hour long Q&A panel session on their experiences and perspectives of the European payments scene. Topics covered included:

  • Big data ("so cheap and easy to store data, so why wouldn't you, even if you're not going to do anything with it today");
  • Access to funding ("there are billions available right now for the right payments initiatives");
  • 3Dsecure ("it's broken and unfit for purpose");
  • The challenges of newcomers working with the legacy players ("unfortunately it's a necessity given their existing power but, over time and with the right regulatory pressure, their relevance will fade");
  • Money remittance ("it's a travesty that the average fee for money remittance  today is 9% yet the regulators are fixated with the international card schemes' interchange fees leaving the almost risk free remittance market to hurt the poorest in society").

The three big issues to stand out on the day were: the increasing focus on identity and authentication as a basic foundation for everything that will happen in payments in future, the activities of regulators in the sector, and the need for a collaborative, merchant centric view of how to deliver solutions to the market.

On the topic of identity and authentication, Rodgers commented: "Chip & PIN is great for face to face transactions using conventional payment terminals but there's a great debate to be had about what's right for the hundreds of other channels that now exist beyond the in-store world.

"Static passwords are no longer fit for purpose, but as we see biometric, geo-location or dynamic authentication technologies being applied, the reality is dawning that no single approach offers a panacea. The real value of correctly identifying and authenticating the customer goes way beyond simply securing transactions to providing a valuable way for merchants to effectively personalise their customers' experience."

He was also equally vocal on the role of regulators, saying: "Merchant payments is part of any nation's critical infrastructure; we mess with it at our peril and I agree that the regulators will want to take an interest. The relative naivety of their recent pronouncements however, particularly HM Treasury in the vacuous consultation paper that they put out earlier this year and the European Commission in their restriction of multilateral interchange fees to 0.2% for debit and 0.3% for credit transactions, suggest that their understanding of how payment processes work in the citizen/consumer realm is fundamentally flawed.

"For instance, that there is little regulatory attention paid to the average 9% charge for money remittance (a relatively risk free environment for processors) suggests that regulators are not being even handed. As a consequence, they risk undermining the infrastructure that will be fundamental to economic recovery."

On the subject of collaboration, Rodgers added: "This has been the motivation for Vendorcom since the start; the best way to built a market is to offer a strong future-proof infrastructure that merchants can be confident in. It also provides the basis for solutions providers investing in innovation and will result in an even stronger competitive market that will provide the variety of solutions that such a wide merchant market requires as they try to engage the consumer more creatively and cost effectively."

Judging by the questions from the floor during the day, the merchant community is also keen to know about how the future will pan out. They were also happy to question some of the assertions of the speakers in what turned out to be some very interactive sessions. A wide range of merchant interests were represented by organisations such as Burberry, DHL, Direct Line, Firmdale Hotels, Hilton, iNTERTAIN and many others.

A clear route map seems to be a common interest for merchants. With the future of merchant payments looking almost as cloudy as it did ten years ago and with even more influencers keen to have their say, this sort of event where independent, authoritative, credible information is shared openly is to be welcomed.

The next Vendorcom Quarterly Thought Leadership Conference is on Tuesday 10 December.

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