At the annual Merchant Payments Ecosystem conference in Berlin, industry leaders and businesses operating in the payments sector convened to share insights and forecast developments within the merchant payments landscape.
The conference focused on key trends, delving into the ways established companies and emerging fintechs are poised to transform the industry. Opening remarks from chairpersons Anna Maj and David Birch hinted at discussions around open banking, generative AI, and cross-border payments, among other topics.
The inaugural panel featured prominent experts such as Atze Faas, payments adviser at Eurocommerce AISBL; Kenny Ebanyat, head of payments and fraud at the NBA; Chris Reid, head of identity at Mastercard; Martina Weimert from EPI Company; and Killian Thalhammer, head of payments at Deutsche Bank, with moderation by Birch.
Reid emphasized the distinction between payments and commerce, stating, “What we excel at here is facilitating economic exchange. Our primary focus must remain on the merchant’s desire to sell and the consumer’s intent to purchase; payments serve merely as the means of that exchange.”
Thalhammer highlighted Deutsche Bank’s significant investments in the digital euro, underlining their commitment to enhancing open finance and open banking capabilities to streamline instant payments.
Ebanyat categorized the NBA as an unconventional merchant that offers monthly and seasonal subscriptions for sports content. He articulated their mission to expand the game’s reach and strengthen fan engagement.
Birch reflected on the burgeoning potential of digital wallets, suggesting that advancements towards smart wallets are imminent. Reid echoed this sentiment, noting how these innovations align with consumer desires for convenience, prompting financial organizations to adapt accordingly.
Upon probing consumer behavior, Weimert remarked, “Research indicates that consumers are seeking greater control over their financial interactions. They desire more agency than is currently afforded to them, hence the advantage of direct account linking.” She emphasized the significance of service offerings for both consumers and merchants.
The panel engaged in a dialogue about alternative wallet providers beyond the major tech players, such as Apple and Google. Ebanyat discussed the NBA’s approach to creating personalized experiences for its subscribers, which fosters deeper connections through innovative service offerings. Thalhammer pointed out the contrasting emotional attachments consumers have with brands versus banks, suggesting that while customers may develop loyalty to brands, their relationship with financial institutions tends to lack emotional depth.
Transitioning to technology, Thalhammer remarked on the industry’s lag in integrating new tools, such as blockchain. He asserted, “The sector faces a considerable backlog in adopting these advancements, and it is crucial to discern which technologies will be valuable and which should be overlooked.”
Reid cautioned against the unending pursuit of new technologies while existing ones remain underutilized, advocating for a balanced approach between innovation and optimization to achieve maximum potential.
Regarding artificial intelligence, Faas cautioned that while AI can enhance consumer experiences and assist in the purchasing process through enhanced interactions, it also poses significant risks, particularly concerning fraud—highlighting the need for careful consideration in its application.
Thalhammer concluded the panel by emphasizing Deutsche Bank’s commitment to prioritizing the merchant perspective within the payments ecosystem.
### The Role of Digital Wallets in Enhancing Public Services
Later in the day, Michalis Michaelides, Director of Sales and Business Development at BPC, delivered a keynote on digital payment strategies tailored for public services. He underscored the importance of digital payments in fostering financial inclusion and facilitating the digitization of public services.
Michaelides articulated how effective digital payment strategies can streamline disbursement processes for social and refugee initiatives. He highlighted the potential economic boost from enabling small and medium-sized businesses (SMBs) to create digital marketplaces, which could reach financially underserved populations.
He stated, “Integrating SMB enablement—whether through private sector initiatives or public-private collaborations—into digital strategies is paramount, as these businesses constitute a significant portion of the global market and employment landscape.”
Using case studies from Latin America and Nigeria, Michaelides illustrated how digital wallets and cards have empowered farmers to access new online markets, thereby generating income.
### Future Directions for Digital Wallets
Gary Munro, Technical Director at Consult Hyperian, moderated a panel on digital wallets, which included experts Simas Simanauskas from Connectpay, Erik Cicilla from the Regional Card Processing Centre, and Michalis Michaelides. The discussion centered on the challenges and opportunities digital wallets present for both established players and newcomers in the payments landscape.
Simanauskas expressed his concerns about the dominance of digital wallet giants like Apple and Google, advocating for the payment industry to prioritize the development of products that enhance the customer experience. He warned that without timely innovation, it may become increasingly difficult to attract new entrants amid the convenience offered by these major platforms.
On the rise of challengers to established services, he pointed to the emergence of super-apps in China, like Alipay, which provide seamless transaction experiences for consumers.
Michaelides concurred, suggesting that stakeholders must reevaluate their approaches to design and strategy to avoid being overshadowed by larger companies. He emphasized the role of identification and biometrics as essential components of the next generation of frictionless payment systems, improving security.
Cicilia discussed the operations of Raipay and highlighted the need for open banking, stating, “We aim to make our features publicly accessible to various applications, not just our own. We have established an open API protocol to enable diverse communication and operational methods.”
Simanauskas concluded by noting the critical importance of regulatory frameworks. He acknowledged the progress made under European regulations while advocating for the implementation of new frameworks to foster further innovation and facilitate the opening up of banking services.