Edgar, Dunn & Company (EDC) was asked by the MPE organisers to chair four different panels during the 2022 event. Volker Schloenvoigt, head of the Acquiring Practice at EDC, and Mark Beresford, head of the Retailer Practice at EDC, jumped at the chance to support Europe’s leading event about payments acceptance. The four panels covered diverse topics relating to the acceptance and processing of merchant/retailer payments. Innovation in marketplaces and platforms, and in omnichannel retailing were two of the panels in focus.
Omnichannel the new normal
- Mark Beresford, Edgar, Dunn & Company – Panel Chair
- Moshe Selfin, Finaro
- Sophocles Ioannou, OpenWay
- Dan Carr, Flagship Advisory Partners
- Michael Lane, Token
The panel debated the impact of the pandemic, but first, there was a definition of omnichannel. There was no doubt there were different definitions around amongst the panellists and different definitions amongst the merchants. What may be omnichannel for a grocery store is not omnichannel for a fashion retailer. It was discussed that omnichannel was the ability to identify the customer across the different touch points with the merchant. Omnichannel must also include convenience for the customer, security, and frictionless payments. Omnichannel must be on the customer’s terms.
Following the global COVID-19 pandemic, there is a debate about whether we will see a ‘new normal’ with significant changes to consumer behaviour or consumers returning to their usual shopping habits. At Edgar, Dunn & Company, we believe there is something in between. The impact of COVID-19 has resulted in a big shift in the customers’ expectations, and their shopping experiences with merchants have changed. Interactions that were not online pre-COVID have moved online. Post-COVID, there will be some consumers preferring to return to pre-COVID shopping patterns, but there will be a meaningful segment of consumers, more than half of them, based on research, who will not return to their pre-COVID shopping behaviour.
It was agreed that there would be an impact because of the pandemic – there will be a greater focus on ecommerce / remote payments/contactless payments. The customer journey will be varied and more complex, new customer journeys through the different touch points of a transaction covering the happy outcomes as well as the unhappy outcomes in the customer’s journey. Such as the need to better deal with returns, refunds, and exceptions to the normal customer journey.
Tokenisation and network tokens were discussed, and it was acknowledged that these would help merchants someway in their own development roadmaps to be fully omnichannel or at least closer to supporting the omnichannel behaviours customers are pursuing. One of the questions from the audience was related to the M&A of payment service providers and how this can interrupt the service for merchants.
Another question was related to open banking and how it relates to omnichannel. Open banking will be able to enable an omnichannel world – open finance and open banking will be right in the right use case. QR codes were another example, where the payment could be initiated at the table in a restaurant or in different situations, which results in an open banking transaction.
The panel’s closing question was “how does the panel envisage omnichannel in five years’ time?”. The answers varied but the common theme was around the use of consumer data, to help customers through the journey, identify of customers and including customer preferences. The concept of channels will gradually disappear, and we are starting to see this today with the blurring of the line between online and offline commerce.
Marketplaces and Platforms
- Mark Beresford, Edgar, Dunn & Company – Panel Chair
- Laura McCracken, Accenture
- Michalis Michaelides, BPC
- Ralf Krauß, Idealo
- Malte Huffmann, Mondu
Marketplaces and platform economies are the key payment trends for 2022, not customer for business-to-consumer commerce but especially for business-to-business commerce where we are seeing the greatest digitalisation of the financial services ecosystem. Modular platforms for managing all payment challenges, buyer/seller onboarding, pay-in/pay-outs, regulatory constraints, payments acceptance, financial reconciliation, fraud, and optimisation of internal processes were some topics that the panel wanted to cover.
A best practice of marketplaces and platforms was discussed amongst the panel, and it was stated that payment is the first thing to get right. The business-to-business marketplaces will allow a more efficient ecosystem for commerce, and building a greater sticky customer proposition is key best practice. Also, how marketplaces evolve, from merchant to marketplace will also influence how it drives the business. The value proposition is a key best practice that must be defined and articulated to build on the network effect.
Super apps and super wallets were discussed, and how they developed in the East – such as WeChatPay and Alipay – and how they will be developed in the West will be different. In the West, it is more likely to start with the wallet. Regulatory challenges of a marketplace and platform were also discussed and the need to protect consumer and merchant funds – so that buyers and sellers are ensured their funds are processed appropriately within a compliant framework.
Technology providers of marketplaces and platforms will be key, and there is a long way to go, and growth is expected to be significant, but then there will be consolidation in the platforms. Who will be the winners and losers has yet to be seen. The opportunity exists in an open payments world to create a whole new way of servicing merchants, agents, and end customers. The future of marketplaces and ecommerce platforms will be of great interest for MPE.
The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).