Advancements in digital technology continued to shape the payments industry in 2015 as mobile,

 Digital Payments Report 2016

online and other digital forms of payments moved into the mainstream.

From mass transit to gas stations and supermarkets, businesses of all sizes, across all the regions surveyed, now accept various types of digital payment, making paying for goods and services quicker, but above all, easier for the consumer.

While this seems very encouraging, what does the landscape look like beyond 2016?

The Digital Payments Report set out to survey and evaluate all the Payment industry stakeholders from the three major payments markets in the world: Americas, Europe and Asia Pacific. The industry survey respondents were largely senior executives from Card Issuers and Acquirers, Retail Banks, Financial Institutions, Payment Networks, Mobile Network Providers and FinTech suppliers.

The responses across the regions offer a unique insight into how the Payments industry is evolving in 2016 and beyond.

Download the REPORT HERE

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While the main goal is to create a harmonised Europe-wide payments market, this Regulation also aims to help

The impact of the interchange fee regulation: a Processor view

cardholders make informed decisions when it comes to their payment methods. Additionally, it will contribute to cost reductions for consumers and retailers, and encourage competition for a broader availability of payment methods.

This also means that acquirers and issuers will take this opportunity to develop or modify their customer offers by adding attractive value added services. This will, therefore, impact processing as it will need to adapt and support the new fee models and associated business rules and to provide extended offerings with innovative services. Hence all stakeholders and, in particular, the processors will be challenged on their capacities and capabilities to operate with pan-European reach.

In this article, which first appeared in the EPC news letter, Ulrich Engelhart, Worldline’s Head of Payment and Industry Analyst Relations, outlines Worldline’s vision on the long term implications of the IFR for processors.

Impact of the Regulation on processing

Processors provide solutions that are compliant with the supported brands’ scheme rules and that answer their customers’ needs.

The Interchange Fee Regulation (IFR) has an impact on processing, as it will need to adapt and support the fee models and associated business rules. It is expected that some acquirers/issuers will take this opportunity to develop/modify their customer offers by adding attractive value added services, for example.

Schemes will publish adapted scheme rules with updated interchanges according to articles 3 and 4 of the Regulation. Additionally, possible domestic interchanges could add a level of complexity as it is still unclear which Member States will apply them and when that decision will be taken.

Acquirers will probably adapt their commercial offers to their merchant customers; which could also require some adaptation/reconfiguration of the billing components.

Article 8 of the Regulation on co-badging and choice of payment application mainly impacts acceptance processing (e.g. physical point of sale (POS), card not present environment), but not acquiring processing.

The new concept of product type identification (pre-paid, debit, credit, commercial), introduced by article 10, has to be integrated in the card management chain on the issuing processing side (e.g. preparation of card personalisation data), amongst others, in order to ensure information is encoded in new cards. Product identification in environments where the chip on the card is not used (i.e. physical POS not accepting chip cards, card not present environment) could require use of Bank Identification Number (BIN) tables with possible interaction between acceptance environment and acquiring processor.

The requirement, expressed in article 12 of the Regulation, for acquirers to provide merchant customers with detailed transaction information (or aggregated if agreed upon by merchants) on interchange fees may also have an impact on reporting solutions provided by acquiring processors.

Article 7, on the separation of schemes and processing activities, is beneficial to processors as it reinforces principles allowing processors to use alternatives to schemes’ default authorisation, clearing and settlement solutions (e.g. bilateral or intra-processor solutions) and also should prevent schemes from selectively offering better services to parties using their processing infrastructures.

We look forward to the more detailed regulatory standards that the European Banking Authority should publish in the near future on this matter. In this context, as a processor, we also welcome the business principles and requirements defined by the Cards Stakeholders Group (CSG) in Book 7 – Card Processing Framework – applying to all actors of the value chain (e.g. schemes, acquirer/issuers and their processors, specification providers) aiming to further facilitate an open and transparent market, which maintains competition, improves efficiency and fosters interoperability.

The other part of article 7, requiring processors to interconnect with other processors through the use of standards, is more ambiguous. In order to ensure full reachability – acceptance of any card from any issuers – acquirer processors are already connected to solutions ensuring transactions can be exchanged with any issuers of the supported brands.

Long term impact of ongoing self-regulatory activities

Regarding the Single Euro Payments Area (SEPA), important initiatives related to standardisation of SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) have taken place. The focus is now more on SEPA for cards. The CSG initiative is focusing on standardisation of card payment transactions. The proposed standardisation and compliance ecosystem will aim at easing the deployment, by specification providers, of generic implementation specifications (e.g. specifications of the protocol between POS and acquirer processor) open to any SEPA scheme (and thus not specific to a certain card brand).

The principle being that the Volume produced by the CSG contains functional and security requirements, that the implementation specifications produced by the specification providers must be compliant with the requirements of the Volume and that the products (terminals, processing solution) developed by vendors (terminal vendors, processors) are compliant with implementation standards. The active involvement of representatives from the entire value chain, such as schemes, payment service providers, processors, vendors and retailers, and the relationship established with the regulatory bodies (European Commission, European Central Bank, Euro Retail Payments Board) should ease the development of more standardised solutions. Convergence towards a reduced set of implementation specifications in the various domains of the value chain will mainly be market driven.

It is already the case, for instance, in the card-terminal domain with the EMV contact specification. It is expected that convergence will also apply in the field of the POS-acquirer domain with initiatives like Nexo (Electronic Protocols Application Software – EPAS protocol) and Acquiris (Common Terminal Acquiring Protocol – CTAP protocol). On the acquirer-issuer side, changes may occur, taking into consideration the evolution of ISO 20022 standard and related initiatives (Acquirer to Issuer Card Messages – ATICA). This evolution will require schemes to adapt their default authorisation, clearing and settlement solutions. This exercise would only make sense if a real alignment happens, rather than the deployment of new ISO 20022 based solutions, each with their own specificities, similar to what happened with ISO 8583. Finally, it is not yet clear if there will be, in the short term, a positive business case for schemes and processors to migrate existing solutions to new ones.

Innovation in payment cards remains important mainly to ensure new user experiences via mobile or remote payments (Host Card Emulation (HCE), wallet, tokenisation…). Of course, innovation cannot be subjected to, or constrained by, standardisation objectives and should be able to be based on new specific technical solutions. Nevertheless, it is expected that, once an innovation becomes mature or has been adopted by several schemes, some standardisation should take place in order to achieve an open and competitive market.

To summarise, processors may expect, in the coming years, some move to a limited set of standard implementation specifications in some domains of the value chain (e.g. POS-acquirer, acquirer-issuer). Nevertheless, processors will continue to support specific implementation specifications, as new innovative services are being introduced and because the above-mentioned evolution is expected to be market driven.

Last but not least, besides the solutions provided by processors, which are aligned to scheme rules for payment card processing, there are also several solutions, independent from scheme rules, which aim to provide additional services to customers (e.g. contract management, invoicing, reporting, servicing, …), therefore, leaving room for differentiation and new specific developments in a competitive environment.

Market evolution

Harmonised fees and, more importantly, the separation between schemes and processing will open the market for issuers and acquirers to select the most suitable processing suppliers in terms of market coverage, functional scope and competitive pricing.

New interparty transaction processing

Processors will offer services to promote European interconnection of different schemes using their knowledge of European standards and their intermediation software as an extension of their functional scopes. This new interparty transaction processing (enriched Automated Clearing House) service will become a true alternative to single branded transaction processing by schemes. It will also empower issuers with loyalty programs and card-linked offers, with high-end data analytics as well as advanced fraud detection services.

Scale matters

At Worldline, we anticipate that profitability from standard card processing services will continue to decrease. This trend can be compensated by increasing transaction volumes, thanks to higher card acceptance and pan-European reach. To stay price competitive in commodity processing, economy of scale is crucial. Processors are forced to operate scalable IT platforms, that can support multiple languages out-of-the-box at a low cost, and to manage fixed operational costs efficiently.

Omni-channel processing

In addition to their traditional card business, processors will have to support alternative and innovative payment instruments, such as Online Banking ePayments or payment wallets, to provide omni-channel ecosystems. With the integration of a global payment platform, clients will benefit from synergies, such as fraud management, authentication, data monetisation, etc. Therefore those processors operating a global infrastructure, which includes a wide range of payment instruments and innovative services for the entire European territory, will be more attractive business partners as they allow their clients to differentiate in the market and to create new revenue streams.

Outsourcing trend  

Today, we face a high level of insourcing, with 29 out of the top 40 commercial acquirers¹ and around 50 percent of issuing processing still insourced by banks². Analysing the business case in light of IFR, the financial institutions will be under more and more pressure to divest their payments portfolio processing and outsource it to a well-positioned business partner in Europe.

Consolidation

As the payment market is highly fragmented with more than 50 payment providers and processors, we expect that the current ongoing consolidation trend will be reinforced. Continuous investments in advanced and scalable end-to-end infrastructures, managing fixed operating costs and being present with pan-European reach will lead to new business models and ecosystems resulting in mergers and acquisitions, joint ventures and new partnership models. It can also be expected that some big emerging players, entering the market, may look for cooperation models with established ones to allow smooth transition of the consumer experience. The European processor landscape will change accordingly.

Conclusion

Given the changes described in this article, we believe that this Regulation will not impose important changes in functionalities and services offered by processors, but will impact revenues of most issuers; this will, in return, increase cost pressure on processors. Furthermore, the CSG’s ongoing initiatives should ease the deployment of a certain number of technical standards (e.g. POS to acquirer protocol) opened to several schemes. The adoption of these new standards will be market driven and adopted accordingly by processors. Additionally, the separation of scheme and processing activities will aim to reinforce a fair and competitive market for processors even if competition from schemes will remain challenging. Finally, in this competitive environment and independently of the Regulation, processors will continue to follow market evolutions such as the deployment of new innovative solutions and services, and cost improvements through the increase of operational volumes and consolidation.

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¹ As measured by number of bank transactions. Source: The Nilson report (2013)

² As measured by revenue. Source: First Annapolis (2013)

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The ways in which we pay and are paid are changing. Apple Pay has been launched in the UK, Barclays has announced that it will launch Android-based mobile payments later this year, and we expect Samsung and Android ‘Pays’ soon.

‘Omnichannel’ has moved from being a buzzword to a reality, as people buy using not just

The impact of the interchange fee regulation: a Bank view

one but a variety of channels. These changes have been enabled by the rapid evolution in shopping behaviour, and the widespread adoption of smart mobile devices.

While these changes have been going on, the European Union has substantially altered the regulatory environment for payments. At the heart of this has been a significant drop in the debit and credit card interchange fee.

In this article, which first appeared in the EPC newsletter, Alan Ainsworth, Director of Government Relations for Barclays, outlines two reasons why these regulatory changes could speed up, rather than de-rail, these emerging payments trends. First, regulatory certainty helps the industry move forward and second, there is no longer a clear financial distinction between cards and other forms of payment that could drive investment decisions.

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European payments are being hit by several disruptive forces, including heightened levels of innovation, competition and regulation.

One of the more significant changes is the European Union Regulation on the Interchange

The impact of the interchange fee regulation – a card scheme view

Fee for card based transactions, also known as the IFR. This article will not describe what is in the Regulation as plenty of literature on the topic is widely available. Instead, it will focus on the commercial implications as well as pointing out some critical issues that it creates.

In this article, which first appeared in the EPC newsletter, Marc Temmerman, Director European Affairs at Visa Europe, outlines the impact the IFR will have on card issuers (who will need to re-assess their card portfolios) and acquirers (the IFR will lead to a broader acceptance of credit cards, especially in areas where acceptance had been limited so far). He also focuses on the issues card schemes will need to deal with, raised for instance by the IFR definitions of ‘commercial cards’ and ‘cross-border payment’.

The Interchange Fee Regulation (IFR) is much more than a few articles capping interchange fees for debit and credit cards. The regulators have included a series of ‘business rules’ dealing with a variety of issues.

The post The impact of the interchange fee regulation – a card scheme view appeared first on Accourt Payments Specialists.

This new law, proposed by the European Commission in July 2013, enhances consumer protection, promotes

EU agrees to adopt revised Payments Services Directive (PSD2)

innovation and improves the security of payment services. PSD2 is the latest in a series of laws recently adopted by the EU in order to provide for modern, efficient and cheap payment services and to enhance protection for European consumers and businesses.

Commissioner Jonathan Hill, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “European consumers want to know that their payments are safe when they shop or make a payment online. The new Payment Services Directive will ensure that electronic payments in Europe become more secure and more convenient for European shoppers.

This legislation is a step towards a digital single market; it will benefit consumers and businesses, and help the economy grow. I want to thank the European Parliament for the work it has put into reaching this agreement, and pay tribute to the work of rapporteur Antonio Tajani, Vice-President of the European Parliament.”

Commissioner Margrethe Vestager, responsible for competition policy, said: “We have already used EU competition rules to ensure that new and innovative players can compete for digital payment services alongside banks and other traditional providers.

Today’s vote by the Parliament builds on this by providing a legislative framework to facilitate the entry of such new players and ensure they provide secure and efficient payment services. The new Directive will greatly benefit European consumers by making it easier to shop online and enabling new services to enter the market to manage their bank accounts, for example to keep track of their spending on different accounts”.

Following the Parliament’s vote, the Directive will be formally adopted by the EU Council of Ministers in the near future. The Directive will then be published in the Official Journal of the EU. From that date, Member States will have two years to introduce the necessary changes in their national laws in order to comply with the new rules.

Some of the changes that the new rules introduce are:

• Introduction of strict security requirements for the initiation and processing of electronic payments and the protection of consumers’ financial data;
• Opening the EU payment market for companies offering consumer or business-oriented payment services based on the access to information about the payment account – the so called “payment initiation services providers” and “account information services providers”;
• Enhancing consumers’ rights in numerous areas, including reducing the liability for non-authorised payments, introducing an unconditional (“no questions asked”) refund right for direct debits in euro; and
• Prohibition of surcharging (additional charges for the right to pay e.g. with a card) whether the payment instrument is used in shops or online.

For more information:

http://ec.europa.eu/finance/payments/framework/index_en.htm#151008

FAQ

http://ec.europa.eu/finance/payments/framework/index_en.htm

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On 2 June 2015 the final compromise text of PSD2 was released. The updated PSD2

Update on changes to the new Payment Services Directive (PSD2)

broadens the scope of PSD1, captures a wider range of payment transactions, and also addresses some of the concerns raised during the legislative process regarding questions of liability.

Payment service providers (PSPs) will have to ensure that they comply with its provisions by the transposition date around end-2017. In this article, which first appeared in the EPC website, Maria Troullinou of Clifford Chance LLP looks at the key changes that PSD2 will introduce and at how the text has evolved since the initial Commission proposal was published in the summer of 2013.

A similar structure, a much broader scope

The new Payment Services Directive (PSD2) retains the same basic structure as the original Payment Services Directive (PSD1). PSD2 is divided into six titles, each of which focuses on a different subject-matter. Accordingly, title I covers scope and definitions, title II deals with the authorisation and regulation of payment service providers (PSPs), title III focuses on transparency, title IV establishes the respective rights and obligations of payment service users (PSUs) and PSPs and titles V and VI set out provisions on delegated acts and implementation. In addition, the different categories of payment service are set out in the Annex.

Despite retaining the same basic structure, the reach of PSD2 is broader than its predecessor. This is because of the expansion of the territorial scope provisions and the simultaneous narrowing down of the exemptions (commonly known as the ‘negative scope provisions’).

Territorial scope

Most provisions of title III and title IV of PSD2 will now apply to a broader range of payment transactions. Specifically, transactions in non-European currencies where both the payer’s and the payee’s PSP (or the sole PSP in the transaction) are located in the European Union (EU) will be caught, as will ’one leg out’ payment transactions in all currencies (i.e. where only one PSP is located in the EU).

‘One leg out’ transactions were outside the scope of PSD1, but PSD2 now brings them in scope “in respect of those parts of the payment transaction which are carried out in the Union”. This wording operates as a limit to the reach of PSD2 and seeks to offer some comfort to PSPs who would not be able to fulfil their obligations in respect of transactions (or components thereof) taking place outside of the EU over which they have no control (e.g, because these are subject to foreign systems and rules). PSPs will need to carry out an impact analysis and assess which parts of each transaction qualify as having been “carried out in the Union”; in the absence of guidance as to the precise meaning of this wording, this may not be a straightforward exercise.

Negative scope

PSD2 amends some of the exemptions established under PSD1. Changes to the “commercial agent” exemption attempt to address the divergent interpretations taken by some EU Member States, making clear that the exemption applies when agents act only on behalf of the payer or payee (not both).

Where agents act on behalf of both parties (e.g. in respect of e-commerce platforms) the exemption will only apply in cases where the agent does not come into possession, or have control of, clients’ funds.

Moreover, it will no longer be possible to use the same payment instrument within more than one limited network, or to acquire an unlimited range of goods and services and therefore the “limited network” exemption will now only be available to genuinely small networks. PSD2 also limits the scope of the mobile device content exemption to individual payments that do not exceed 50 euros and, on a monthly basis, transactions not exceeding 300 euros in aggregate per subscriber.

The Automated Teller Machine (ATM) exemption set out in Article 3(o) of PSD1 which was removed from the European Commission’s (the Commission) original PSD2 proposal, has now been reinstated. ATM operators will be subject to obligations to provide customers with information on withdrawal charges — both prior to the transaction and on the customer’s receipt — aiming to enhance transparency.

PSD2 seeks to minimise divergent interpretations around the application of certain exemptions. In certain cases, PSPs pursuant to PSD2 will have to notify competent authorities, so that an assessment can be made as to whether the requirements of an exemption have been met.

Expanding the market

PSD2 creates two new types of PSP, commonly referred to as ‘third party payment service providers‘ (TPPs) and attempts to strike a balance between opening up the payments market and maintaining appropriate security standards for online payments.

PSD2 contains provisions requiring EU Member States to ensure that all payment institutions have access to payment account services provided by banks. This is designed to prevent banks from refusing to open and maintain bank accounts for payment institutions. Although the right of a bank to reject account applications on valid grounds (such as anti-money laundering concerns) would not be affected, banks that decline to provide a bank account to another payment institution will have to explain the rejection to the regulator.

Under PSD2, payment initiation service providers (PISPs) are required to be authorised but are subject to a reduced minimum own funds requirement of 50,000 euros. Account information service providers (AISPs) are expressly exempt from authorisation, but are subject to a registration requirement. Both types of entity have to hold professional indemnity insurance or a comparable guarantee in order to ensure that they are able to meet liabilities arising in relation to their activities, as PSD2 aims to achieve a level of supervision commensurate with the risk such new entrants introduce into the system. PISPs that want to provide different payment services involving holding users’ funds will need to obtain full regulatory authorisation.

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However, the regulatory landscape has evolved and while compliance remains a primary

Can you turn regulatory and payment scheme compliance into a competitive advantage?

focus, there is now an opportunity to gain a larger foothold in the payments value chain and seize a competitive advantage – writes Jamie Merritt, Partner, Accourt – Payments Specialists.

Historically, the ability to become principal members of the payment schemes has primarily been the domain of the traditional bank players. However, as a result of the Payment Services Directive (PSD) and its driving desire to create a broader competitive landscape, opportunities now exist for smaller, more agile organisations and those with bespoke niche propositions to operate in a space usually occupied by the traditional banks. For example, prepaid issuers and PSPs have been able to apply to the FCA for Payment Institution Licences (PI’s) or E-money Licences and principal membership of the Schemes, dispensing with the need for a traditional banking partner.

The rationale and potential barriers to enter into this space have been both commercial and regulatory, as access requires both principal membership of the payment schemes and a licence from the FCA. Whilst these remain unchanged, the opportunity to gain a stronger foothold in the payments value chain – and ultimately a greater share of the revenue pool – is worth consideration.

Traditional issuing and acquiring models have focused on a number of key players taking clearly defined roles.  Both prepaid issuers and acquirer PSPs have changed the landscape here, with additional organisations fulfilling both key operational/regulatory roles whilst providing additional value to the end customer. Consequently, there are a number of points to consider, namely:

1. The regulators and the European Commission are striving towards both greater competition and transparency on the various fee structures
2. With greater transparency, the quest for value provision to the consumer is paramount
3. An increase in the number of constituent parts of the payments value chain, whether from an issuing or acquiring perspective, will ultimately result in increased pricing for the end customer.

Therefore, organisations participating in this space – or those that have an appetite to do so – must have the ability to positively address these points. The key question is: how?

Fundamentally, they need a clear and full understanding of the implications associated with both the Regulator and scheme membership and/or accreditation. These implications fall into three broad categories:

1. Commercial – How can you build a business case that factors in both incremental revenues and the costs associated with regulator and payment scheme approval and on-going management of the business?
2. Operational – What infrastructure changes do you need to make to your business to demonstrate an understanding of, and compliance with, both the application and day-to-day management of the regulatory and scheme requirements?
3. Compliance – How can you demonstrate that the written policy and procedural documents are a living, breathing part of the company’s DNA?

It is also imperative to evaluate how responses to these questions will be viewed by a regulator. The FCA has summarised its role as four key functions:

• Regulation – A supervisory role of the overall conduct of regulated companies
• Best Practice – Upholding the highest operational and ethical standards
• Protection – Ensuring customer protection
• Enforcement -Taking the required punitive action against organisations who fail to meet these standards

The FCA’s overall objective is to drive better consumer protection, greater integrity of the payments system and enhanced customer experience by increasing competition. Consequently you will need to demonstrate regulatory compliance in line with all the JMLSG guidelines and all legal requirements through both the application phase and on-going management of the day to day business.

A similar level of due diligence is also required to support principal membership applications with the individual payment schemes, either as an acquirer or an issuer. The development of the supporting business case is key, both from the perspective of potential collateral requirements and in demonstrating a comprehensive understanding of the compliance obligations and fee structures.

Once you understand the rationale to embark on this journey you will need to work through how to best achieve the desired result.  The reality here is that this is extremely difficult to do well.  A critical factor is the selection of the right partner to assist you with the development of this road map and to help navigate through this extremely complex commercial and regulatory maze.

How Accourt can help:

• Assist in the development of the requisite supporting business case
• Develop a risk assessment and gap analysis on the supporting operational infrastructure
• Review and/or create supporting operational procedural documentation, including all the required regulatory and compliance documents
• Support and manage the application process to the regulator and provide all subject matter expertise
• Create supporting documentation for principal scheme membership
• Manage the application process
• Provide subject matter expertise and provide support for the scheme risk review
• Provide subject matter expertise and provide support for the go-live project

The post Can you turn regulatory and payment scheme compliance into a competitive advantage? appeared first on Accourt Payments Specialists.

First, the headline successes. Fraud conducted in the face-to-face retail environment continues to show a healthy decline trend (down 14% on the previous year) with card ID theft (down 19%) and cheques (down 35% off a rapidly decreasing base) also showing notable declines.  These figures show an industry that continues to tackle some of the key fraud issues head-on, however, there are still significant challenges that need to be addressed, writes Vaughan Collie, Partner, Accourt – Payments Specialists.

On the downside, e-commerce and online banking continue to be areas of material concern.

E-commerce fraud has increased by 14%, continuing its worrying upward trend. These figures show an above average fraud-to-sales ratio (i.e. a common industry indicator of how much fraud loss is experienced for every unit of sales) in an industry where online commerce continues to grow exponentially and, with the increasing popularity of commerce through mobile devices such as smartphones and tablets, this remains an area of significant concern.

Annual fraud losses on UK-issued cards 2008 to 2014 (Source FFA UK)

Online banking fraud has also shown an eye-watering increase of 48%.  One of the key drivers of this is a criminal element adept at basic, low-tech social engineering, preying on unsuspecting, sometimes gullible and vulnerable consumers – making this type of fraud relatively difficult to defend against (especially with legacy fraud management products and techniques).  This is primarily due to the ability of the criminals to bypass the safeguards put in place by the banks and other financial institutions once they’ve stolen sensitive information and/or credentials from consumers via these social engineering techniques.

It is not difficult to see the common element between the highest impact fraud losses is the underlying online ecosystem.  This ecosystem remains popular with criminals due to its inherent detachment from face-to-face interactions (often perceived as more risky) and relatively easy attack scalability coupled with, perhaps most importantly, the relative ease of exploiting human fallibility, especially in technology-enabled channels.

Fortunately, there are a number of advanced tools and techniques that service providers in the online ecosystem can employ to detect, mitigate against and, ultimately, stop future attacks.  However, there are so many products and services available in the market place and this makes it extremely difficult to determine which products, services, tools and techniques are most appropriate and effective at addressing the prevailing threats.  Many of the products and services have been available for a long time and have failed to adapt to the rapidly changing landscape of threats.  Technology and products that used to be good not that long ago are now less effective.

Annual online, telephone banking and cheque losses 2008 to 2014 (Source FFFA UK)

Furthermore, the P&L challenge to fraud managers is (rightly) changing dramatically.  Whereas fraud management was traditionally seen as a necessary cost of doing business, with very limited ability and budget to materially and positively impact an organisation’s fortunes, modern technologies and best practices enable dynamic fraud managers to positively contribute to the bottom line, but without adversely impacting the organisation’s fraud profile.  Done right, this means that an organisation is able to, for example, enable authorisation of more good sales volume and/or decrease the friction of consumer interactions – all without adversely impacting that organisation’s risk and fraud profile.

How can Accourt help?

• As a vendor/product independent organisation, Accourt advises on and conducts many vendor and product evaluations, particularly in the payments fraud management ecosystem.
• Accourt is at the forefront of the emerging and break-through fraud detection and management technologies across all geographies.  With a bedrock understanding of payments across the entire payments value chain, Accourt is consistently able to cut through to and isolate the core value and differentiators of market products, thereby objectively distilling market-leaders from the rest.
• Accourt’s focus is always an integrated approach, most effectively combining the product and operational aspects of the undertaking to its clients’ benefit.
• Recognising that many organisations cannot decommission existing products, Accourt has significant practical and pragmatic experience in how to engineer a complementary fit of newer products and technologies alongside the existing legacy.
• The focus on omni-channel commerce and customer service has further challenged legacy products in the fraud management ecosystem.  Accourt is able to independently identify and advise on those products that have managed to overcome and address this challenge.
• Coupled with industry-leading fraud management knowledge and experience, Accourt is steeped in deep operational knowledge and experience of chargeback optimisation and implementation.  An integrated approach to fraud and chargeback management generally returns greater operational and financial benefit than a ‘silo’ approach.

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The PSR’s aim is to make payment systems work well for the people and organisations

that use them, and deliver greater choice, innovation and competition – according to Leaprate.com.

Payment systems let people pay a deposit on a house, withdraw money from a cash machine, transfer money via smartphone, receive salaries into bank accounts, and much more. They are vital to the UK’s financial system and process in the region of 21 billion transactions worth around £75 trillion a year.

“Today marks a new start for payment systems. Our approach will bring change to the industry, injecting competition and innovation where it is needed most, and will put the interests of the people and businesses that use payment systems front and centre,” comments Hannah Nixon, managing director of the Payment Systems Regulator.

“True, long lasting change will be difficult, but we have the powers and the people to make it happen. Our challenge now – the challenge we share with industry – is to work together to deliver it.”

Today’s publication confirms the three ‘pillars’ of the new PSR’s work:

•  A new and inclusive strategy setting process that really involves users of these systems for the first time. This will be done by setting up a Payments Strategy Forum to develop a long term vision for how payment systems should develop and identify priority areas for the industry to work together where appropriate to deliver this vision;
•  Increasing transparency around how decisions are made, and who is making them. We will shine a light on the control and governance of payment systems, challenge payment system operators to explain how they have listened to people and organisations that use payment systems, and check that operators are really taking payment systems in a direction that meets people’s needs; and
• Improving the way people and businesses gain access to a payment system – whether directly or indirectly – to be clearer and fairer and in a way that fosters innovative and competitive solutions for customers using payment systems.

As well as confirming its final policy, the PSR has published draft terms of reference for two market reviews and announced a card payment systems programme of work. The two market reviews will look at ownership and competitiveness of infrastructure provision; and the supply of indirect access to payment systems. This work will help the PSR gather important evidence to help it make robust decisions that make a real difference to those who use payment systems.

The PSR’s agenda complements work by the Financial Conduct Authority and the Competition and Markets Authority to deliver a more competitive banking industry in the best interests of consumers and the economy.

The new watchdog, whose upcoming launch was first announced in the spring of 2014, has been putting the final touches to its organization before the official start of operations. In January 2015, the regulator added three senior executives – Carole Begent, Mark Falcon and Louise Buckley to its ranks.

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