PA Y T E C H THE FINTECH TIMES
Payments innovation and the race to keep up
An evolving payments ecosystem is leaving businesses on the back foot and constantly playing catch up
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t seems that, in the world of online payments, new products and ideas are being announced and released weekly. The rate and scale at which innovation is happening makes it difficult for companies to stay on top. The pandemic drastically sped up e-commerce growth, and many merchants have had to scramble in order to make sure that their payments’ ecosystems were capable of handling such an increased load. The shock of the Wirecard scandal in 2020 left some unable to accept payments and others rethinking their payment setup entirely. The last two years have been a disruptive time. Changes that were expected to take place in five to ten years, happened in a few months.
WHAT PAYMENT TRENDS HAVE WE SEEN IN THE LAST TWO YEARS?
Open-source technology, such as open banking, has seen significant growth. We can expect to see more products and solutions that will aid account to account payments and more. There are discussions in the UK about variable recurring payments, which is a viable alternative for direct debit payments, something that is expected to be available by the end of this year. It is also likely that we will see it grow in jurisdictions where it is not yet mandatory, with financial institutions embracing collaborative opportunities to create revenue-sharing ecosystems. Another payment method that has gained a lot of traction is buy now pay later (BNPL). A challenger to credit card companies and popular among young consumers makes it not only one of the fastest growing payment methods but also one of most controversial. Its champions say it is a great way for consumers to manage their finances without having to resort to traditional loans which accrue interest. Its detractors believe it glamourises debt. Whatever your opinion, its popularity has exploded and is not expected to die down any time soon. We are also starting to see more big players trying to launch their own super-app, the idea of which is to have an array of digital financial and other services in one place. There is already a selection of successful super-apps in Asia, such as WeChat, AliPay and Grab. Companies that are looking to break into this sort of expansion are Square, PayPal and Google. These applications 12
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Rene Siegl, Founder and Executive Chairman of IXOPAY and IXOLIT Group have also come under scrutiny and regulators are critical of the control and monopoly that they have on the market. However, their one-stop-shop approach is popular among users.
WHAT CAN WE EXPECT FROM THE FUTURE?
It is likely that as more and more countries return to some semblance of normality that e-commerce growth will slow down. However, we can be certain that local and alternative payments will continue to gain popularity. Their appeal is simple: they give wider groups access to online payments, such as those who don’t have bank accounts or those who wish to keep their online activities anonymous. We can also expect to see the use of credit and debit payments reduce further due to the SCA (strong customer authentication) regulations that are now in place.
WHAT DO THESE INNOVATIONS HAVE IN COMMON?
All of these trends and innovations have one thing in common. They can all be connected to, via a single application programming interface (API), with a payment orchestration platform. Many have seen that, in order to provide a stable payments setup that has the flexibility to scale, they need an additional layer. This layer, payment orchestration, has become a buzzword in the payments sphere but one that still causes confusion and needs to be defined.
(CRM), transaction management system (TMS), e-commerce platforms and more, giving a truly holistic experience for the merchant and streamlining not just their payment but also their e-commerce setup.
WHY ADD ADDITIONAL LAYERS TO A PAYMENT SETUP?
The idea of adding an additional layer to a payments setup may seem counterintuitive. However, a payment orchestration platform (also known as an online payment management platform or gateway) has a variety of tools that help merchants manage their transactions, from routing to reconciliation. Industry leading platforms have integrated features such as: ■ ■ ■ ■ ■ ■ ■
PCI card vaulting/ (network) tokenisation Transaction routing Automated reconciliation & settlements Transaction risk management/fraud protection Support of recurring transactions Monitoring & reporting/payment analytics Connectivity to multiple payment methods and acquirers
The platform provides merchants with independence and flexibility, giving them an overall view of their transactions, regardless of who processed them as well as access to a PCI DSS (Payment Card Industry Data Security Standard) certified vault. By having all connections in one place, merchants are able to create risk
the platform, saving time and money on building individual integrations.
THE IMPORTANCE OF TRANSPARENCY
There is a lot of movement in the payments industry. Not only is there constant innovation, there is also a large amount of mergers and acquisitions. This is pretty much the same in any industry, however when it can become an issue for the merchants is when a previously independent company becomes related to a larger organisation which has vested interest in which acquirer or PSP you are using. This may hinder who you are able to connect to and makes you less competitive when it comes to negotiation. A payment orchestration platform is an easy, effective and intuitive way to stay up to date with or even ahead of innovation. It gives flexibility, opportunities to scale, and complete control to a payment stack.
About IXOPAY IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a PCI-DSS certified ‘fintech enabler’, IXOPAY fulfills the needs of large merchants as well as those of ‘white label’ clients: PSPs, acquirers and independent sales organisations. The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, PSPs and alternative payment methods. IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The company has grown from two to more than 80 employees. Website: www.ixopay.com
Introducing Rene Siegl A payments orchestration layer or platform is a technical layer that sits between the merchant and their payment ecosystem, allowing them to connect to as many payment service providers (PSPs) and acquirers as they would like. It can also connect to multiple applications such as enterprise resource planning (ERP), customer relationship management
rules, routing rules, and analyse their data from one easy-to-use interface. Via one API, merchants and businesses have unlimited access to international, local, and alternative payment methods, enabling them to respond quickly to changes in the marketplace and provide their customers with the most relevant options. All connections are built and maintained by
Rene is the founder and executive chairman of the IXOLIT Group. Since 2014, Rene has led the development of the IXOPAY Payment Orchestration Platform, which addresses the global payment scaling needs of online merchants and licensed payment institutions. Linkedin: www.linkedin.com/in/renesiegl
