Transaction Trends Spring 2020

COVID-19 Response Analysis from ETA Inside Spring 2020

Meet the young professionals who are revolutionizing digital commerce

Congratulations To Michael Nardy on his induction into the 2020 Forty Under 40 class by the Electronic Transactions Association (ETA).

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contents

The Official Publication of the Electronic Transactions Association Vol. 25 | No. 1

features 12 Forty Under 40

ETA’s annual Forty Under 40 program recognizes young leaders and industry game changers. This year’s honorees form a diverse group of the profession’s fastest-rising stars who are making significant contributions to the industry. They come from all niche sectors of the business and include entrepreneurs, innovators, risk and legal experts, CEOs, product developers, and more. They were selected for their impact on the payments industry and their professional character. Here, the class of 2020 talks to Transaction Trends about their careers and personal lives.

30 Defining the Decades

A lot can change in 30 years—especially in the payments world. As ETA celebrates its 30th anniversary this year, we also reflect on how innovation spurred the payments business into the complex and high-tech ecosystem we know today, and how it will continue to evolve the industry. Here’s a look at the most influential events since 1990 and how they have shaped ETA members’ businesses.

departments 2 @ETA @ETA Announcements and ideas from ETA’s CEO Jodie L. Kelley

3 Intelligence Vital facts and stats from the electronic payments world and ETA

8

Politics & Policy ETA and its members play critical roles in the COVID-19 pandemic fight

10 Industry Affairs How payments technology is helping merchants during the COVID-19 pandemic

34 Ad Index 34 People ETA's Board President Chris Lee talks coronavirus and ETA’s anniversary

TRANSACTION trends | Spring 2020 1

Electronic Transactions Association 1620 L Street NW, Suite 1020 Washington, DC 20036 202/828.2635 www.electran.org ETA CEO Jodie L. Kelley Director, Communications Laura Hubbard SVP, Government Relations Scott Talbott Director, Regulatory Affairs Philip (PJ) Hoffman Publishing office: Content Communicators LLC PO Box 938 Purcellville, VA 20134 703/662.5828 Subscriptions: 202/677.7411 Editor Josephine Rossi Editorial/Production Associate Christine Umbrell Art Director Janelle Welch Contributing Writers Michael Coleman, Patrick Nolan, Josephine Rossi, Scott Talbott, Christine Umbrell, and Amy Zirkle Advertising Sales Laura Gaenzle Advertising Sales Manager 717/430.2351 laura.gaenzle@theygsgroup.com

Editorial Policy: The Electronic Transactions Association, founded in 1990, is a not-for-profit organization representing entities who provide transaction services between merchants and settlement banks and others involved in the electronic transactions industry. Our purpose is to provide leadership in the industry through education, advocacy, and the exchange of information.

The magazine acts as a moderator without approving, disapproving, or guaranteeing the validity or accuracy of any data, claim, or opinion appearing under a byline or obtained or quoted from an acknowledged source. The opinions expressed do not necessarily reflect the official view of the Electronic Transactions Association. Also, appearance of advertisements and new product or service information does not constitute an endorsement of products or services featured by the Association. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided and disseminated with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice and other expert assistance are required, the services of a competent professional should be sought.

Transaction Trends (ISSN 1939-1595) is the official publication, published four times annually, of the Electronic Transactions Association, 1620 L Street NW, Suite 1020, Washington, DC 20036; 800/695-5509 or 202/828-2635; 202/828-2639 fax.

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ETA

Payments and a Pandemic

“T

he coronavirus (COVID-19) pandemic has swept across the world in a devastating and unprecedented way. It has had a terrible impact, taking tens of thousands of lives, forcing people into isolation, and putting incredible pressure on the global economy.

No industry has been untouched, and the payments technology ecosystem is no exception. But there also have been some incredible examples of human resiliency, togetherness, and grit from our industry, and I am so proud to see the ways our member companies have risen to the challenges posed by the pandemic.

After the federal government quickly passed stimulus legislation aimed at helping consumers and small businesses alike, our industry played a key role, with many of our members serving as lenders in the Paycheck Protection Program.

The payments industry also announced its willingness to leverage its technology and know-how to quickly and securely deliver stimulus dollars to individuals.

The industry shifted into high gear to help customers as they continue to do business in this challenging environment. From no-touch takeout and delivery powered by mobile payments, to in-app ordering and contactless payments, to online payment capabilities geared toward small merchants, payments technologies have provided tools that business owners can rely on to help adapt their businesses.

As this crisis continues to unfold, much uncertainty remains. We believe, however, that some new realities are already coming into focus.

First, as consumers are increasingly conscious about what they touch, the data shows a clear move from cash to digital forms of payment. In a recent survey of small businesses conducted by ETA and The Strawhecker Group, nearly half of open SMBs surveyed experienced an increase in credit and/or debit card payments. That shift not only allows consumers to forgo handling cash, it also represents a pivot toward payment methods that are simple and secure, and we believe the shift will be permanent.

Second, credit and debit payments are increasingly contactless. Our survey found that 27 percent of small businesses that accept contactless payments saw increases in their use after the start of the COVID-19 pandemic. As consumers grow accustomed to the ease and security of contactless payments, we believe the acceleration toward contactless will only increase.

We’ve also seen an increase in e-commerce, with consumers shifting even further to online ordering. According to data from Adobe Analytics released in late March, e-commerce grew 25 percent in the first two weeks of the pandemic.

Given the ease and security of ordering online, we think this trend will continue.

Finally, it is clear that we will see even more innovation in the payments space.

Payments technology was already evolving rapidly to address consumers’ demand for products that simplify their lives and businesses—to facilitate scheduling appointments, ordering lunch, arranging for a ride, or ordering essential products for home delivery. In an environment in which we’re engaging less in person, and more online, over the phone, and even curbside from our cars, innovation to meet the new reality will accelerate. New payments solutions will continue to make those experiences easier and more secure, and the resulting innovative products and services will endure long after the face masks and social restrictions lift.

This has been an unprecedented and difficult time for the entire world, but our industry has responded in a powerful way. We wish you all continued health and look forward to our continued partnership as we confront and overcome this challenge together. TT Jodie L. Kelley CEO Electronic Transactions Association

2 Spring 2020 | TRANSACTION trends

INTELLIGENCE

Global Digital Commerce Spending Could Fall By 14 Percent This Year

Suwaree Tangbovornpichet/Getty Images

Given the economic disruption caused by the coronavirus disease (COVID-19) pandemic, total digital commerce transaction values are expected to decline from $11.3 trillion in 2019 to $9.7 trillion in 2020, then rise again next year, according to a new study from Juniper Research. While some sectors are seeing increases in digital spending, others—such as digital ticketing—are seeing steep declines, according to the whitepaper, “Coronavirus: How Will It Impact Digital Commerce?”

Since March, when the World Health Organization issued a statement advising consumers to use contactless payments to reduce the risk of transmission, mobile and online payments of essential items have been on the rise. Digital payments connected to grocery shopping, for example, are seeing a surge. Retailers that offer grocery delivery are dramatically increasing their capacity to do so, and are recruiting staff and upgrading their IT systems to process orders, notes Juniper. In addition, outside vendors are entering the grocery space, with companies like Uber Eats announcing partnerships to deliver essential items to shoppers in several European countries. “It is highly likely these services will continue to be involved in grocery delivery after the end of the pandemic,” reports Juniper.

But given the stay-at-home orders implemented in areas across the globe, some industry sectors are seeing dramatic decreases.

Travel-related spending is expected to take one of the most significant hits, with attempts to curb the spread of COVID-19 resulting in

Small Businesses Experience Closures, Challenges, Due to COVID-19

massive reductions in both national and international travel. Juniper predicted that digital ticketing spending will drop by 59 percent in 2020 compared to 2019, driven by unprecedented cash flow challenges.

The good news is that digital commerce spend is expected to recover next year and may exceed 2019’s levels by 4 percent. The economic disruption from the pandemic may last well into 2021, Juniper suggests, but digital services are better positioned than offline commerce for recovery, “as there has been considerable migration from offline spend to online during the pandemic.”

Ultimately, the changes in payment behavior among consumers—including increasing numbers of consumers adopting contactless payments and buying groceries online—will bolster growth in digital commerce spending over the next five years, according to Juniper.

Looking to the future, consumers in areas that had been less affected by the pandemic—including the West North Central and Mountain regions—reported the most optimism regarding recovery of the economy.

Many small businesses in the United States are suffering as a result of the stay-at-home mandates implemented to slow the spread of COVID-19, but some subsets are experiencing positive signs of growth, according to an April 2020 report from ETA and The Strawhecker Group (TSG) called “TSG-ETA COVID-19 SMB Insights.”

More than 40 percent of small business owners reported that their business operations had been temporarily or indefinitely closed, according to a survey conducted by TSG-ETA in late March.

And 47 percent of the businesses that remained open reported a decrease in sales. Business owners from the nonprofit/ education/public administration, retail, and restaurant sectors reported the most significant drops in sales.

One in three small business owners, however, reported an increase in sales since the pandemic began. Some healthcare businesses, in particular, saw positive revenues, with 66 percent reporting sales growth.

The report also captured changes in how customers were paying for products and services from small businesses. Restaurants and eating establishments— many of which transitioned from eat-in to delivery and takeout—reported that in-store card acceptance had been cut in half, while over-the-phone card acceptance had doubled. One quarter of small business owners (24 percent) reported an increase in debit card use.

“As our data shows, there are definitive impacts that the COVID-19 pandemic is having on the American small business,” said Mike Strawhecker, TSG president. “But we also see bright spots in the midst of this challenging time— optimism from small business owners and an ability to capitalize on socially distant commerce like contactless payments and online shopping.”

TRANSACTION trends | Spring 2020 3

INTELLIGENCE

Infographic: Increased Chargebacks During the Pandemic Respondents By Industry Who Have Experienced More Chargebacks at Their Business Since COVID-19

Travel and Hospitality

47% 40%

Eating and Drinking Places Business and Professional Services

33% 19%

All Industries Combined All Other Industries

14%

Education, Government, and Nonprofit

14%

Personal Services

14%

Tsuji/Getty Images

Retail Healthcare

6% 0%

Source: “TSG-ETA COVID-19 SMB Insights,” April 2020.

The Chinese government has adopted a color-based health-code system to help identify individuals with symptoms of COVID-19 and curb the spread of the disease. The system leverages automatically generated quick response (QR) codes that are assigned to citizens as an indicator of their health status. Citizens can download a smartphone app to show their “green” status to gain entry to subway systems, shops, and workplaces. In a few cities, citizens without the app may not enter some public places.

The health-code system was created by the Chinese government with the assistance of Tencent, which offers the messaging app Wechat, and Alibaba, which

4 Spring 2020 | TRANSACTION trends

offers Alipay—the most common mobile payment app in China.

Alipay provided the platform and technical assistance to help launch the system in Hangzhou on February 11. To obtain a health code, Chinese citizens download the app and provide their name, national identity number or passport number, and phone number. Users also report any symptoms, their travel history, and whether they have come into contact with confirmed or suspected COVID-19 patients in the last two weeks, then receive a QR code of red, amber, or green. Those with green codes may move around the city freely. By late February, more than 200 cities in China had adopted the QR codes, according to Alipay.

Zephyr18/Getty Images

Online Payments Company Plays Key Role in Curbing the Spread of COVID-19 in China

Younger Consumers Prefer Credit Cards With Rewards, Debit Cards One quarter of consumers are willing to switch their credit card provider to obtain better rewards elsewhere, according to a new report from Deloitte titled “Getting Ahead of the Curve: Reviving the Relevance of the Credit Card Business.”

Gen Z and millennials are more likely to make the switch than older consumers, with 34 percent of this demographic willing to change providers.

The Deloitte study found that benefits matter: Nearly three quarters of consumers who prefer credit cards over other payment choices say that rewards, discounts, and other offers are the most important reasons for using credit cards.

Deloitte found that credit card use in the United States has been on the rise, growing from 18 percent of payments in 2016 to 23 percent in 2018 and accounting for nearly $4 trillion in sales.

Despite these trends, card companies are challenged by decreasing returns on

asset (ROA); the average ROA fell from 5.4 percent in 2011 to 3.8 percent in 2018.

The decline in profitability is partially attributable to an excessive reliance on rewards to attract and retain customers, according to Deloitte. Consumers made more than 50 percent of their credit card purchases with reward cards in 2018. The average issuer’s rewards expense-per-rewards card increased from $139 in 2015 to $167 in 2018, according to the Consumer Financial Protection Bureau.

Deloitte found that many younger consumers prefer debit cards to other forms of payments, with 52 percent of Gen Z and 41 percent of millennials choosing debit cards. And younger consumers are taking on less credit card debt compared with their predecessors, according to the study.

Digital payments also have been

growing significantly, with 80 percent of surveyed consumers using a digital payments app, such as Apple Pay, PayPal, or Venmo, at least once in the past year. One way for credit card companies to remain relevant with digital payments gaining in popularity is to become consumers’ default payment method, or the underlying payment method instrument consumers use most in their apps, suggests Deloitte.

Looking to the future, “credit card issuers should act now while in a position of strength to revive profitability and relevance and remain ‘top of wallet,’” recommend the researchers. “Issuers should embrace the challenge and play on offense by elevating their roles in customers’ day-to-day lives, increasing their existing value proposition, and investing in transforming business models that can power the experiences their payments customers desire.”

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TRANSACTION trends | Spring 2020 5

INTELLIGENCE

Fast Fact

magann/Getty Images

Online payment fraud losses will exceed $200 billion by 2024, driven by the increased sophistication of fraud attempts and the rising number of attack vectors.

Source: “Online Payment Fraud: Emerging Threats, Segment Analysis, & Market Forecasts 2020-2024,” Juniper Research

Moves & Mergers Ally Financial Inc. announced it will buy CardWorks Inc. The acquisition will diversify Ally’s product offerings by adding an established credit card platform, a collection service, and a merchant-acquiring business, according to the company.

Mastercard Inc.’s chief executive officer (CEO), Ajay Banga, has announced he will step down from his role as CEO Jan. 1, 2021, and then assume the role of executive chairman of the board. Richard Haythornthwaite, the current chairman, will retire. Succeeding Banga as CEO will be chief product officer Michael Miebach, who has been with Mastercard for the past 10 years.

Nacha implemented a new rule March 20 increasing the per-transaction dollar limit for same-day ACH transactions to $100,000, up from $25,000. The increase was expected to enable more business-to-business (B2B) payments.

Payroc, a merchant acquirer, has acquired the assets and operations of independent sales organization Gateway Payments LLC. “With a focus on earning payment processing business from small and midsize merchants by offering the latest technologies, transparent pricing, interchange education, and above-and-beyond service, Gateway Payments is a natural addition to our business,” said James Oberman, Payroc’s chief executive.

6 Spring 2020 | TRANSACTION trends

Repay Holdings Corp. has purchased Ventanex, an integratedpayments provider operating in consumer finance, including mortgage loan servicing, B2B health-care payments, and some other segments. The acquisition advances Repay’s strategy of being a preferred payments provider to high-growth verticals where its technology and payment capabilities serve as differentiators, according to John Morris, chief executive. “The consumer finance and B2B healthcare markets will provide significant growth opportunities, as these verticals are in the early stages of a secular shift from legacy payment mediums to the more innovative and varied payment solutions in which we specialize.”

Visa has entered a partnership with Nigeria-based startup Paga.

Founded in Lagos, Paga scaled its fintech business in West Africa before targeting expansion in Ethiopia and Mexico. The startup has created a multichannel network that enables money transfer, bill paying, and digital purchasing. The arrangement allows Paga account holders to transact on Visa’s global network.

Wirecard, a digital financial technology company, is entering into a payments partnership with Grab, a super app in Southeast Asia. The arrangement will enable Wirecard to process transactions made via the GrabPay e-wallet, starting with markets in Malaysia, the Philippines, and the Singapore.

As shoppers embrace new technologies and engage in social commerce, and Gen Zers become a larger percentage of the consumer base, digital and mobile wallets are transforming online consumer behaviors. Americans are increasingly paying via mobile wallet and will be choosing this payment form for 10 percent of retail transactions by 2023, according to the “Worldpay From FIS 2020 Global Payments Report.”

Globally, 22 percent of in-store purchases were conducted using mobile/digital wallets in 2019, up from 16 percent the previous year, according to FIS. The analysts predict that digital wallets will represent 52 percent of global e-commerce sales in three years.

In the United States, 40 percent of Americans used credit cards for in-store purchases in 2019, and that number is expected to rise to 42 percent by 2023. But digital and mobile wallets are growing in popularity. Although U.S. consumers continue to prefer credit cards for online shopping, digital and mobile wallets are expected to surpass credit cards as the most preferred online payment method by 2021, according to FIS. FIS identified Buy Now, Pay Later (BNPL) methods as the fastest growing online payment preference. BNPL offerings such

martin-dm/Getty Images

‘Buy Now, Pay Later’ Options Drive Digital Wallet Adoption

as Afterpay and Klarna enable consumers to delay payment or pay by installments over a set period. These options are currently popular in Europe, the Middle East, and Africa. In North America, BNPL e-commerce purchases are expected to grow from less than 1 percent in 2019 to 3 percent by 2023.

“Merchants are first and foremost looking for solutions that convert browsers into shoppers. In order to do that, they need to offer the most premium checkout experience out there, which is where mobile technology is thriving,” said Casey Bullock, general manager for global e-commerce, North America, Worldpay Merchant Solutions, FIS. “Digital wallets and BNPL represent the art of the possible in a mobile-first consumer market, giving new tools to merchants who must open new doors to shoppers looking for more flexible and personalized ways to pay.”

The financial services industry has entered a new phase of innovation, called “Open X,” according to a new report from Capgemini and Efma. The “World Fintech Report 2020” explains how the Open X ecosystem—a multisectoral open platform era—promotes data sharing and collaboration between financial services firms and nonfinancial services firms.

“The harsh reality is that fintechs have moved ‘from disruption to reality,’ and banks that haven’t embraced effective collaboration with startups are struggling to retain and acquire new customers,” note the report authors.

The movement toward Open X prioritizes customer experience over products; leverages data as a critical asset; prioritizes partnerships with ecosystem players; and promotes shared access, according to Capgemini/Efma. Applied programming interfaces (APIs) will be instrumental to success in this more col-

DrAfter123/Getty Images

Financial Services Sectors Enter ‘Open X’ Era

laborative environment. Last year, Capgemini found that 89 percent of banks were already using APIs when working with fintech companies, and 66 percent shared APIs with trusted partners. But banks will need to move from direct API monetization models—where incremental income is tied to specific transac-

tions—to indirect models to allow for new ways to create revenue.

The 2020 report points to Uber as a prime example of a nonfinancial player using the full potential of the Open X ecosystem. “Uber customers experience a seamless ride-hailing service with administrative processes in the background and not apparent,” noted the authors.

Banks and fintechs will need to overcome differences in organizational cultures, address cybersecurity concerns, and ensure regulatory compliance to forge successful partnerships in an Open X arena, say the report authors. “As banks and fintechs develop collaborative maturity, they will drive innovation across the value chain more effectively. … Effective collaboration spurs the transition from an innovation-centric model to a business-focused approach in which the innovative solution is adopted and consumed at scale.” TT TRANSACTION trends | Spring 2020 7

&

POLITICS

POLICY

Payments, Price Gouging, and COVID-19 ETA and its member companies play critical roles in pandemic relief and recovery efforts—and in fighting fraud

By Scott Talbott

M

ost Americans have been confined to their homes during the COVID-19 pandemic—but that certainly does not mean that work has stopped in the halls of government.

In fact, the opposite is true: We have seen policymakers at every level—municipal, state, both houses of Congress, federal regulators, and the White House—jump into action to make sure that communities are supported and safe, and that workers and employers across the country can continue to make ends meet in an undoubtably challenging time.

Policy Updates

The most consequential action following the economic shutdown was the enactment of Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in March to provide economic support to businesses and consumers facing economic hardship as a result of the pandemic. As providers of financial technology products and services specifically designed to help merchants pay and be paid, ETA members played an important role in the development and implementation of the CARES Act. In fact, many of our members participated in the Paycheck Protection Program as lenders and quickly and securely delivered billions of dol8 Spring 2020 | TRANSACTION trends

lars in economic relief funds to small businesses when they needed it most.

Our members also played an important role in delivering relief funds to consumers in a secure, innovative, and accessible way. ETA members are powering prepaid, debit and credit, contactless payments, direct deposit, ACH, and other electronic forms of payment for consumers, particularly underserved consumers, to receive and use the funds.

At the state level, ETA successfully advocated for state policymakers to classify the payments technology ecosystem as “essential” so that our members could ensure that the critical infrastructure powering the U.S. economy is maintained safely.

This crisis is not over, and ETA anticipates that Congress will take more legislative action to help American businesses survive. We are proud to serve as the unified voice for the payments technology ecosystem and provide a voice for the essential services that our industry provides merchants, consumers, and our economy as a whole. We will continue to educate policymakers on the ways our members stand ready to assist and push to make sure that any future relief measures feature capital for small businesses.

To this end, we have joined America’s Recovery Fund

Coalition, a group of more than 100 organizations collectively working to ensure 58 million American workers across retail, restaurants, theaters, the travel industry, and financial services have the resources they need to stay afloat in this national crisis. ETA has a unique perspective to bring this group, and policymakers by extension, because our members are both critical partners to businesses as they find new ways to do business in a socially distant economy, and—in many cases—small businesses themselves confronting challenging and uncertain circumstances.

The industry is on high alert during the pandemic. One ETA member has already reported a merchant to the U.S. Department of Health and Human Services for selling N95 masks for $200 apiece. And another recently suspended processing for over 6,000 sellers for price gouging. These are just a few examples of what our members are doing to protect consumers from price gouging this year.

Focusing on risk, fraud, cybersecurity, and data privacy, and protecting consumers from fraud—including price

Kameleon007/Getty Images

Fighting Fraud During COVID-19

ETA also has been telling the story of how our members are positively contributing to the fight against fraud during this crisis. It is a sad fact of life that fraudsters prey on consumers and businesses during a crisis, and our industry affairs department has been closely tracking and shaping underwriting and risk management developments throughout this process.

Our members engaged in robust underwriting and due diligence before this crisis, but this work has become even more important given the current pandemic. In communications with policymakers across the country, we’ve highlighted the ways payments companies ensure a fair ecosystem and protect consumers from exploitation. Our members review merchant pricing to ensure it is both logical and in line with the market, monitor transactions for significant jumps in average sales tickets over set periods of time (such as the past seven, 14, 30, and 60 days), monitor e-commerce websites for noncompliant activities by performing price reviews of websites that show a significant increase in sales volume and other indicators, and ensure compliance with industry best practices, including ETA’s “Guidelines on Merchant and ISO Underwriting and Risk Monitoring” and “Payment Facilitator Guidelines.”

In these efforts, our members have stepped up to fight against a prevalent and insidious form of fraud during this crisis: price gouging.

The payments industry is committed to identifying and shutting down those who illegally prey on consumers through price gouging. This process helps to identify price gouging and ensure that consumers do not bear the cost. If the illegal activity is identified, the merchant may be subject to fines and potential suspension or termination of service.

If any illegal activity is identified by a merchant’s processor, the merchant is subject to fines and potential suspension and termination of service.

ETA members work closely with law enforcement and federal and state consumer protection agencies to support efforts to prevent or remediate price gouging or other illegal conduct. Companies report suspicious activity to law enforcement authorities and have their call centers refer consumers who have concerns about price gouging to report the activity directly to state attorneys general.

IN COMMUNICATIONS WITH POLICYMAKERS ACROSS THE COUNTRY, WE’VE HIGHLIGHTED THE WAYS PAYMENTS COMPANIES ENSURE A FAIR ECOSYSTEM AND PROTECT CONSUMERS FROM EXPLOITATION. gouging—are essential not only in times of crisis but during good times, too. As your advocates, ETA will work with policymakers and deliver the dual messages of innovation and security to help secure an environment that helps consumers and ETA members rebuild and grow long beyond this temporary pandemic.

Looking Ahead

Our entire world has come together in the fight against the COVID-19 disease. From helping merchants and consumers access needed relief funds, to fighting hard against fraud, the payments ecosystem has played a critical role. As we move forward into a post-COVID-19 world, ETA will continue to be the hub for collaboration and advocacy for our entire ecosystem. TT Scott Talbott is senior vice president of government affairs at ETA. For more information, please contact Talbott at stalbott@ electran.org.

TRANSACTION trends | Spring 2020 9

INDUSTRY AFFAIRS

Helping Merchants in the Time of COVID-19 Provide education on contactless payments, evolving e-commerce strategies, and advanced security solutions to facilitate transactions during a pandemic

By Amy Zirkle

T

he coronavirus (COVID-19) pandemic has forced the world to change. Among the hardest hit have been our industry’s customers: businesses of all sizes providing a range of products and services to consumers.

What was once a given—face-to-face interaction, inperson retail, packed restaurants and bars—may slowly re-emerge with modifications. For many businesses, the coming weeks and months will be defined by their ability to adapt and think of new ways to provide their products and enable payments. ETA members are stepping up to the plate to help. Our industry has many opportunities to increase merchants’ understanding of the full range of digital payments that will sustain merchants in the current environment and guide them toward success as we come out on the other side of the pandemic.

In-Person Payments

A clear challenge to merchants in a time of social distancing is conducting in-person commerce in a way that is safe as states open their economies back up—but don’t completely eliminate restrictions on doing business. How might merchants be sustained while adhering to restrictions on in-person business and supported in a post-COVID-19 world? The answer lies in the types of solutions that are not necessarily new but have shown to be essential in helping merchants in this period.

A prominent example is the use of contactless payments. When ETA and The Strawhecker Group (TSG) surveyed small business owners in late March, 27 percent of those accepting contactless payments reported an increase in their use after the start of the pandemic. Contactless payments offer consumers, many of whom are wary of the surfaces they touch, a way to quickly and securely pay for their goods without touching terminal equipment or having cash exchange hands. Payments technology providers can help merchants tap into this growing trend by educating them on how to activate contactless payments. Make sure that your merchants know that their EMV equipment can be leveraged to accept contactless payments and help them 10 Spring 2020 | TRANSACTION trends

market this function to their customers. ETA anticipates that more consumers will be using contactless payments as we transition out of the pandemic, and payments companies can help merchants meet their customers’ needs.

Additionally, smart terminals, mobile point of sale, and other integrated payments products can help merchants get online and adopt new ways of reaching their customers through mobile order-ahead, delivery, and marketing. For years, payments companies have offered more than credit card terminals—and their product suites include marketing tools that can be essential in helping SMBs stay afloat and retain their customers. In turn, these tools can help you retain your merchants, so be sure that you are arming your sales teams with the full range of product availability for your merchants to access these types of solutions. And if you don’t currently offer them, be on the lookout to make new partnerships at ETA events–including TRANSACT Connect—to help deliver these solutions.

Online Advances

Since the start of the pandemic, the global attention on ecommerce has been intense. According to Adobe Analytics,

e-commerce volume jumped 25 percent in a matter of days in March and continues to grow. Certain forms of e-commerce have increased by leaps and bounds. Buy-online/pick-up-instore grew by nearly half in less than a week. E-commerce has helped keep main street alive in this challenging time, and ETA members are playing an important role.

From offering free marketing services to building checkout pages and powering gateways, the payments technology ecosystem has secured global e-commerce to business of all sizes. Now is precisely the time to increase those efforts. Every business should have an e-commerce presence and should be able to manage its payments and scheduling digitally. Services including scheduling, prepayment, and card-on-file recurring billing—services that were previously favorable with niches like dental offices and floral shops—might now become more universal. Some restaurant industry experts predict that prepaid reservations will be necessary for restaurants and bars of all sizes. Payments companies serving all verticals should be proactive and innovative to provide these solutions in additional verticals.

Security and Risk Management

svetikd/Getty Images

With the transition to a more online world will come an even greater emphasis on sound risk management and security practices. In times of crisis, the fraudsters come out, and come out hard. The ETA-TSG survey found that almost 20 percent of small businesses reported an increase in attempted

fraudulent payments and chargebacks after the start of the pandemic. The lists of COVID-19-related e-commerce and payments scams are extraordinary.

Now is the time for payments technology companies to emphasize security. We have incredible tools in our toolbox to keep merchants and consumers safe when shopping online—tokenization and secure remote commerce, 3D Secure, artificial intelligence, even biometrics—and we need to ensure that merchants of all sizes are taking advantage of these offerings. This is the time to talk to your merchants about security training and make sure that their policies and procedures are minimizing the chance they will be made victims of a fraudster’s scam.

And while most of the world has shut down and is only just reopening, remember that PCI and the need for good underwriting never went away. Make sure that your underwriting practices are in line with what ETA and other industry experts are advising in these unique times.

So many things have needed to temporarily change for the world to collectively fight this virus, and some parts of life will be permanently different. But we have seen that one thing will never change, pandemic or not: our industry’s commitment to helping merchants grow their business through innovative payments technology. TT Amy Zirkle is the former vice president, industry affairs, at ETA.

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TRANSACTION trends | Spring 2020 11

ETA’s annual selection of the most influential young people in payments

12 Spring 2020 | TRANSACTION trends

GABE MOYNAGH

I

nnovation and adaptability are fueling growth in the payments technology industry, as well as the careers of the sector’s fastest-rising stars.

ETA’s Forty Under 40 for 2020, which recognizes young leaders and industry game changers, includes those whose actions and leadership are driving the industry forward and moving the world toward smart, secure, and frictionless commerce.

“The payments industry has experienced momentous changes over the past 30 years, and the ongoing evolution of the industry is represented by the diversity of the 2020 ETA Forty Under 40 class,” says Jodie Kelley, CEO of ETA. “Each of these honorees has made significant contributions to the industry through their entrepreneurship, leadership, and innovation.”

ETA solicited nominations from across the payments industry, seeking talented payments executives under the age of 40. The final group was selected by the previous honorees and the ETA Awards and Recognition Committee based on the nominees’ impact on the payments industry and their professional character. Read on to learn more about these instrumental professionals, their careers, and their personal lives.

Program sponsored by:

TRANSACTION trends | Spring 2020 13

Trent Addington

Joseph Arthur

Senior Director Global Treasury, Walmart Inc. Twitter: @trentaddington Company Twitter: @ WalMart

Partner, RPY Innovations Company Twitter: @rpyinn

First job in payments: Like most, I did not set out to have a career in payments. Once I got out of college, I took a job with TeleCheck as an on-site account manager at Walmart, something I thought I would do until I could find a job in the merchandising space.

Favorite part of the job: The payments ecosystem is complex, but, as an industry, we make it seem simple to customers. Because of this complexity, I get to spend a lot of time working with great people finding ways to improve the experience while saving customers money.

How to succeed: Be a learner.

This industry can be very rewarding, and, to be successful, you need to be open to learning not only the payments aspects but also how they impact how your organization’s business strategy. Be a teacher. To better serve customers’ needs, you need to be able to teach others how payments fit in with the broader customer journey.

The future of payments: Technology will enable innovative lowcost faster payments. Customers are going to have more options in how they pay, but the winners will be the ones that create a compelling value-prop for all parties in the ecosystem.

Jesse Angell Senior Director of Engineering, CardFlight Twitter: @jesseangell Company Twitter: @CardFlight Getting started in payments: In 2012, I was working for a SaaS company in the printing industry. In an effort to diversify the business, we launched an MSP with a card-not-present gateway. I was the CTO of the company.

Problem solver: There is little that is more important to a small business than its ability to accept payment. I love being able to solve that problem elegantly for over 50,000 merchants.

Get to the root of the problem and empower people: The best person to make a decision is usually the person nearest to the problem, assuming they deeply understand the problem and understand the long-term consequences of their decision. As a leader, I spend very little time making decisions; instead, I spend my time developing employees that deeply understand the problem they are working on and provide them with the wisdom to ensure they understand the long-term consequences of their decisions. I’m here to mentor them through their decisions, not make them for them.

Attributes for up-and-comers: Persistence, trustworthiness, and determination.

Out-of-office activities: I hold FAA commercial pilot and flight instructor certificates. Much of my free time is spent navigating the skies and teaching others to safely do the same. When I’m not flying, I’m likely at the lake enjoying a day on my boat.

14 Spring 2020 | TRANSACTION trends

What RPY does: We develop new tools and platforms for our clients to utilize daily. Everyone who is successful in our industry knows that if you don’t innovate, you perish.

Favorite part about working in payments: The complexity of payments is like a puzzle to me, and every day I get to chip away at the vastness of it all. I love helping our clients create clarity and increase profits through the complexity.

Solutions get noticed: You need to come to the table with a solution. Even if it doesn’t work, you have at least offered a starting point to the resolution of the issue.

Also, it’s an old adage, so it’s easy to disregard, but adopting the idea (but not viewing it as imperative) that the “customer is always right” can yield great results.

Ready for change: The payments space is prime for innovation. Those who disrupt long-held beliefs will see impressive results, as they are the most closely protected.

Fintech will continue to rise and be gobbled by the conglomerates over the next 10 years. Traditional players will see consolidation to compete with new entrants. The card brands will not sit idle; I expect to see interesting ideas from them.

Benjamin Berg

George Baker Sr. Founder & CEO, ParkHub Twitter: @georgefbakersr Company Twitter: @ParkHubInc From the ground up: At age 12, I started working for my dad in the parking industry. Restriping parking lots and performing routine maintenance was how I earned money growing up, and it taught me a great deal about how to be a hard-working, honest businessperson. It also showed me the glaring pitfalls in the industry, from both the customer’s and owner/operator’s perspectives.

Best thing about a payments career: The opportunity to remove friction between the consumer and the experience they desire, and replace disparate, antiquated processes with unified, streamlined solutions that empower the user.

Best piece of professional advice: You don’t get what you don’t ask for … and be bold with your ideas.

Dig deep to learn the industry: Payments are complex. Solutions are often buried in jargon and terminology, while optically appearing as fees.

To succeed in the field, payment professionals need to deconstruct the complexity, identify the sphere of influence, and clearly articulate value propositions to stakeholders.

What’s next?: Purchases will become increasingly motivated by the convenience, loyalty, and personalization offered.

“To succeed in the field, payment professionals need to deconstruct the complexity, identify the sphere of influence, and clearly articulate value propositions to stakeholders.”

—George Baker Sr.

CEO, eCard Systems Starting out: I came to the gift cards industry—which intersects with the payments industry through POS systems—by way of an investment group I founded.

Helping consumers and merchants: My favorite part of interacting with the payments industry is witnessing the transformation of how making payments easier for consumers—and especially as it relates to small merchants—is creating all these new payment models. These new models are transforming entire marketplaces.

Mobile food delivery is a good example, where payment moves through the delivery company to the restaurant and is a shared experience and transaction across two different companies.

Advice for young professionals: Remain curious and keep learning. This industry is so fluid, and promises to remain so, that I think you have to be an agile thinker and aggressive problem solver.

Planning for the future: I think changes over the next 10 years will continue to be driven by the demand for consumer convenience. Consumers want the ability to pay for goods and services from anywhere—phone, tablet, laptop, desktop—and redeem anywhere, at any time. For this to happen, systems along the payment continuum have to connect at multiple points and often even across multiple companies.

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Marcus Dagenais President, Canada, Payroc

”Listen more than you speak.

Everyone can teach you something.”

—Sean Donovan

Andrew Bigart Partner, Venable LLP Current role: As a partner in Venable’s financial services practice group, I represent banks, payments companies, and fintech companies in areas such as regulatory compliance, business transactions, and government investigations. My work spans the alphabet soup of a Washington, DCbased practice, including work before the FTC, DOJ, CFPB, the Department of Treasury, the Federal Reserve, the OCC, and the FDIC, among others.

Interesting work: Payments is a dynamic industry that sits at the intersection of the U.S. economy. Given the significant amount of innovation in the field, a payments lawyer has to understand the industry, the applicable legal environment, and business considerations in order to counsel clients. This makes for fun and challenging work.

On empathic intelligence: As a lawyer, the best piece of advice I have received is to try and put yourself in your client’s shoes so that you can provide practical legal advice. Our job is to find ways to make a client’s life easier.

Future think: [We] will continue to see convergence between payments and more traditional fintech players, as well as new payments opportunities developing from the expansion of open banking concepts in the United States. At the same time, traditional card and ACH processing will remain big parts of the industry.

16 Spring 2020 | TRANSACTION trends

Part of the family business: Whether I understood it as a child or not, payments are in my DNA. My parents founded Canada’s first IP-based payment gateway called Caledon Computer Systems Inc. back around the dawn of the internet in the early ’90s. Electronic payment processing (and all the trials, tribulations, huge wins, and massive catastrophes that are inherent!) was regular dinner table conversation growing up.

Don’t be a perfectionist: Get comfortable with and embrace ambiguity. You do not have time to pursue absolute perfection as this business just moves far too fast.

Massive industry changes ahead: We are in the middle innings of a monumental shift in the fundamental merchant acquisition model for payment solutions. Traditional human-centric distribution channels, such as ISOs, agents, direct sales, referral partners, etc., are being disrupted and replaced by software-centric distribution.

Need for speed: I embrace a lifelong addiction to alpine skiing, mountain biking, and road cycling. My only claim to fame is I, along with my other seven teammates and 16 crew members, hold the Canadian speed record for the infamous annual Race Across America, a 3,000-mile, nonstop, open road cycling race held every year from California to Maryland.

Sean Donovan Co-Founder, Finix Twitter: @sean_donovan Company Twitter: @Finix First career break: My first job during college was at payment processor Vantiv (now Worldpay), where I spent 14 years. My first role was on the inside sales team.

What makes payments special: Hands down—the people. It’s this hidden industry you only know about if you’re in it. While there are processors and startups all over the country, it’s a very small world, and I feel like I know someone everywhere I go.

Best simple advice: Listen more than you speak. Everyone can teach you something.

Key traits of successful payments professionals: Hunger and adaptability. Payments will never stop evolving, and, recently, the industry has changed more rapidly than ever before. Payments is change. If you think you can do it better or faster, you’re right.

On M&A over next five to 10 years: In the next several years, we’ll see more mergers and acquisitions from the big payments companies. Many of the biggest payments companies in the market—including PayPal, Stripe, and FIS—have made significant acquisitions over the past yearplus. Expect that trend to not only continue, but accelerate in the years ahead.

Diane Driscoll, ETA CPP

Brenna Ellis

Underwriter Manager, U.S Alliance Group Inc. Twitter: @DDriscollETACPP Company Twitter: @ USAllianceGroup

VP, Product & Marketing, Signature Card Services Company Twitter: @ SigCard

Career path: My payments career started in 2015 when I accepted a position as a quality control analyst II within the Risk and Underwriting Department. This laid the foundation of my payments career as I immersed myself in learning about the industry and became an ETA Certified Payments Professional (CPP) in 2016, which helped me quickly advance my career. In addition, I got actively involved with ETA, the Merchant Acquiring Committee, and the Women’s Networking in Electronic Transactions organization, all of which have been critical to support my growth and career advancement.

Best professional advice: The best piece of professional advice I have ever received was to build a professional brand and network … network … network.

Recommended traits for young professionals: The traits that are most necessary for a young person to succeed in the payments industry are dedication, integrity, adaptability, and passion for lifelong learning.

Other interests: I am an avid reader, and, when I am not consuming professional or self-development books, you can find me with a mystery or suspense novel in my hand. One of my favorite authors and series is Patricia Cornwell’s Kay Scarpetta series. I am also an intermediate skilled cook.

Best thing about payments industry work: As the industry continues to evolve and develop, so do the opportunities to grow and develop. It’s exciting to be part of an industry with such a broad scope of career and growth possibilities.

Good advice: Everyone should understand how their piece of work fits in to the big picture, from intern to CEO. Keys to success: With so many different aspects to this field, a desire to learn is critical. There will be time in your career to really specialize in one aspect of the field, but having an overall understanding of payments and how everything plays together is essential.

Payments a decade from now: Same day funding, push payments, and mobile payments will continue to expand in functionality and adoption. I personally would like to see more women in leadership positions across the payments space.

Globe-trotter: When I’m not working, I like to spend time traveling or dreaming about my next adventure. I have traveled to over 25 countries, and I’ve lived in several different countries around the world. I love learning about new cultures and seeing how other people live.

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Joshua Elwood Head of Architecture, NCR Payments Company Twitter: @ NCRCorporation First payments job: My first position in payments was as a quality analyst for MTXEPS, performing quality analysis of the WinEPS Gateway Product. I was a full-time student and professor’s aide at the time and could only afford to work limited part-time hours.

Speed and security: It’s a fastpaced game of keeping up with security and consumer needs. In the payments industry, speed is of the essence when processing the payment, which has proven to be a difficult challenge to ensure all data is fully protected at all times. We need to have a delicate balance of security and speed to ensure consumers remain protected against “bad actors,” as well as offer a quick and easy end user experience for great customer satisfaction.

Traits for success: Adaptability, problem solving, eagerness to expand knowledge, and being security-minded. Security must always be at the forefront in payments as our job is to prevent bad actors from gaining access to our customers’ data.

Payments in the future: Payments processing will become more mobile focused with the reduction of physical cards.

Kevin Feagan Senior VP, Integrated Solutions & Strategy, FIS Family business: I got my start in payments because of my father. He had been successful in the industry for quite some time, and I wanted to follow in his footsteps. My first job in payments was cold calling out of a phone book to set up appointments for our outside sales reps.

Best thing about payments: Aside from the people and the relationships I’ve created, it has to be the fact that it changes every day and there’s always something to learn and a problem to solve.

Recommended professional traits: Work ethic and to be a good listener. Once you’re the smartest person in the room, find another room.

Thriving technology: Companies are transforming more into technology companies that do payments rather than payments companies trying to figure out technology. I see that ramping up drastically in the future. You’ll start to see technology companies in strategic verticals moving into payments and vice versa. Mobile payment technology will continue to thrive and get stronger, as well.

“My favorite part about working in payments is working with cuttingedge technology that will one day be used by everyone in the world.”

—Vlad Galyuz

“I got my start in payments because of my father. He had been successful in the industry for quite some time, and I wanted to follow in his footsteps.”

—Kevin Feagan

18 Spring 2020 | TRANSACTION trends

Vlad Galyuz VP, Product Development, USAePay Company Twitter: @usaepay Initiation into the industry: I got my start in payments with USAePay, my current company. I’ve been with USAePay since 2006.

Current role: My primary responsibility is releasing quality payment products that add value to our sales channel.

Technology drives job satisfaction: My favorite part about working in payments is working with cutting-edge technology that will one day be used by everyone in the world.

Best piece of professional advice: “Anything worthwhile is hard to do.” It means that hard work is the tell-tale sign of quality.

How to succeed in this field: My advice for a young person would be travel to the trade shows, network, be kind, get educated, and don’t gossip.

Where payments are headed: Contactless is really going to expand as everyone will move to tap-to-pay with their cards. Mobile payments will be even more prevalent as retailers continue to use software as a form of engagement with customers.

When work is done: My other passions are raising my two kids with my wife and collecting contemporary art.

“[Payments is] a competitive and ever-changing space that requires you to adapt and reinvent yourself constantly.

You need to take things in stride and keep it moving.”

—Prerna Goel

Prerna Goel Head, Onboarding & Operations, ClearBank A focus on customer satisfaction: I am responsible for designing and delivering the end-to-end customer experience. Some of my recent projects have included designing ClearBank’s Banking-as-a-Service proposition, redesigning the end-to-end onboarding journey, and working to build internal capabilities for ClearBank’s membership of the Cheque and Credit Clearing scheme.

Favorite part of the job: Just knowing that what we do fundamentally impacts people’s lives. The ability to send and receive payments, easily, securely, and instantly, is really something people have come to appreciate and expect, but they don’t really understand what needs to happen behind the scenes for this to be successful. What I love is that we are facilitating the process, making it as seamless as it can be, so people don’t really need to think about it.

Classic advice: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” –Charles Darwin.

Advice for industry novice: Personal resilience. It’s a competitive and ever-changing space that requires you to adapt and reinvent yourself constantly. You need to take things in stride and keep it moving.

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Fenella Kim, ETA CPP President & CEO, Reliance Star Payment Services First industry job: I started in payments while in college working part-time for a bank in Asia. It was a sales position acquiring new customers for business credit cards.

Role at Reliance Star: My primary responsibility mainly involves strategic planning, providing training, and consultation.

Evolving in the job: My favorite part in payments is keeping up and always staying ahead [of ] the new payment technology as the industry evolves.

Find a mentor and never stop learning: Look for a mentor whom you can learn from. I am fortunate to have a few mentors that have guided me along the way the last 20 years in payments. The guidance and advice they provided were priceless. Also, be curious, ask questions, and find out the answers you need to do a great job. Always stay hungry for new knowledge, and never stop educating yourself. The payments industry is changing so quickly with technology advancement, new rules, and regulations and compliance—so pay attention to the industry news and attend industry conferences in order to stay up to date.

Business builder: Building, growing new businesses, and seeing the businesses flourish are my passions. I do enjoy traveling internationally to new countries, visiting historic places, and sightseeing.

“There is an energy and a rush to be on the edge of the next best solution in payments.

That excitement is hard to find in any other industry.”

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—Janelle Lee

Janelle Lee Director, IT Project Management, TSYS Company Twitter: @TSYS_TSS Payments work is a rush: There is an energy and a rush to be on the edge of the next best solution in payments. That excitement is hard to find in any other industry. Unlike other industries, working in payments affects many people’s day-to-day lives.

Get out of your comfort zone: My mentor told me, “When given choices in your career and professional development, always choose the option that scares you or makes you uncomfortable. If you’re comfortable, you’re not growing.”

Advice for newbies: Payments is a fast-paced, constantly changing industry, which requires individuals to be adaptable and open to change.

This is particularly true as the industry becomes more consolidated through M&A activities.

In the next five to 10 years: Consumer demands are going to create changes in the market throughout the payment life cycle, including changes to legislation addressing security and storage of data, increased security for consumers when accessing information, implementation of consumer ability to control their own data and what is collected, and increased implementation of security standards throughout the delivery of products and services.

Passions: When I’m not working, with my family, or volunteering, I enjoy dancing, weight training, hiking, swimming, and getting tattooed.

Ed Mastrangelo VP, Business Development & Complex Sales, Payrix Company Twitter: @payrix First job in the business: A sales and marketing position at Hypercom that I stumbled into using career services at Arizona State. They were looking for a young person to train in the industry, and I signed up for an interview without truly understanding the world of payments. Fifteen-plus years later, it was a great decision.

Current role: I work with companies looking for help with their payments strategy—whether it’s helping them understand interchange and best practices for payments or designing their checkout process and various points of acceptance to meet the needs of their customers in an efficient and secure matter.

Future of the payments space: I see continued growth of mobile wallets and tokenization with focus on security and taking payments to the point of purchase versus traditional checkout lines. Leveraging technology to add additional authentication to reduce risk of fraud even in card-not-present scenarios.

New places, football, and video golf: I’m an avid traveler and try to go to a new destination every year. I’m a big college football fan and enjoy a nice glass of wine while playing trivia or a game of Golden Tee.

“My first job in payments was during my senior year of high school delivering rolls of paper and hanging “ATM Here” signs for a local ISO.” —Adam McDonald, ETA CPP

Adam McDonald, ETA CPP

Nicole Meisner

President, Humboldt Merchant Services First job: My first job in payments was during my senior year of high school delivering rolls of paper and hanging “ATM Here” signs for a local ISO. Following undergrad, I worked in the customer service, technical support, and deployment departments for the same ISO while attending law school at night. After practicing law for two years, I took a job selling merchant cash advances, shortly after which I was presented with an opportunity to take a sales position at Humboldt Merchant Services.

I was promoted to president five years later.

Favorite part about working in payments: I quite literally learn something new every single day.

Traits needed for a young person to succeed: Grit and hustle.

Industry outlook: The consolidation we have seen over the past few years will lead to further innovation in the payments space, while at the same time, providing room for new sales organizations to enter the industry that are willing to dedicate themselves to providing merchants with an outstanding customer experience.

Hobbies: I am an avid golfer and reader, and I enjoy traveling with my wife and two young daughters.

Attorney and Partner, Jaffe, Raitt, Heuer & Weiss Twitter: @nicolemeisner Company Twitter: @ epaymentslaw Charting a career path: I started my legal career working on cases involving violations of the Bank Secrecy Act and anti-moneylaundering laws. I also advised money transmitters and financial institutions. This experience led me to discover a unique opportunity at the intersection of money transmission and payments, so I set off to chart my career path in this industry.

A love of law and payments: My primary responsibility is to help my clients understand the unique legal risks specific to the payments industry and identify ways in which they can limit such risks. The thing I love most about practicing law in the payments industry is that each day presents a new set of exciting issues and challenges to solve. There is never a dull moment.

Best advice: There is no substitute for persistence.

Local learning: My No. 1 passion and driving force is my family. We make an effort at least once a month to explore new parts of our community and take day trips to nearby towns. We’ve found it to be a great way to learn about other areas and disconnect from daily distractions, all while creating memorable experiences together.

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Judy Mok Counsel, Ballard Spahr LLP Company Twitter: @BallardSpahrLLP First job: My first job in the payments space was as a junior transactional lawyer assisting on a major co-brand and private label credit card deal.

After successfully completing this major transaction, I realized I love these types of payments deals and decided to focus my practice in the payments space.

Current role: Leading negotiations and advising my clients in connection with their strategic payments transactions. I represent leading banks, hotel chains, airlines, and a wide range of merchants, including major retailers.

No risk, no reward: Take risks. Things don’t always unfold the way you expect, but it’s important to put yourself out there and give yourself a fair shot at success.

Great expectations: I believe consumer demands and expectations will drive a lot of the payments innovation. Businesses must quickly adapt their business models and product offerings to appease the consumers’ desire for innovative products that will give them flexibility, an enjoyable customer experience, and, of course, fast and seamless payment methods.

When not working: I love painting, drawing, doing arts and crafts, cooking, reading, and spa-ing. I especially love fashion design and enjoy sketching fashion drawings in my free time.

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“Take risks.

Things don’t always unfold the way you expect, but it’s important to put yourself out there and give yourself a fair shot at success.”

—Judy Mok

Matt Moore President, BankMax Company Twitter: @ celerocommerce First industry position: I started working as an analyst for Elmhurst Financial Services in Brentwood, Tennessee. This position allowed me to see the business full circle—from pricing and equipment, to onboarding and sales, and, of course, maintenance and service.

Best part of the job: Payments are crucial to the day-to-day interaction between business owners and customers. In my role, I have been incredibly fortunate to work with some of the most respected financial institutions throughout the country—bringing a great, transparent product for our banks to deliver to their customers. This field has allowed me to see nearly every corner of America.

How to succeed in payments: Like everything else in life: persistence.

Technology is changing the game: As a small business owner and entrepreneur, I’m thrilled to see enhanced technologies from our industry that allow small businesses to compete on a grand scale.

There’s a lot of meaningful value we can bring to our economy and Main Street ecosystems by continuing to enhance our offerings.

Free time fun: Running, aviation, cooking (author of four cookbooks), and entrepreneurship.

Gabe Moynagh

Andrew Nuss

CEO, Sysnet Global Solutions Company Twitter: @Sysnetgs Getting a foot in the door: I got my start in payments with Sysnet. My dad was running the company at the time, and I joined as sales director. At that time, Sysnet was providing information security services to businesses mainly in Ireland. The introduction of PCI DSS back in 2005 presented a huge opportunity for the business, and we grabbed it with both hands. Since then, our focus has been on providing compliance and security services to the payments industry globally.

Where the payments industry is headed: Completely frictionless payments facilitated by the internet of things. The downside to seamless, frictionless payments and convenience is increased risk. Solutions will continue to develop that remove as much risk as possible; however, there is always the human factor and payment and personal information will always be valuable. … The need for each business to understand its own payments environment and know which security solutions to deploy will not go away. That is particularly applicable to smaller businesses with less expertise and resources.

Fiddling around: I love spending time with my kids. I also like to play golf, and I play traditional Irish music on the fiddle, but not as much of either as I would like.

“Don’t BS and make sure you call people back. You’d be surprised how few companies actually call their customers back.”

—Michael Nardy

Director of Marketing, The Strawhecker Group Company Twitter: @ TheStrawGroup

Michael Nardy CEO, Electronic Payments Twitter: @mikenardy Best thing about the payments business: The people are absolutely dynamic! Some of my best relationships, including my marriage, have come from the payments industry. I have lifelong friends, business colleagues, and customers as a result of this industry.

Guidance to others: Don’t BS and make sure you call people back. You’d be surprised how few companies actually call their customers back. Also, think of this business at the macro level. Portfolios are not one account, they are many. If you drive your business forward at the portfolio level, you will focus on the bigger picture and won’t get lost in the weeds.

How to succeed in this field: Many young people seem to have trouble trusting their own judgment. Just because there are older people or many who have come before who may discourage you based on their experiences, if you think you can do something, chances are, you can! I thought we could build something that ran better than our much larger competition, and we did!

Staying active: I enjoy participating in triathlons and road races, playing tennis, and skiing. I also enjoy being the dad of two girls who amaze me every day.

Background: I started as a marketing intern with TSG in the summer of 2009 and continued with the company through my senior year of college. Upon graduation from the University of Nebraska at Omaha in 2010, I was hired as a marketing associate. Now, I have been in payments for more than 10 years.

Enjoying the work: My favorite part about working in payments is being a part of something that is always moving forward. Technology and software have been key drivers of change in the ecosystem, and those advancements present new opportunities and challenges.

I enjoy working with the team on initiatives to help our clients proactively adapt to industry shifts.

On change: As the consumer journey continues to evolve, payments players have a choice— adapt or resist. We are on the threshold of even more technological growth, and it will be exciting to see how the industry adapts over the next decade.

After 5 p.m.: To stay up to date on the latest marketing trends and tactics, I am a member of the local American Marketing Association chapter. I enjoy spending time with my wife, Kristin, and traveling to new locations. Additionally, I am an avid marine aquarium hobbyist.

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“Payments is a living, breathing, and everchanging industry. The urgency that comes with everyday tasks really brings character out of those who are ambitious enough to serve the chaos.”

—Lauren Olechna

Michael Pieciak Commissioner, Vermont Department of Financial Regulation Twitter: @mspieciak Government Twitter: @ VermontDFR

Lauren Olechna Director, ISV, First American Payment Systems Twitter: @LOlechna First job in the business: I was plucked out of a corporate job in website management to work for a startup ISO in Plano, Texas, in 2015. I scrubbed applications, onboarded merchants, downloaded devices, installed the devices, and managed the accounts after install. Let’s just say I got a fair amount of experience on an operations level. Thanks, Lynn Varnell!

Why a payments career rocks: Payments is a living, breathing, and ever-changing industry. The urgency that comes with everyday tasks really brings character out of those who are ambitious enough to serve the chaos.

Roll up your sleeves: Anyone can do anything for a short period of time. My dad has always reminded me of this. Problems can be temporary, if you work hard enough, and the next thing is always around the corner.

Payments in the future: Although it may be difficult to conceive the type of technology that will be available in 2030, I believe payments will be streamlined into our day-to-day efficiencies. The payment medium will become less and less visible, and we will be paying for our items without a thought or an action to accompany it.

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Working for the public good: We regulate non-deposit licensees, such as money transmitters.

Regulators generally have a dual mission in this area: first and foremost, to ensure consumers are adequately protected with appropriate regulatory oversight, and to help facilitate competition, a level playing field, and innovation.

Best advice: When confronted with a difficult decision, maintain your focus on what is a right and just outcome.

Keys to success: I think creativity and open-mindedness are most critical traits for success, as this industry will continue to evolve at a rapid pace and will look completely different in 10 years than it does today.

Fast and true trends: Like the rest of financial services, technological innovation is making everything faster, more data driven, and individualized. These trends are true today for the payment field and will only increase over the next decade.

Fun and games: I am an avid Red Sox fan, and I enjoy exploring everything Vermont has to offer, whether it be at a state park, on a golf course, or in a craft brewery.

Denada Ramnishta Senior Vice President of Lender & Partner Strategy, Lendio Twitter: @DenadaLendio Company Twitter: @Lendio First industry job: I began my career in payments at American Express at a time when the company was revolutionizing the way it did business. At Amex, I was part of the team that spearheaded non-card lending to support its merchant services offerings.

Keeping out front: I enjoy the challenge of trying to stay one step ahead to innovate and facilitate synergies across organizations. For me, the payments space encompasses all of this.

Don’t be afraid to fail: I was told by a former leader of mine that if I am not failing some of the time, I am not trying hard enough.

As my career progresses, I continue to find a greater appreciation for that advice. In the payments space, it’s critical to innovate, and part of innovation is trying new things, failing fast, and dusting off our knees to continue to optimize and ultimately maximize.

Opinion on the future: The payments industry is ripe for significant change, especially over the next five to 10 years. Major players may no longer dominate, and fintech firms with their agility will continue to disrupt. I believe we will see payment providers becoming business services powerhouses, enabling the end-to-end needs of their customers.

“In the payments space, it’s critical to innovate, and part of innovation is trying new things, failing fast, and dusting off our knees to continue to optimize and ultimately maximize.”

—Denada Ramnishta

Sal Rehmetullah President & Co-Founder, Fattmerchant Company Twitter: @fattmerchant Getting started: Fattmerchant was my first job in payments. The payments industry has been significantly evolving, and placing software topof-mind has helped Fattmerchant grow to where it is today. Suneera Madhani, founder and CEO, had a big vision of disrupting the payments space. After she originally launched, we were able to combine forces to make Fattmerchant into the company it is today.

All around leader: I lead sales, operations, customer success, and finance—essentially, all aspects of Fattmerchant’s internal day-to-day operations.

Best part of the work: Making the complexity simple.

What did your mentors teach you: Control what you can control. A lot of people spend time saying, what if we could do this or that, rather than focusing on what they can control and executing around circumstances to lead to great results.

Advice for others: Be innovative. Today, the payment ecosystem is changing, and the ability to challenge the status quo is crucial.

Payments in 2030: With so many new payment methods, advancements in the mobile space, and types of products in the marketplace, I personally feel the payment space will look vastly different than even what it is today.

TRANSACTION trends | Spring 2020 25

Kristy Richardson Chief Operating Officer, USPAY Group LLC Company Twitter: @ USPAYGroup Fortuitous beginning: My brother-in-law called me during my second year of college and said he was going into merchant services. He needed someone to call and set appointments for him at local businesses on Long Island. It sounded interesting, so I did it! It was challenging, but each time I was asked a question, it was an opportunity to learn about the industry from the ground up.

Job responsibilities: I am responsible for managing the ongoing business operations daily. I oversee client services, underwriting, and risk management.

Payments a decade from now: The next five to 10 years will bring greater progress in parity for the payments industry. Working with USPAY has shown me that each business we approach has different needs, and we tailor to them specifically. I believe we will also see payments even more segmented by industry needs and wants.

Other passions: My family.

Making sure that I strike a work/ life balance is important. I’m proud that I can hold a significant position with USPAY and work in an environment where my commitment to this balance is respected and encouraged.

“Always stand behind your team and your decisions; have the courage to protect your team in bad times and to give credit to others in good times.”

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—Marta Rzeszowska, ETA CPP

Marta Rzeszowska, ETA CPP Director, Product Portfolio—Online & Mobile, Payments & Retail Solutions, Moneris Solutions Twitter: @martarzeszowska Company Twitter: @moneris First payments gig: I started at Moneris Solutions with a background in technology and software development, and my first role was as a consultant supporting developers integrating into the payment gateway.

An innovator: I am responsible for leading a team of motivated product management professionals to help deliver the latest payment innovations in the digital space to the Canadian market.

Best advice received: You need to have the vision to set the direction, and the courage and passion to stand behind your decisions. Be humble enough to listen to those that are more knowledgeable than you, always be open to other perspectives. And always stand behind your team and your decisions; have the courage to protect your team in bad times and to give credit to others in good times. And lastly, try to do this all with a smile—creating a positive environment for all.

Advice for other young pros: Always think about the user experience and how you can make that experience better at each step.

Chris Sweetland VP, Global Head of Payments Industry Relations, Operations, & Partnerships, Square Twitter: @csweetland012

Adam Sommer VP, Industry Standards, Mastercard Company Twitter: @ MastercardNews

Rawan Shawar Lead Senior Software Engineer, ACI Worldwide Twitter: @RShawar Company Twitter: @ACI_Worldwide Engineering product refinement: I am a senior software engineer and team lead at ACI Worldwide, focused on helping customers implement ACI’s UP Retail Payments solution, leading a team of engineers in the process and actively contributing to the continuous refinement of the product strategy and vision.

Enjoys the change: Constant change keeps me on the edge of my seat. Knowing that I have an influence on the payments solutions used by major payments players around the globe brings a sense of satisfaction and accomplishment, making me ready to face and solve the next industry challenges.

It’s who you know: As the saying goes, “Your network is your net worth.” Surrounding oneself with a support network that values you and sees your strengths is invaluable.

Foreseeing the future of payments: The space will continue to see disruptors and smaller organizations coming up with innovative ways to do things with continued focus on real-time payments adoption globally.

Outside interests: Time with family is priceless! I also continue to look for ways to give back to my communities, at the local and industry level. I will almost always say yes to a rock-climbing session.

Primary responsibilities: I lead Mastercard’s Industry Standards group. Our team represents the company on payments industry standards bodies around the world, manages Mastercard’s global cybersecurity compliance programs, and is an active participant in a variety of key stakeholder groups fostering collaboration on the development of cybersecurity standards.

“Good” advice: I’ve really taken to heart our CEO’s message of “doing well by doing good.” I’ve experienced time and again that doing things the right way, for the right reasons, most often does end up with all going well.

On industry change: In terms of payments cybersecurity, I predict a hyper-focus on IoT. It is vitally important that every connected device be secure, no matter how small or apparently insignificant.

If it can’t be secured, it shouldn’t be connected. Added to that, we envision that every connected device has the potential to be a payments device. So, protecting our deeply connected interactions and transactions will be critical.

Puzzle enthusiast: When I am not spending time with my wife and four kids, my most interesting hobby is probably jigsaw puzzling.

I complete around 2,000 pieces a week.

Current role: I oversee the Industry Relations and Payments Operations organizations at Square.

Our primary responsibility is to advocate on behalf of our customers, lobby for small businesses, and improve commercial and operational relationships to best position our product, marketing, and sales colleagues for success.

Helping merchants and sellers: I enjoy working in the payments industry for the opportunity to work with and support customers (especially small businesses), where this very basic act of value exchange meets the opportunity to improve how merchants and sellers run their business.

“Nice” advice: When given the choice between being right and being kind, choose kind. It stands true both professionally and personally. It’s helped me as a business developer and leader, and increasingly as a people manager, husband, father, and human being.

How to succeed: To amplify a career-long impact, play the long game. Don’t rush to a finish line.

Invest many years truly learning and understanding the mechanics and inner workings of all facets of this business. The most important traits will always be authenticity, lifelong learning, and credibility.

Other passions: I coach Little League baseball in Northern California. I’m an avid skier in the winter.

TRANSACTION trends | Spring 2020 27

Patrick Turiano Director of Marketing, Payment Processing, Paysafe Company Twitter: @ PlugintoPaysafe

“Merchants, small and large, are learning the value of a global footprint and will demand that their payment provider stay ahead of the curve.”

Aleksandra Teichman US Partner Acquisition & Management, American Express Company Twitter: @American-Express

Starting out: My first job in payments was with JCB Credit Cards in merchant acquisition and management. After university, I very much wanted to work in fashion and went to the interview based on the premise of working with luxury retailers. I learned that JCB was an international brand and loved the culture, so I jumped on the opportunity. I knew nothing about payments and had one credit card in my wallet.

What’s next: I predict we will continue to see M&A activity, particularly within the long tail of small to midsize payments players. The most —Aleksandra Teichman dynamic and unique marriages of business are ahead of us. It will also be interesting to see how the top payment players innovate while integrating multiple complex platforms and systems over the next few years.

I foresee the most successful players will have a global lens to their growth strategies. Merchants, small and large, are learning the value of a global footprint and will demand that their payment provider stay ahead of the curve.

Loves and leisure: I find my biggest inspiration in my two children: Zachary and Lailah. I also love experiencing art and nature while traveling. My passion for hiking has taken me around the world, but my bucket list is still long, with trails in Petra, Fitz Roy, and Inca high on the list.

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Career launch: In 2009, I started as a marketing manager for then, Merchant Warehouse (which became Cayan and is now a part of TSYS/Global). I led the company’s (then new) ISV and VAR channel marketing programs, which would eventually become the organization’s primary business channel.

Current role: I lead an awesome team of channel marketers who develop and execute marketing strategies for all of the separate sales channels we employ in the U.S. and Canada. Our team leads a mix of industry involvement, brand awareness, lead generation, and sales enablement activities.

Best thing about the industry: The constant change. I’ve only been in the payments industry for a little less than 12 years, and it’s changed dramatically in such a short period of time. And it’s not just the consolidation; technology, new entrants, and the changing business models have all contributed to this dynamic industry. This dynamicity makes marketing extremely challenging but also gives us the opportunity to think outside of the box and to constantly evolve.

On new competition: As more investment and consolidation continue to shake up the industry, I think more unique competitors with intriguing value propositions will enter the market, maybe from very unlikely places.

Jake West Director, Business Development, Vend Twitter: @DurangoJake Company Twitter: @ VendHelp Current role: I lead Vend’s Partner Program. Vend has an evergrowing ecosystem of partners that leverage Vend’s point of sale to complement their payments value proposition. In the past 18 months, we’ve built the program to over 300 partners.

Best thing about working in payments: Payments are an ever-changing, complex world that continues to evolve and innovate. From changes in payment technology to payment models, as a payments guru, every day is exciting because no two days are the same.

Add clear value: If you effectively articulate your value proposition, it’s only a matter of time until you will win the opportunity.

Experts climb the ladder more quickly: Become an expert as quickly as possible. The sooner that you’re an expert in your respected field, the sooner you will see success. Professional persistence! Follow through, differentiate yourself from others, and continue to communicate value.

Future of payments: No doubt ISVs are taking more of the payments value proposition, but is there a middle ground? Will ISVs partner with traditional payments companies to create a win/win?

The great outdoors: Living in Durango, Colorado, I’m a big outdoor enthusiast. Skiing, mountain biking, fly fishing—recreating in the outdoors is a core passion of mine.

John Waldmann Founder and CEO, Homebase Company Twitter: @ joinhomebase

“No doubt ISVs are taking more of the payments value proposition, but is there a middle ground?”

—Jake West

Current role: I am the CEO of Homebase, the leading provider of employee management solutions to local businesses in the United States. My job is simple: I make sure we’re continually innovating on products and completely dedicated to our customers.

Evolving industry: The products and solutions today are completely different than 11 years ago when I started at First Data. In all of this change, the industry continues to put its relationship with millions of businesses at the center and continues to find new ways to help them. As a partner to the industry, these platforms have allowed us to create unique solutions to bring advanced technology to small businesses who have never had it before.

Payments a decade from now: Payments and software will continue to be more closely integrated every year. The payments industry will unlock new solutions, which will power a deeper specialization of software. In turn, software companies will go deeper into the problems of the specific audiences they serve. In five to 10 years, these integrated payments/software companies will define themselves less by what problems they solve and more by who they solve them for.

Angela Zhang Principal, GI Partners First payments gig: I started my finance career at Goldman Sachs in the Financial Institutions Group. I worked with banks, insurance companies, and fintech businesses (among others), and I observed how payments was a common thread among all of these companies.

Current role: My primary responsibilities include sourcing (software and fintech/payments), evaluating and underwriting new deals, and driving the value creation process post investment.

I also lead the payments value creation initiative at GI, which includes evaluating payments opportunities at other portfolio companies.

Excited about: My favorite part about working in payments is its vast reach and fast pace. It is an industry that touches every business and consumer, crosses borders and geographies, and has the ability to drastically change the daily experiences that people have.

Imagine a world without credit cards! Or Venmo!

Singer and connoisseur: Prior to a career in finance, I seriously considered a career in singing! I love the performing arts and currently serve on the San Francisco Ballet’s ENCORE! Board. Some of my friends also call me the “Zhangat,” as I am always on the search for my next favorite restaurant or recipe. TT

TRANSACTION trends | Spring 2020 29

DEFINING

the Decades

Marking its 30th year, ETA reflects on payments’ most influential technologies and innovations

A

s the Electronic Transactions Association celebrates its 30th anniversary this year, it’s worth considering just how much the payments industry has progressed over the past three decades.

Since its inception as the Bankcard Services Association in Denver in 1990, the organization has grown along with the industry, renaming itself the Electronic Transactions Association and relocating its headquarters to Washington, D.C. Meanwhile, payments infrastructure evolved from simple transactions with bankcards at points of sale in the early 1990s to the full-blown financial technology ecosystem of today—a system that now includes stored credentials, contactless payments, and the ability of consumers to use a wide variety of technologies to conduct transactions around the globe.

ETA has grown into a worldwide organization with more than 500 member companies from 14 countries. With a full-time staff of 16, ETA has a federal lobbying program, more than 20 committees and councils, professional educational courses, and a certification program—in addition to hosting numerous live and virtual networking and professional development events each year and publishing the latest news, trends, and advice across multiple platforms.

As the organization embarks on its fourth decade, we reflect on the technology that spurred its evolution. Here’s a look at

30 Spring 2020 | TRANSACTION trends

the most influential innovations of the payments industry since ETA’s beginnings 30 years ago, according to staff.

The 1990s

Right around the time of ETA’s founding, technology began to fuel innovation in payments. POS systems integrated into cash registers paved the way for retail establishments to process sales in an increasingly faster and more data-driven way. By the early 1990s, electronic registers, barcode scanners, and PC-based POS systems had become the norm at most large retailers. That, coupled with mag-stripe card technology, ushered in a new era of speed and convenience for authorizations and payment transactions in general.

The mid to late 1990s also saw the birth of what we now know as financial technology companies, or “fintechs.” When Microsoft founder Bill Gates declared in 1994 that “banks are dinosaurs, we can bypass them,” during a speech to a Bank Administration Institute conference, the tech industry readily agreed. During this time, the world welcomed a wave of Big Tech companies to the payments industry.

Chief among the early pioneers was PayPal, which launched in 1998 as an app for handheld devices like PalmPilot. The company (first named Confinity) introduced a new business model to the industry—peer-to-peer (P2P) payments—serving as the middleman mostly for online auctions but also for individuals to

The 2000s

As PayPal got off the ground and evolved into the next decade, Amazon, which began its reign as a simple, yet transformative, bookseller on the internet in 1994, continued to innovate. A key advancement introduced by the now global online retail behemoth was the concept of “stored credentials.” This innovation enabled a merchant—or a third party working on the consumer’s behalf—to store data from the purchaser, such as a card number or payment token, to process future purchases for the cardholder.

It also gave the fledgling electronic payments industry an immense lift: Storing credentials made payments extremely convenient for returning consumers, who were no longer required to

BrianAJackson/Getty Images

pass funds to each other. Users connected their checking or credit card accounts to the service through the PayPal website. It was an immediate hit with online merchants, small businesses, and consumers, inspiring the company—and later, rivals—to expand its services with capabilities for payment on mobile devices and much more.

The P2P model also evolved over those years. More recently, it was adopted by financial institutions, allowing consumers to swiftly transfer money from their bank accounts to those of other consumers at different banks. Today, P2P’s popularity among younger consumers and those looking to conduct instant payments makes it a booming segment of industry.

TRANSACTION trends | Spring 2020 31

re-enter their information prior to checkout. In turn, that boosted revenues for merchants and payments companies by facilitating recurring and one-click payments.

These days, consumers don’t even need to log on to a traditional computer or phone to order goods. The Internet of Things, or IoT, allows for payments by a stored credential, coupled with identity verification in a smart device. IoT technology is now at the head of growth areas such as unattended payments. Vending machines, for example, have become increasingly sophisticated, with features such as touchscreens and the ability to accept multiple forms of payment.

More advanced IoT technology, such as smartphones and

“[SQUARE’S] SIMPLE, PLUGAND-PLAY “DONGLE” REQUIRED LITTLE MORE THAN A MOBILE DEVICE AND INTERNET CONNECTION TO ACCEPT PAYMENTS, AND THE COMPANY’S CUSTOMER-FRIENDLY APPROACH FORCED THE INDUSTRY TO RETHINK HOW IT ADDED VALUE TO MERCHANT CLIENTS’ BUSINESSES.” watches, internet-connected by refrigerators, fitness trackers, home security systems, and even cars, can enable touchless orders and payments for a wide range of products—ranging from a gallon of milk to concert tickets to a prescription refill.

In 2006, industry players benefitted from a more standardized and secure approach to electronic payments when the Payment Card Industry Standards Security Council (PCI SSC) was formed. The PCI SSC launched to enhance global payment account data security by developing standards and supporting services that drive education, awareness, and effective implementation by stakeholders. Founding members—including American Express, Discover, JCB International, MasterCard, and Visa Inc.—share in governance and execution of the organization’s work. Participating organizations agree to incorporate the PCI Data Security Standard as part of the technical requirements for their respective data security compliance programs, and recognize qualified secu32 Spring 2020 | TRANSACTION trends

rity assessors and approved scanning vendors qualified by PCI SSC. Meanwhile, the boom in mobile phones and more sophisticated smartphones during the early 2000s gave way to the introduction of mobile wallets and payments. Starting in 2009, and spanning about the next five years, telecommunications companies tried to gain a foothold in the phone ecosystem by controlling mobile payments with Isis/Softcard.

The venture was a collaboration among Verizon Wireless, TMobile, and AT&T that utilized near-field communication (NFC) to enable its users to make purchases using only their phones. While its aim was convenience, Softcard required users to load money onto a prepaid card to use it. The endeavor failed to gain consumer attention, and eventually the service unplugged and went dark. However, it set the stage for other tech companies to develop the more advanced general purpose and propriety wallets that we see today. In February 2015, Google announced that its new competing system— Google Wallet—with support from Sprint and MetroPCS, had purchased critical assets from Softcard.

2009 also marked the entrance of fintech industry disrupter Square, which bypassed the traditional merchant acquirer channels and marketed its out-of-the-box payments solutions directly to small businesses and micromerchants.

Its simple, plug-and-play “dongle” required little more than a mobile device and internet connection to accept payments, and the company’s customer-friendly approach forced the industry to rethink how it added value to merchant clients’ businesses. As a result, other fintech payment companies, such as Poynt and Clover, followed suit with their own wrinkles on the mPOS transaction, and traditional players innovated.

Today’s mPOS software is cloud-based, so all data is stored remotely and securely. Many merchants appreciate the benefits offered by mPOS because the software also can provide an inventory management system, organize and keep track of loyalty programs, deploy antitheft features, and measure sales reports. This “software-as-a-service” concept is now championed by payment facilitators that add payments acceptance to their vertical suite of software solutions.

The 2010s

With the evolution of smartphone technologies also has come the rise of a series of high-profile “Pay” apps. Apple Pay launched in 2014, followed shortly the next year by Google Pay and Samsung Pay. Since then, mobile payments have continued to grow, with most major phone manufacturers offering a payment solution. Because these market leaders own and control the apps and hardware installed on smartphones, they were deemed integral to the widespread adoption of enabling technologies such as NFC and magnetic secure transmission (MST) to the U.S. market, which continues to lag behind other countries in mobile payment use. Both NFC and MST technologies reduce the amount of time customers spend at

tadamichi/Getty Images

Overseas Influencers When assessing the history of digital payments, it’s impossible to ignore the role that China played in accelerating technology. Starting in 2015, the Chinese marketplace began to move rapidly toward quick response (QR) codes for all kinds of payments.

Today, China is the largest and fastest-growing mobile payments market in the world. The big winners in China’s shift to QR codes have been mobile payment solution providers.

Chinese consumers now can pay for almost anything by using their mobile phones to scan QR codes. By far, the most prevalent mobile payment platforms in China are WeChat Pay, owned by

Tencent, and Alipay, which is the payments arm of global B2B and retail giant Alibaba. In China, payment methods using QR codes replaced cash and cards in just five years.

In August 2019, WeChat Pay introduced its Frog Pro. The technology enables customers to make payments by simply scanning their faces—without even needing their mobile phones. Alipay also unveiled the Dragonfly, its own facial recognition payment software, last year.

The United States, by contrast, lags behind on cashless, touchless payments—at least for now.

However, fears of contamination in the age of the coronavirus are expected to prod U.S. merchants and consumers to embrace the technology more rapidly.

checkout by allowing “proximity card” payments; consumers only need to move their smartphones near the POS terminal to communicate payment information within the app.

The migration to EMV chip cards brought a new level of security to payments. EMV, which originally stood for “Europay, Mastercard, and Visa,” the three companies that created the standard, is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions. EMV cards brought enhanced security and reduced credit card fraud compared to magneticstripe cards through the unique transaction codes created each time an EMV card is used.

While EMV gained ground in Europe in the early 2010s, retailers in the United States were required to begin accepting EMV cards in October 2015. By September 2019, 3.7 million U.S. merchants were able to process EMV transactions, according to Visa, resulting in significant decreases in counterfeit fraud.

EMV systems are now available in contactless form. These devices allow transactions to be made by waving or tapping on an EMV contactless-enabled terminal. Similar to contact chip cards, they also support cryptographic functions for more secure transactions than with traditional magnetic-stripe cards.

Just about all credit and debit cards produced in 2020 have it, and all new POS terminals can receive the signal.

The Next Chapter

Looking deeper into the industry’s bright future, cuttingedge technologies like blockchain and cryptocurrency are likely to gain a greater foothold in the mainstream payments realm. Meanwhile, trends like PIN-on-glass acceptance allow customers to use their personal identification numbers directly on the touchscreens for mPOS transactions, giving merchants and customers an added level of security over current mobile readers.

Biometrics—such as Touch ID, contactless fingerprinting, facial recognition, and iris scanning—already in play on many smartphones and mobile payment apps, are expanding their reach in the payments industry. It is expected that, as more biometric identifiers become available and are used in conjunction with one another, multifactor biometric authentication may become a reality.

New technologies will continue to expand the market, and payments professionals who seek an understanding of the latest advances will be able to educate their customers and appropriately plan for the future of payments. As was the case when ETA first entered the scene in 1990, consumers and merchants still want easy, secure transactions. Technology is enabling capabilities we could only dream of 30 years ago. The next 30 years promise to be just as exciting. TT TRANSACTION trends | Spring 2020 33

PEOPLE

Chris Lee ETA Board President and CEO of BillingTree Chris Lee has been in the payments business for more than three decades. Her experience runs the gamut, having worked in many facets of the industry for companies such as Moneris, Vantiv, National Processing Company, Bank of America, and Mastercard.

Here, Lee shares insights on the effects of the COVID-19 pandemic and discusses the past and future of ETA. How have you seen the payments community support its merchant clients?

I think that it’s never been more important as ETA members to educate and provide timely updates to our membership. Overall, I believe that we should pull together as a payments community to share new ideas, best practices, and concerns and just to stay in touch. We all have a common goal, and that is for the industry to continue to grow and prosper. That also includes keeping close ties with merchants so we can teach them how to do exception processing, conduct fraud monitoring, and even adopt technology. A familiar example would be restaurants, which have had to get out of their comfort zones to pivot rapidly. Many restaurants needed to move quickly, including creating a delivery and pickup-only menu via their website, using a wireless device or tablet to process transactions, in addition to capturing a payment card on file to make the payment process easier for the customer so they come back in the future.

Which payment technologies will be significantly affected by the pandemic and consumer behavior?

The use of mobile wallets is growing, especially among younger consumers, but there have been some concerns that have slowed mobile wallet adoption. Consumer behavior, particularly in the healthcare industry, has changed dramatically during the current pandemic. Patients simply aren’t coming in and making payments on a card reader. Healthcare patients are specifically concerned with “touching” anything that’s not absolutely necessary when at a medical provider.

Contrast that with the traditional healthcare payment process, which is card present. The front office expects you to hand over your card, and now there’s a disconnect in the process that must be reconciled. The payment technologies that are going to be most impacted are patient portals, where the consumer can go online and pay a medical bill or set up a payment plan on their own. In addition, virtual payment channels like IVR or automated phone payments, and SMS payments where patients can pay by text, have the potential to grow dramatically.

How will the crisis affect long-term prospects of fintech startups?

I certainly expect new fintechs to pop up to solve problems in the financial industry. Some of them might find it more challenging to get funded, especially if they see an anticipated downturn during the process. With so many fintech startups, many will be focused on offering virtual and digital payment channels to conform to our new reality.

Switching to a happier topic—it’s ETA’s 30th anniversary. As a long-time member, what’s your favorite memory of being involved with ETA?

I’ve always enjoyed the President’s Dinner. I’ve met so many new people at that event and it’s really amazing catching up with colleagues in the industry whom I’ve known for years. Over the years, I’ve watched my dearest friends in the payment space win awards and be recognized for their contributions, and that’s just an incredible experience. I must say that the level of networking and camaraderie is something I’ve

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never experienced at any other association I’ve been involved with.

Also, as I look back, I’ve enjoyed the exhibit hall because it’s so enlightening to see who has the latest and greatest product innovation and exhibit booths. Over 35 years in the industry, I’ve seen products evolve on the exhibit hall floor, going from the first electronic payment terminals to today, where we have connected cars that can process payments.

What are some of the board’s priorities for driving the organization into the next decade?

One priority we’ve been focused on is supporting the past while promoting the future. ETA has been around for 30 years, and it’s clearly different now than it was back then. It really started with some entrepreneurial payments people creating an industry association around payment acceptance that didn’t exist before.

Now there are so many ways payments are being made, and the ecosystem of who and how payments are offered has evolved and changed in dramatic fashion—and therefore ETA needs to change, too. First it was restaurants and retail that accepted payments, and it’s morphed into the card-not-present model dominating the industry.

One of the things ETA thinks about is how to serve and acknowledge our long-standing members while paving the way for and welcoming future generations. Gen Z is now entering the workforce, and half of them don’t have a credit card. But, they are leading the way in alternative payment options like in-app purchases and mobile wallets, so there’s an educational component around payment channels and the history of payments. In addition, we must remain relevant to our member companies. With so much consolidation in the industry, we want to make sure we serve the world’s largest processor in addition to all the smaller companies that are out there. We’ve had to pivot to meet the needs of all our members, and we will continue to do that in the future. And as always, keeping up with government regulations and providing education about our industry will be paramount to our mission into the next decade and beyond. TT —Josephine Rossi

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