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PRIMING ACQUIRERS FOR OMNI-CHANEL PLAY

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PRIMING ACQUIRERS FOR OMNI-CHANEL PLAY

An interplay of factors –competition from non-traditional players, constant margin pressure and the ongoing shift to digital consumerism and omni-channel commerce — is having a significant impact on the merchant acquiring business.Merchants, increasingly, are partnering with acquirers, who can manage the complete payment process and better navigate the omni-channel payment landscape. Established acquirers need to engage with merchants in innovative ways.Effective service management is now the key to sustain growth and capture new opportunities.

Suresh Rajagopalan

Suresh Rajagopalan

In most acquiring organizations, the underlying business support infrastructure comprises discrete payment processing systems, having been assembled in response to specific service needs. Many channels simply operate under a unified brand, but with a completely siloed view of external merchants. As a result, acquirers are struggling to keep pace with market-driven changes. For instance, merchants across markets have a fragmented channel experience, as acquirers rely on transaction processing systems dedicated to specific payment channels.

Traditional POS transactions originating from brick and mortar stores are processed by a separate switch, compared to transactions originating from digital channels. This also requires merchants to install separate software integrated with the merchant’s IT systems. Likewise, multiple systems, result in duplication of critical functions and workflows – for example merchant accounts need to be created on each payment channels.The infrastructure is inefficient, expensive to maintain and provides limited operational and business visibility, impeding ability to service merchants efficiently.

How can Acquirers Respond?

To be competitive and improve top-line, acquirers need to strengthen backend service capabilities. With a large base of merchants and a proliferation of channels and systems this is a challenging task. A Merchant ServicesHub will centrally manage key functions, enabling acquirers to deliver an integrated payment processing and service experience across all touch points. Overall the solution aims to simplify business operations and brings significant advantages. It can slash OPEX by eliminating duplication of work process, accelerate time to market and improve merchant satisfaction.

The complete breadth of capabilities includes:

Unified Transaction Processing: Omni-channel is a macro-trend defining the retail payments world. With the emergence of new payment instruments and the blurring of lines between in-store, online and mobile commerce, acquirers need to offer integrated payment systems for physical and digital transactions. The unified transaction processing layer rests between the front-end channels (e.g. POS, UPI in India, Mobile Wallets, Online Channels) and the traditional interchange and bank payment networks. This single integration point replaces the multiple interfaces required by the conventional approach and flexibly enables payment acceptance for merchants, regardless of payment type or channel of origin.

SharedBack-Office: The merchant services hub provides a shared repository of common business service functions across channels. These include merchant onboarding, accounting and settlement. As an example, a centralized Know Your Customer process, as opposed to verifying the merchant for each payment channel that needs to be activated can save onboarding costs and improve time to market. Likewise, settlement processes can be automated across multiple transaction channels and accounts, eliminating the need to manually aggregate transaction data from disparate systems.This significantly improves the acquirers’ ability to offer innovative settlement terms.For instance, acquirers settle accounts of large merchants times a day as compared to end of day, improving merchant stickiness.

Analytics Layer: Underlying the unified approach is the ability to have a holistic view of the business.Empowered by advanced analytics, acquirers can generate actionable insights on the overall profitability and performance of the merchant portfolio across channels. A broad view of the merchant relationship allows acquirers to enhance merchant engagement, optimize quality of portfolio, improve merchant lifetime value, and make intelligent pricing decisions based on performance.

Ancillary Services: The hub also aggregates data that can be fed into ancillary systems such as Services Monitoring and CRM, significantly improving quality of service offered to merchants. With a single view of the merchant network, acquirers can take immediate action in case of network events, ensuring high throughput and availability a key service quality element. Likewise, CRM departments can be proactively informed of issues enabling quicker resolution of merchant queries. 

Making the Vision a Reality

Powered by technology, analytics, mobility and flexible marketing operations, acquirers can deliver innovative experiences in ways that bridge marketing and service interactions. And they can do so by integrating across all functions, products and services.

Creating and implementing an integrated Merchant Services Hub is however a multi-year journey.Most acquirers will need to deploy merchant services hub in stages and there is no single implementation blueprint. Some acquirers may favor a front-end overhaul where the objective is to simplify merchant on-boarding. Other acquirers may want to improve business efficiencies and integrate back-end functions for example Settlement, Accounting CRM, typically driven by a desire for efficient IT operations.

The choice of the most appropriate model depends on several factors including whether the acquirer is driven by technological business or strategic innovations. Achieving an omni-channel reality requires executional courage to move forward, the right organizational structure, and a partner who can bring global experience to get things done. FSS is helping acquires to make the transition to a more integrated services approach.

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Facebook ‘refriends’ Australia after changes to media laws

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Facebook 'refriends' Australia after changes to media laws 1

By Byron Kaye and Colin Packham

CANBERRA (Reuters) – Facebook will restore Australian news pages, ending an unprecedented week-long blackout after wringing concessions from the government over a proposed law that will require tech giants to pay traditional media companies for their content.

Both sides claimed victory in the clash, which has drawn global attention as countries including Canada and Britain consider similar steps to rein in the dominant tech platforms and preserve media diversity.

While some analysts said Facebook had defended its lucrative model of collecting ad money for clicks on news it shows, others said the compromise – which includes a deal on how to resolve disputes – could pay off for the media industry, or at least for publishers with reach and political clout.

“Facebook has scored a big win,” said independent British technology analyst Richard Windsor, adding the concessions it made “virtually guarantee that it will be business as usual from here on.”

Australia and the social media group had been locked in a standoff after the government introduced legislation that challenged Facebook and Alphabet Inc’s Google’s dominance in the news content market.

Facebook blocked Australian users on Feb. 17 from sharing and viewing news content on its popular social media platform, drawing criticism from publishers and the government.

But after talks between Treasurer Josh Frydenberg and Facebook CEO Mark Zuckerberg, a concession deal was struck, with Australian news expected to return to the social media site in coming days.

“Facebook has refriended Australia, and Australian news will be restored to the Facebook platform,” Frydenberg told reporters in Canberra.

Frydenberg said Australia had been a “proxy battle for the world” as other jurisdictions engage with tech companies over a range of issues around news and content.

Australia will offer four amendments, which include a change to the proposed mandatory arbitration mechanism used when the tech giants cannot reach a deal with publishers over fair payment for displaying news content.

‘UNTESTED’

Facebook said it was satisfied with the revisions, which will need to be implemented in legislation currently before the parliament.

“Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation,” Facebook Vice President of Global News Partnerships Campbell Brown said in a statement online.

The company would continue to invest in news globally but also “resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook.”

Analysts said while the concessions marked some progress for tech platforms, the government and the media, there remained many uncertainties about how the law would work.

“Retaining unilateral control over which publishers they do cash deals with as well as control over if and how news appears on Facebook surely looks more attractive to Menlo Park than the alternative,” said Rasmus Nielsen, head of the Reuters Institute for the Study of Journalism, referring to Facebook headquarters.

Any deals that Facebook strikes are likely to benefit the bottom line of News Corp and a few other big Australian publishers, added Nielsen, but whether smaller outlets win such deals remains to be seen.

Tama Leaver, professor of internet studies at Australia’s Curtin University, said Facebook’s negotiating tactics had dented its reputation, although it was too early to say how the proposed law would work.

“It’s like a gun that sits in the Treasurer’s desk that hasn’t been used or tested,” said Leaver.

COOLING-OFF PERIOD

The amendments include an additional two-month mediation period before the government-appointed arbitrator intervenes, giving the parties more time to reach a private deal.

It also inserts a rule that an internet company’s existing media deals be taken into account before the rules take effect, a measure that Frydenberg said would encourage internet companies to strike deals with smaller outlets.

The so-called Media Bargaining Code has been designed by the government and competition regulator to address a power imbalance between the social media giants and publishers when negotiating payment for news content used on the tech firms’ sites.

Media companies have argued that they should be compensated for the links that drive audiences, and advertising dollars, to the internet companies’ platforms.

A spokesman for Australian publisher and broadcaster Nine Entertainment Co Ltd welcomed the government’s compromise, which it said moved “Facebook back into the negotiations with Australian media organisations.”

Major television broadcaster and newspaper publisher Seven West Media Ltd said it had signed a letter of intent to strike a content supply deal with Facebook within 60 days.

A representative of News Corp, which has a major presence in Australia’s news industry and last week announced a global licensing deal with Google, was not immediately available for comment.

Frydenberg said Google had welcomed the changes. A Google spokesman declined to comment.

Google also previously threatened to withdraw its search engine from Australia but later struck a series of deals with publishers.

The government will introduce the amendments to Australia’s parliament on Tuesday, Frydenberg said. The country’s two houses of parliament will need to approve the amended proposal before it becomes law.

(Reporting by Colin Packham and Byron Kaye; additional reporting by Renju Jose, Kate Holton and Douglas Busvine; Writing by Jonathan Barrett; Editing by Sam Holmes and Mark Potter)

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Oil rises on positive forecasts, slow U.S. output restart

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Oil rises on positive forecasts, slow U.S. output restart 2

By Bozorgmehr Sharafedin

LONDON (Reuters) – Oil prices rose on Tuesday, underpinned by the likely easing of COVID-19 lockdowns around the world, positive economic forecasts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut down crude production.

Brent crude was up 36 cents, or 0.5%, at $65.60 a barrel by 1212 GMT, and U.S. crude rose 39 cents, or 0.6%, to $62.09 a barrel.

Both contracts rose more than $1 earlier in the session.

“Vaccine news is helping oil, as the likely removal of mobility restrictions over the coming months on the back of vaccine rollouts should further boost the oil demand and price recovery,” said UBS oil analyst Giovanni Staunovo.

Commerzbank analyst Eugen Weinberg said optimistic oil price forecasts issued by leading U.S. brokers had also contributed to the latest upswing in prices.

Goldman Sachs expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously, and $75 in the third quarter from $65 forecast earlier.

Morgan Stanley expects Brent crude to climb to $70 in the third quarter.

“New COVID-19 cases are falling fast globally, mobility statistics are bottoming out and are starting to improve, and in non-OECD countries, refineries are already running as hard as before COVID-19,” Morgan Stanley said in a note.

Bank of America said Brent prices could temporarily spike to $70 per barrel in the second quarter.

Disruptions in Texas caused by last week’s winter storm also supported oil prices. Some U.S. shale producers forecast lower oil output in the first quarter.

Stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday.

A weaker dollar also provided some support to oil as crude prices tend to move inversely to the U.S. currency.

(Reporting by Bozorgmehr Sharafedin in London, additional reporting by Jessica Jaganathan in Singapore; editing by David Evans and John Stonestreet)

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UK-Japan trade deal settled nerves for Japanese firms, Honda executive says

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UK-Japan trade deal settled nerves for Japanese firms, Honda executive says 3

LONDON (Reuters) – Britain’s trade deal with Japan settled the nerves of a lot of Japanese businesses in the United Kingdom and gives them confidence about their future prospects there, a senior Honda executive said on Tuesday.

Japan, the world’s third-largest economy, has since the 1980s made the United Kingdom its favoured European destination for investment, with the likes of Nissan, Toyota and Honda using the country as a launchpad into Europe.

But Britain’s shock 2016 decision to leave the European Union had prompted Japan to express unusually strong public concerns. Their companies and investors warned that a disorderly exit from the EU would force them to rethink their four-decade bet on Britain.

“We welcome very much the Japanese trade agreement which as a Japanese businesses was very welcomed,” Ian Howells, senior vice president at Honda Motor Europe, told a parliamentary committee.

“On the point around confidence, that certainly amongst my peers in Japanese companies was very much welcomed, and probably settled a lot of nerves in terms of their trading prospects in the UK going forward.”

Britain and Japan formally signed a trade agreement in October, marking Britain’s first big post-Brexit deal on trade. It has also made a formal request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Japan is also a member.

(Reporting by Kate Holton)

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