by Normand Provost, nexo standards
The global payments market is deeply fragmented. With rapidly evolving technologies, new regulations and increasing globalisation, it can be hard for players to keep up. The answer to simplifying these complexities? Standardisation.
As it has done across a number of other industries, standardisation offers huge potential to deliver greater operational efficiency and meet a variety of core business challenges that when overcome, enables all payments industry stakeholders, including merchants, to get ahead of the competition in both domestic and international markets.
The new age of customer centricity
For merchants, building trust with their end customers is key. Payment standards offer a simple way to deliver a consistent user experience at the point of interaction between multiple payment types and, crucially, across borders too. Even such subtle markers of familiarity can improve perception of a merchant’s brand.
The long-term efficiencies of standardised systems also benefit the customer too. With internal resources freed from ‘firefighting’ payments, efforts can be redirected into delivering new innovative services, like mobile payment services and value-added loyalty schemes. Plus, on a standardised system, the rollout and maintenance of these services across all platforms is quicker, slicker and borderless with standardisation.
Going global and breaking down borders
By extension, standardisation also dramatically simplifies global expansion. For merchants looking to set up operations in new territories or acquire overseas brands as part of their international growth strategy, merchant’s international payment acceptance standards enable payments integration to facilitate growth, not inhibit it with complexity.
What about existing multinational retailers? Implementing standards offer the opportunity to harmonise existing systems globally, and enables them to deliver a fully interoperable, cross-border payments infrastructure.
All together now!
Centralising and unifying payments management for any stakeholder can realise huge efficiencies and cost savings. By migrating systems to standards like nexo’s protocols, international retailers can consolidate all their global payments into ‘the same bucket’. By enabling merchants to group payments together, retailers are empowered to negotiate volume-based deals via a smaller number of acquiring banks, driving down their total cost of payment acceptance even further.
With the use of global standards, merchants can also strengthen and consolidate their relationships with vendors and minimise expenditure on hardware and software solutions and maintenance. By standardising systems, merchants can establish a consistent baseline upon which they evaluate solutions from different vendors, migrate easily and efficiently between different solutions when change is required, and engage with vendors on a truly global scale.
Resisting vendor lock-in
Innovation and a fairer playing field are defining factors of any industry where standards are prolific. In payments, this is no different. Merchants struggle to resist vendor lock-in, which leaves them prohibited by, and vulnerable to, high costs. An open, standardised market lets vendors compete on equal terms, meaning merchants get a fairer deal and vendors are encouraged to deliver more innovative, competitive offerings.
Realising a standardised payment ecosystem
Card is king in retail. So whether ‘card present’ transactions, digital wallets or ‘card on file’, having one global card payment acceptance system standardising this exchange of payment information multilaterally can deliver huge benefits for all players in the ecosystem.
We can think of ISO 20022 as the ’lingua franca’ for the whole financial ecosystem – a universal messaging language for all kinds of transactions, including those performed with cards. nexo standards’ specifications and protocols are the card payments acceptance arm of ISO 20022.
Standardisation is the tool to help merchants achieve simplicity, efficiency and true consolidation in the payments market in a complex domain. The collaborative power of industry standards bodies puts the various needs of the ecosystem’s players on equal terms. By working towards a vision of a borderless, interoperable global payments system, the industry can empower itself to keep tackling its challenges quickly and efficiently, whilst breaking down the fragmentation that’s holding it back.