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Transformational payments solutions:BBVA debuted a facial recognition payments system at the restaurants in their Madrid headquarters to take the lead in the frictionless payments space. Customers can purchase items by smiling at a camera booth adjacent to cash registers; the system will recognize the registered faces and automatically charge them. The system is currently being piloted for pre-set meals and drinks. BBVA plans to further enhance the system by enabling active scanning of the customers’ food trays or connecting to product RFID tags to identify what customers select within the store, and bill them accordingly. Source: BBVA |
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Regulatory landscape: The Supreme Court ruled that American Express did not violate the antitrust laws by including anti-steering provisions in its contracts with merchants. The provisions prohibit merchants from encouraging customers to use other cards or forms of payments. The majority in the 5-to-4 opinion noted that card companies serve both merchants and consumers and hence are different from traditional markets. The minority pointed out that the contract between card companies and merchants should be reviewed in isolation and is anti-competitive. The case was filed in 2010 by the Justice Department and 17 states against several credit card companies. Visa and MasterCard settled and dropped the provisions, while American Express fought it.Source: U.S. News |
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Customers’ evolving expectations: In order to meet the evolving customer expectations of less friction in digital payments, PayPal launched Smart Payment Buttons that change dynamically to present the most relevant payment methods for a given user in a given geography. Smart buttons reflect users’ preferred PayPal payment options based on their previous activities. PayPal plans to enable local alternative payment methods such as iDEAL and Giropay in smart buttons in the next few weeks. Once added, pertinent local options will be shown based on users’ location at the time of shopping. This will also allow PayPal merchants to accept international payment methods by adding a few additional lines of code to their sites and apps.Source: PayPal |
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Data:Consumers are still concerned about using frictionless payments, according to a new consumer payments study by Paysafe, a UK online payment company. The study defined frictionless payments as invisible transactions that are made behind-the-scenes in apps to enhance customer experience. Security and data privacy were considered key concerns against using frictionless payments by 50% and 48% of consumers, respectively. 65% of respondents believed that voice-activated systems are not safe, with 63% worrying that they would accidentally be overcharged. 57% stated that checkout-free stores are too risky to use. Source: Paysafe |
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New providers: Amazon plans to launch a co-branded credit card focused on small businesses in the U.S. as part of a multi-year partnership with American Express. Earlier this year, Amazon Business – Amazon’s B2B marketplace and purchasing solution – and American Express launched an enhanced data solution that provides line-item level transaction information to businesses, which would allow more effective monitoring and analytics. Details regarding the launch date and rewards program are still under development. The offering, which is expected to be targeted at businesses with less than $10 million in revenue, will be Amazon’s first small-business credit cardSource: American Express and Bloomberg |
PARTNERSHIP SPOTLIGHT
- Venmo introduced a debit card in partnership with MasterCard
Card purchases will show up in users' Venmo account with the option to split with friends, and be debited from their Venmo balance or a linked funding source if needed
Venmo beta-tested a Visa-branded debit card last year, following the launch of Square's prepaid card tied to the Square Cash app
The card offering builds on Venmo's effort to expand into retail transactions through Pay With Venmo, a service that allows users to pay with their Venmo balance on eCommerce sites
Source: Reuters
- Worldpay has partnered with IDEMIA to test dynamic CVV debit cards with U.S. financial institutions
In lieu of static CVV codes printed on the back, IDEMIA's Motion Code cards have a small digital screen that changes the CVV number periodically. Worldpay would be the first payment processor in the U.S. to integrate the technology into its platform
Transactions using Motion Code cards flow to Worldpay to check the CVVs against the server to ensure authenticity, prior to issuer authorization; no merchant integration is required
Source: Worldpay
MERCHANT SPOTLIGHT
- ExxonMobil introduced DriverDash, a mobile payments solution that allows fleet drivers to make fuel transactions from inside their vehicles
- DriverDash uses biometrics such as a thumbprint or a facial recognition scan via a mobile device to authorize and document transactions. To enhance security, the app can be used only upon receiving a fleet manager’s invite
The solution is currently available at more than 11,000 ExxonMobil stations in the U.S. and is expected to expand to other merchants that accept WEX Fleet Cards, which are used by over 4 million fleet drivers in the U.S.
Source: WEX
- Microsoft is developing automated check-out services for retailers to compete with Amazon Go, an automated grocery store operated by Amazon
- Microsoft is working on systems that would track what shoppers add to carts based on camera sensors and artificial intelligence. The primary challenge has been to balance the customer experience with the affordability of the technology
- Walmart has reportedly had talks with Microsoft about a potential partnership, alluding to Microsoft's intention to bring the technology to larger supermarket formats. This comes as a part of an industry-wide attempt to compete with Amazon Go, which recently confirmed it will open its second location in Seattle this fall
Source: Reuters
Oliver Wyman is a global leader in management consulting with offices in 50+ cities across nearly 30 countries. Our Payments practice works with constituents across the payments value chain to deliver insights with real impact, combining deep industry expertise with powerful consulting capabilities. To have a discussion with Oliver Wyman on your payments issues and opportunities, please contact Beth Costa or Rob Mau at payments@oliverwyman.com.
Note that Oliver Wyman believes the curated content to be reliable, but it has not been verified. As such, Oliver Wyman gives no warranty as to the accuracy of such information. Oliver Wyman’s curation of such content should not be interpreted as an endorsement of the organizations that published the content.
