The Merchant Payments Digest is a regular update from Oliver Wyman to keep merchants apprised of developments in the rapidly shifting payments space.
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Transformational payments solutions: Google is piloting a payments solution that would allow voice authentication for transactions. Authentication is based on Google’s Voice Match technology, which recognizes an individual through their voice. The feature is initially available for in-app Google Play purchases, along with restaurant orders.Source: PYMNTS |
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Rules and standards: Visa and Mastercard are taking steps to support merchants affected by COVID-19. Both networks are suspending their chargeback monitoring programs through July for merchants in the travel sector to help address the disruptions caused by the pandemic. In addition, fraud monitoring programs are being relaxed by the two networks. The pause in these programs will help merchants who face an increase in chargebacks or fraud dollar volume avoid additional scrutiny and oversight from the networks.Source: Visa, Mastercard |
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Customers’ evolving expectations: Visa data shows that consumer spending in the US began to recover in May. With payments volumes down 5% year over year, this represents a marked improvement from April, when volumes declined 18% year over year. However, the pandemic has not impacted all payments providers equally. Specifically, although spending has declined due to the pandemic, buy now, pay later (aka POS financing) solutions have gained traction. For instance, Afterpay added one million new users during the pandemic and has seen its user base increase by ~35% since the beginning of the year. |
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Data: Fraud attempts have increased significantly during the pandemic, and in April were up 35% year-over-year in dollar terms, according to FIS. Fraud tactics have included generating and testing card numbers, as well as phishing attacks. According to Sift, fraud has been especially problematic in the travel and education sectors, as fraud rates for both industries have increased ~20% compared to 2019 as of early June.Source: Business Insider, Sift |
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New providers: Samsung, SoFi, and Mastercard are partnering to launch Samsung Money, a new debit offering. Samsung Money will integrate with Samsung Pay to offer instant access and account management features. Consumer funds are stored in an associated cash management account that pays interest, and users can earn Samsung Rewards points. A US launch is scheduled for summer 2020.Source: Samsung |
PARTNERSHIP SPOTLIGHT
- Uber and MoneyGram are offering discounted digital P2P transfers for Uber’s drivers and gig economy workers. By lowering costs, this initiative will help support workers who use MoneyGram to send remittances to foreign countries.
Source: PYMNTS - FIS is supporting JCB’s effort to process cross-border QR code payments, which will allow JCB cardholders to use QR code payments when they travel abroad. Initial rollout is planned for transactions between Vietnam and Thailand, with a subsequent expansion across Asia. The new payment method will be integrated into FIS’s platform, allowing its partner banks to enable this for their customers to use across merchants that accept JCB cards.
Source: JCB
MERCHANT SPOTLIGHT
- Facebook and DoorDash both announced new tools to support their merchants’ e-Commerce efforts. Facebook is launching Facebook Shops, which merchants can use to build digital storefronts on Facebook and Instagram. This service is supported by partners, including Shopify, that will provide merchants with management tools. Payments may be processed through Facebook or through the aforementioned partners. DoorDash’s new solution, Storefront, enables restaurant owners to build websites that support online ordering. DoorDash, which would fulfill delivery orders made through Storefront, estimates that 40% of its merchants do not currently have a standalone online ordering solution, and expects Storefront to help close that gap.
Source: TechCrunch, Shopify, The Verge, The Verge
CONSUMER SPOTLIGHT
As businesses re-open and consumer confidence in personal finances improves in May, willingness to spend still remains low. See the new findings from our COVID-19 US Shopping Outlook Survey, which measures consumers’ attitudes during the pandemic and tracks sentiment using our proprietary Shopping Confidence Index.
To have a discussion with Oliver Wyman on your payments issues and opportunities, please contact Beth Costa, Rob Mau, or Rick Oxenhandler 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.
