The Merchant Payments Digest is a regular update from Oliver Wyman to keep merchants apprised of developments in the rapidly shifting payments space.
Payments Spotlight
Transformational payments solutions
Chase announced the launch of QuickAccept, a service designed to help small and medium-sized businesses (SMBs) accept card payments either through a mobile app or a contactless card reader and receive same-day settlement into their Chase business checking account. With this move, Chase will compete with Fintechs such as Square and Fiserv that offer similar card acceptance terminals but typically charge a fee for faster settlement. The bank plans to migrate a significant number of its 3 MM+ SMB customers to this service, targeting merchants with less than $500,000 in annual revenue and who look to avoid paying fees, while also streamlining the onboarding and underwriting process for accepting payments using information from their bank accounts.
Source: CNBC
Rules and standards
The US Department of Justice (DOJ) has filed a lawsuit to block Visa’s $5.3 BN acquisition of Plaid, deeming it to be anti-competitive. Plaid, a Fintech, connects consumers’ bank accounts to wallets and other applications that can be used for online purchases and has existing connections to US financial institutions accounting for 200 MM consumer bank accounts. The DOJ is opposing the deal on the grounds that prior to the proposed acquisition, Plaid had developed plans for an ACH-based service for online purchases that could potentially be a viable competitor to Visa, which has a ~70% share of online debit transactions, and that could result in cost savings for merchants.
Source: CNN
Customers’ evolving expectations
As restaurants slowly open for in-person dining, they are gearing towards touchless dining to cater to customers in a pandemic-conscious world. To facilitate this, Fiserv’s Clover and Square have launched a QR-code based touchless order-and-pay service for their restaurant clients. Using the service, customers can use digital menus to place their orders by scanning a QR code at the table or using their smartphone, which is sent directly to the kitchen via point-of-sale (POS) integration. The payment is also processed directly using a digital wallet such as Apple Pay or Google Pay, without the need to use physical plastic.
Source: Clover and Business Insider
Data
Highlighting the growing importance of data, Amazon has launched a new program that pays customers for providing information about their non-Amazon purchases and payments. The program, Amazon Shopper Panel, offers a $10 reward to customers that send in 10 receipts per month for any purchases made at non-Amazon merchants across a wide range of verticals. Additionally, Amazon will also run surveys intended to gather information about preferences around specific products and ads, which will come with separate rewards. The rewards can be applied to a customer’s Amazon Balance or donated to charity.
Source: TechCrunch
New providers
Brex, a payments and financial services provider to technology companies, is launching a new instant payout functionality for eCommerce merchants that sell on marketplaces. To begin with, US-based sellers on Amazon that are Brex customers can access their sales revenue immediately for a fee of 1.5%, instead of the typical 14-day payout period. Brex plans to expand the offering to other marketplaces in the near future. Brex is also introducing a rewards program where eCommerce companies can earn points on digital ads, travel, and restaurant purchases, among others.
Source: Business Wire
Worldline has completed the acquisition of Ingenico after recently receiving approval from the European Commission for the merger. The merger now makes Worldline the largest payments provider in Europe and the fourth largest globally, based on annual revenues. Ingenico, with a traditional stronghold in POS hardware and acceptance, complements Worldline’s strengths in the acquiring/processing space for e- and m-commerce.
Source: Ingenico
American Express and Coupa are expanding their partnership to now offer virtual cards in the US. The two companies have existing partnerships in the UK and Australia, where virtual cards have been successful in enabling merchants and other organizations to make B2B payments such as paying suppliers. After a merchant with an eligible American Express account links it to Coupa Pay, virtual cards can automatically be generated and sent to authorized suppliers for seamless payments.
Source: PR Newswire
In keeping with the growing theme of embedded payments, Audi plans to equip nearly all of its 2021 models in the US with in-vehicle toll payments. Audi plans to use an Integrated Toll Module (ITM), which would function using RFID technology to make payments from a single account across the 5 major tolling hardware and software protocols, 90 tolling agencies, and 20 tolling brands currently available in the US.
Source: NFC World
Oliver Wyman is a global leader in management consulting with offices in 60 cities across 29 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, 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.
