The Year in Review: Developments in Payments Across North America
1. What were your top three highlights in 2018?
There have been a lot of exciting changes in 2018, so it’s hard for me to pick just three.
I guess I’d start with the merger of Worldpay and Vantiv in January 2018 to create one of the largest credit card acquirers on the planet. I believe, this created a unique and unprecedented opportunity for my eCommerce focused team in North America. We combined two world-class teams together, focusing on the global payment and risk management needs of several hundred blue chip and medium sized businesses across the region. Combining companies of this magnitude offers unique rewards and challenges. I’m incredibly proud of our team and their unwavering focus on minimizing change, while bringing the breath of our combined services offering to the table for many of our complex, global merchant customers. Our team cross-trained quickly and focused on the unique requirements of our existing customers and prospects.
Secondly, the Worldpay technology teams had an interesting challenge. They were tasked with combining enterprise class technology stacks while deploying the Worldpay next generation acquiring platform. Our eCommerce team in North America worked closely with our technology counterparts to ensure that:
- We could continue to provider enterprise class service to our customers, with little or no technical change required on their part,
- That the innovative solutions both companies were building could be combined into a single access service offering; avoiding any unnecessary delays due to technology integration, and
- The effective assimilation of customer feedback on technology, products and market focus; ensuring that the voice of our customer base was ever present in the design and deployment of our new access Worldpay open API structure. Ensuring simple, scalable and secure access to all of Worldpay’s global payment and risk capabilities.
Finally, I’m incredibly humbled and proud of our unique customers partnerships. We have several long-standing client relationships spanning 10 years or more. We pride ourselves on conducting market research and bringing the latest in product innovations and market analysis to our customers. Our clients work closely with the assigned members of their Worldpay engagement team. They ensure that they are evaluating market opportunities, payment method considerations and risk offerings that will maximize their market driven payment acceptance rates, while minimizing their risk exposure. This can be a challenging task when a company launches in a market for the first time. We’ve taken many of our clients into uncharted territory (for them) with deployments in LATAM, APAC, Canada, Western and Eastern Europe, as well as working closely with one another to optimize their payment strategies in markets they already serve. In many cases this has led to localized market access to over 90% of available market spend via deployment of preferred payment method combinations that maximize order conversation while minimizing cost.
2. Worldpay merged with Vantiv in early 2018 to become one of the world’s largest acquirers. How do you think this benefits our customers in North America?
In my view, the combination of Worldpay’s industry leading global payment and risk solutions, coupled with Vantiv’s strong solution set in North America paved the way for a unique opportunity. We were in a great position to capitalize on our newfound global reach and expertise. Both companies were very strong in their respective areas; however, the merger of the two businesses effectively allowed the company to combined product roadmaps and technology stacks. This greatly reduced the time to market tied to deployment across virtually all parts of the globe - excluding restricted countries. The size of the new business offers unique advantages in terms of global reach (we have offices all over the world, in markets where our customers exist today), product innovation (we can invest more spend and reduce time to market through effective use of our army of product and engineering resources), as well as our ability to enter new markets quickly via existing relationship or via the option for new business acquisition.
Business size does not always equate to success; however, the scale of the new Worldpay represents, in my opinion, an unmatched ability to serve our clients in markets they need today with an eye on markets they may be considering for tomorrow.
"One of my favorite things about the new Worldpay is our ability to adapt quickly to the changing landscape of eCommerce. We have offices all over the world with local expertise to go with it."
3. Worldpay has launched some exciting new product innovations in 2018 including AuthPlus, AuthMax, IssuerInsights, etc. How can merchants take advantage of these?
Both Vantiv and Worldpay were hard at work at several key product innovations pre-merger. The merger itself afforded the business the opportunity to combine forces to deliver some of the most innovative new solutions to our merchant base in years.
A key example of this is our AuthMax solution announced last year. Worldpay has adopted a different approach to maximizing merchant order conversation through real-time analysis of transaction data coupled with analysis of transaction data from historical transaction trends. The end result is a real-time solution running behind the scenes that can add or remove data elements in the transaction flow to ensure the optimal payment success rate at the time of the transaction. This fully compliant methodology is only possible through accessing the $1.5 trillion in payments volume processed annually by Worldpay.
Several merchants have experienced uplift in credit card acceptance rates since they’ve been using this service. AuthPlus is a similar concept to AuthMax but is exclusive to our LATAM markets. In addition to the use of data analysis our AuthPlus solution leverages multiple acquirer connections in several key markets in LATAM to ensure the optimal authorization rate and transaction routing (by acquirer) as part of a focused effort to maintain a higher authorization rate.
IssuerInsights is another Worldpay product innovation leveraging the key data elements associated with our long and successful history with the credit card issuer community. IssuerInsights provides detail transaction data by issuer highlighting key authorization/decline trends (including full decline reason codes) as well as a myriad of other key/useful data elements allowing our merchants to both understand the authorization/risk behaviors of several key card issuers in North America, and ensure an optimized approach to the data elements sent at the transaction level. Issuer Insights coupled with AuthMax has proven to be a powerful and effective combination for many of our merchants’ partners as they focus their energy on optimizing performance in key markets they serve today.
4. Which North American merchants are doing interesting things?
In the three years I’ve held my GM position at Worldpay (and subsequently written this blog) I’ve held true to my promise not to reveal the strategy and activity of our customers when it comes to global payment and risk management. I will, however, provide some highlights that I believe underscore the value of the Worldpay/merchant partnership for some of our key clients. Here’s a view into some of the major customer activities we’ve experienced in North America:
- One of the largest Airlines in North America chose Worldpay for BSP and eCom deployment in key EU And LATAM markets. We are live and processing.
- Multiple, blue chip brands, spanning digital and retail verticals, have deployed with domestic processing in Japan, Turkey, Brazil, Singapore, Hong Kong and Europe. We’ve taken more North America customers into more markets in 2018 than in any year prior.
- Successful deployment of AuthMax for a large online gaming platform (non-gambling) with a multi-percentage point increase in credit card authorization performance.
- We’ve continued to push the boundaries in challenging vertical categories; with several new deployments in the US gambling market, the launch of processing for a handful of large scale crypto currency exchanges, and launch of card processing for state lottery systems. Plus we’ve seen a significant increase in our deal closure rate in the travel and airline spaces.
5. Visa & Mastercard continue to be strong in the US card market. With Asian providers expanding across the globe, do you think this will change?
That’s a very tough question to answer. Visa and Mastercard have enjoyed a strong market position in the US for multiple decades. The card scheme ecosystem goes well beyond traditional merchant acquiring including deep-rooted relationships with card issuers. Several upstart card schemes have tried to gain a foothold in the US; however, they have either failed to gain traction or been sold to one of their larger counterparts. With that said we are observing a revolution of sorts in the payment space with the rise of digital wallets. Wallets are providing consumers access to a myriad of payment methods via secure technologies. Dominant players such as PayPal, ApplePay, GooglePay, Alipay, etc. will continue to gain transaction.
China Union Pay (CUP) is massive in terms of the number of branded cards issued in and outside of China; however, it places heavy emphasis on Chinese nationals and ex-pats. The sheer number of cards issued with CUP as the scheme partner will continue to rise significantly; however, I think that there is a way for them to go before they catch up with Visa and MasterCard on the US.
6. Which markets outside the US offer the biggest opportunity in eCommerce?
I could write a dissertation on this topic! The short answer is … it depends on the merchant’s desire to open up physical, tax paying entities in key markets, the products/services they offer, the price point for the products/services in question, the perceived competition they would see in key markets and their overall interest in tackling the complexities of some markets that don’t follow the fairly straightforward processing patterns of North America and Western Europe. With all of that said, we continue to see a tremendous amount of growth in APAC, with emphasis on China, India, Singapore, Hong Kong and Australia.
We’ve had several key wins in these countries in 2018 and the demand for payment and risk solutions optimized for these markets continues to be very strong. We’ve had tremendous demand for our clients to continue our payments evolution in LATAM with new domestic acquiring deployments in Brazil and Argentina. There are more on the horizon as our merchant partners continue to want localized solutions instead of cross border options.
Western and Eastern Europe have been a surprising opportunity. The deadlines imposed by PSD2 around Secure Customer Authentication in 2019 have lit a fire under many companies who have been shifting their attention back to Europe.
Taking the time to ensure they are compliant has led to an increase in reviews of payment strategies across Europe. We’ve had several key wins tied to localized deployment (where a company may have processed cross border before), alternative payment methods, reduction of markets served that were underperforming or too onerous and a renewed focus on what it takes to be competitive in an increasingly competitive landscape… especially in the areas of digital and retail goods.
One of my favorite things about the new Worldpay is our ability to adapt quickly to the changing landscape of eCommerce. We have offices all over the world with local expertise to go with it. We typically catch wind of changes in the payments landscape before they are public knowledge and we make every effort to bring this news to our clients (positive or negative) in the spirit of partnership.
If you’d like to find out more about how Worldpay can help your business in 2019, get in touch today.