Omnichannel or Omnichallenge? Mobile Wallets, A2A, and the Big Thing in the 2025 of Payments

Speaker A: Foreign.

Speaker B: Voices in Payments. Expert insights for a digital payments world. Uh, welcome, uh, Silvia, to Voices in Payments. This is our fourth recording of this season. Uh, happy to have you here. Um, can you briefly introduce, uh, your role in, uh, worldpay, the company that you work for?

Speaker A: Uh, yeah. So, uh, I'm Sylvia Minsdorf puy. I run the business development team at worldpay. I've recently joined worldpay, uh, on the first of, uh, April. Before that I was at companies like FIS and ACI. And it's funny because, um, in that time, in 25 years in payments, Worldpay has been my customer, they've been my supplier, they've been my partner, they've been my competitor, uh, but they've been my sister company. And so I feel like over these 25 years it's led to this moment.

Speaker B: Yeah, that feels like a natural, uh, evolution.

Speaker A: At some point I had to join them. Uh, I'm also part of the bv, uh board here in the Netherlands where we um, have our license, uh, for uh, the eea. Uh, so, yeah, it was really fantastic. And obviously Wolfe is, is the biggest acquirer in Europe, one of the biggest acquirers globally. Uh, we process 1 in 10 payment transactions. Can you imagine? Globally $2.3 trillion. Um, we have domestic licenses in 68 markets. We provide services in 193 countries globally in 153 currencies and you know, merchant processing. And being a PSP is in our, in our DNA. It's a fantastic company to be part of.

Speaker B: Yeah, it is a huge scale. And I remember Worldpay from 25 years ago, like you mentioned, when uh, E Commerce was just coming up and Worldpay started focusing, um, on SMEs in the UK and later on they became the global platform that nowadays is including enterprise clients. Uh, very nice to have you here. Obviously 2024 has been a big year for Worldpay, uh, on their own feet again, um, uh, with the establishment of your own independent company, uh, does. Did it change a lot for the way how you operate the company and uh, did it bring a lot of, uh, evolution in the company?

Speaker A: Yeah, obviously I joined just as fiscal was, uh, uh, being split, uh, away. Yeah, um, I, I think it's really emphasized again that while we are a global large company, we bring the power, the, the power of that global company on the one side, but the energy of a startup to the business that we do. And I think that's been reinvigorated. I see us taking decisions really quickly, you know, like I Always say maybe is the death of business. Just give us a yes or no. And so we, we make decisions quickly. We're very focused on our market and we're very focused on bringing innovation to, to those markets and um, and drive, drive growth. So it's a fantastic time to be part of worldpay and a fantastic time to work with customers and prospects of worldpay.

Speaker B: Perfect. That sounds um, like the right approach to the market. You need to act as a startup to be competitive. Also when you have the skill uh, to be a corporate, uh, then you still need to have that attitude. I think customers do value that. Uh, how do you see the development of Omnichannel strategies with your customers, mainly in the enterprise segments, for example?

Speaker A: Yeah, of course. So Omnichannel obviously is super important. Now that mobile commerce has taken up so much. It is critical for uh, merchants to be able to provide that seamless transition between different channels. Right. And one of the key things that you see particular in retail is customers will be standing near your store and they'll be looking up items online at the same time, potentially at your competitors. And so you really need to bring that together. But bringing that together comes with a lot of challenges, both uh, from a technology perspective, from a process, but also from a regulatory perspective. And that's why we as worldpay are focusing on that, to bring that seamless experience to our merchants.

Speaker B: Yeah. And in E Commerce of course some of your enterprise clients already uh, leverage um, uh, WorldPay, um, globally or on a European level, uh, and how you bring the point of sale environments to them as well.

Speaker A: Yeah, of course we have a uh, large, long pedigree in point of sale, in particular the UK and the US and therefore it's a natural progression for us to bring that into other markets.

Speaker B: Yeah. With uh, unified reporting and things like that. Everything that you need as an Omnichannel retailer. Perfect.

Speaker A: And you need a lot. Omnichannel channel is a uh, challenge. Omi. Challenge.

Speaker B: Yeah, that's true. Are you aware of any differences between countries in Europe or some more advanced when it comes to Omnichannel than.

Speaker A: Well, I think or.

Speaker B: Sure.

Speaker A: The countries that are taking the lead in Omnichannel are France and Germany where there's a lot of focus. And then from a vertical perspective, obviously retail and then travel are kind of key verticals where Omnichannel is really, uh, really taking off. But I think it's a big discussion in almost any country and any vertical.

Speaker B: Yeah, that's ah, a key topic to address. Of course, um, many companies ex, specifically when they're not from Europe, think that Europe is a, ah, single market. And we, to some extent we are, but we also have a lot of regulatory differences and cultural payments preferences. Yeah. How do you deal with that? Is that something that you cater for?

Speaker A: Absolutely. So you need to always look at all the different, uh, solutions that you require to be in Europe. All my career I've operated in Europe and emea and I think that's one of the fascinating things about Europe, the regulatory differences, which of course since the Payment Service Directive one, which is now two and coming three, we tried to unify that, but there were still a lot of regulatory differences in patchwork that you need to navigate. And then there are cultural differences. Right. I mean, uh, you and I here in the Netherlands, I mean I don't pay with cash anywhere. Actually when you pull out cash, people look at you and kind of going, well, you're going to pay with cash. What's going on here? Um, or you cross the border into

Speaker B: Germany and cash is the other way around.

Speaker A: Even though through Covid, cash reduced, actually. Funny, right? Uh, payment actually car transactions in Germany increased through Covid. Everywhere else they dropped through the bottom, but in Germany they actually went up. Yeah. Because people started paying with their card rather than cash because cash obviously was dirty and there was more secure in that. Well, there was more charts of infection with COVID Uh, so, uh, it's really interesting to see those, those differences in payments preferences and that are, uh, both come from a technology perspective but also from a cultural perspective. And I think that's when you're a merchant now wants to operate in multiple countries. That's where with worldpay can really make a difference because we know those differences in all those times.

Speaker B: Yeah. Last week I read a research about, uh, making cash available in the Netherlands on a certain level and that would cost us 800 million to 1 billion euros. It is just the wrong direction, I would say.

Speaker A: Yeah, it's an interesting discussion, obviously. I think if you think about the geopolitical shifts that we've been through over the last couple of years, and I think four years ago we wouldn't have believed we're where we are now. It's quite sad really. I think about 10, maybe longer ago there was a lot of research done in the Netherlands, particularly into the cost of cash to society. I think the Payments association did that report and they found that cash is much more expensive than digital payments, first of all, because you have to cart it around. That's very Expensive and then the handling is just less efficient and then the cost of fraud, the cost of potentially violent fraud or violent uh, attack is much higher. So the, everybody in the ecosystem came together um, and really focused on taking cash out, particularly also in environments that are governmental like parking and public transport. Uh, and exactly that report is now saying well government wants us to reintroduce cash and they probably don't want it in public transport and we for sure don't want it in parking. I understand why we need it to kind of protect us but we need to think about what's the most efficient way or not keeping it alive.

Speaker B: Yeah, fully agree with that. And um, of course in the Netherlands um, you tend to think that we are always a bit ahead which is not always the case. But in terms of mobile payments I think we might be uh, with contactless payments with mobile phones or smartphones, um, do you see that this has driven uh, the uptake of omnichannel commerce as well in Europe?

Speaker A: Yeah, absolutely. So what we see is that mobile wallets are really taking over. Let me just check. So we can see that 50% of E commerce transactions are now done with mobile wallets. And obviously mobile wallets makes E commerce so much more seamless than uh, having to type in your data. Uh it's actually I think an interesting development when it comes to account to account payments because in the past especially here in the Netherlands, Ideal was always so easy because it was almost uh, not one click but three clicks. And if you wanted to pay with your card, you couldn't pay with your debit card you had to, minus your credit card you had to pay key and everything. And that was really tiresome. Now with your mobile wallet it makes it much easier. And so what we're seeing actually is that for the first time in a long time ideal payments are stackmating compared to other e commerce methods. So that's going to be an interesting one where we look at uh, account to account developments were in the Netherlands we, you know I'm going to say we were first. We were first. Yeah, yeah. And now you can, it's going to be an interesting development there.

Speaker B: Yeah, I fully agree. This might be the plateau for Ideal uh payments when it comes to market share while debit cards are on the rise and the ability to pay with

Speaker A: debit cards in E commerce, which obviously wasn't easy before, now it's coming on.

Speaker B: Yeah, perfect.

Speaker A: We have think that when it comes to mobile wallets today they're accounting for about 27% um, globally at uh, the Global Payments Report, we're predicting that by 2027 they're going to combine 49% of point of sale and E commerce transactions globally. So it's a massive rise of wallets. So if you're not in that game, that's the game to get it.

Speaker B: Yeah, that's true. So after 20 years of discussions about mobile payments, they are getting there and uh, becoming dominant ultimately.

Speaker A: Absolutely. It's just the ease, right? I mean like ah, I will walk out of my house, leave everything inside. Just as long as I've got my mobile phone with me, I've got everything I need.

Speaker B: Yeah, absolutely perfect. Alternative payments, you mentioned them uh, are of course also very important and in some countries there are not even alternative but the standard, uh, like in Germany with PayPal or um, in the Netherlands with Ideal. Um, but there are a lot of um, expectations from account to account payments. Do you think that they will grow on a European level?

Speaker A: Absolutely. As well we see account to account payments growing globally. Obviously markets like the Netherlands was always very much ahead with Ideal. The interesting thing about Germany, we talked about how cash has always been prevalent in Germany. There's an interesting thing about Germany which um, uh, Germans were very big in catalog buying. So catalog buying was a very common thing. If you think about retail and digitalization of retail, cataline buying was the ultimate thing. When the Internet came out, they brought a shop at your home, make the catalog digital. Uh then therefore you need a digital payment method. That's One reason why PayPal is so big, because there was no account to account pay me method, you know, fostered by the banks. Like we had Ideal here. The other reason, the other thing is you have lots of bcom fintechs in Germany and that was really driven by that catalog buying because you know for a country that is so cash driven, why uh, it's the catalog buying that draws.

Speaker B: Yeah the bit.

Speaker A: Also the cultural connotation is such an important thing. But back to the global developments. You know in Brazil, uh, counter campaigns is now accounting for 50% of all E Com transactions. So and that's kind of a complete shift over the last couple of years.

Speaker B: Yes, and it's peaks and peaks instantly.

Speaker A: And that's massive. Obviously in India with ubi it's completely transformed the country. Uh, it's given millions and millions and millions of people access to financial systems where they previously didn't have them. So it's not just a pure enhancement of um, paying behaviors but it actually makes a big difference in financial inclusion when it Comes to counter campaigns.

Speaker B: Yeah, absolutely. Yeah. India is a lovely example I think with all the technology that they brought to their home people.

Speaker A: And it also shows what a difference the dedication of a government in combination

Speaker B: with the regulator can uh, make.

Speaker A: And this is why from a world pay perspective we always think it's so important to collaborate with different countries, with the ecosystems and be part of those transformations and understand if we play an important part how we can support that. Yeah.

Speaker B: And what's your expectation of the European Payments Initiative now better known as Veronica?

Speaker A: Um, well it's a really interesting initiative. Um, obviously from a political perspective the importance of having independence as ah, Europe is really important. The idea to have a consolidated payments method is really important. But at the moment what's happening is you have kind of the southern collaboration between Italy and Spain and and then you have kind of the northern collaboration between France, Germany and not so much France but Germany, the Netherlands and Belgium and then obviously in the Nordics as well. Yeah. So it's like a strike flag this way. But if you think of consumers and their cross border payments they're more like this ah, travel perspective. So I think this is going to be an interesting one. I think it's really about how you know, how receptive are consumers going to be with every payment method. It's a chicken and egg. Are consumers really wanting to pick it up? It's not filling a hole because we have alternatives now. Ideal fill the hole. There was nothing obviously we rol because of um, that position is going to replace Ideal but it's now going to have to compete directly with the ease of using your mobile wallets already. So it's really going to be in those value added services where we are going to make a difference and in truly unifying uh, over time hopefully Europe. So it's going to be interesting to see how that collaboration works out.

Speaker B: Yeah. And I think Mass guardian visa took 15 years to build this network so it will take some time probably.

Speaker A: Yeah. And they're obviously you know like if you then talk about, about instant payments purely without vero and there's always been a big talk about oh uh, let's put instant payments upon the seller. Let's use instant payments because it's cheaper than cards. But let's not forget that one of the reasons that there is cost to car is that there are very clear rules about what happens when things go wrong. Uh like anybody can build a payment system on the happy flow. The happy flow is not the trick, it's the unhappy flow and being able to deal with the unhappy flow efficiently. That's the trick. That's also where you either make the money or you lose. Because if you do it wrongly or you get hit by bad liability it creates a huge issue. And we can see the problems um, with app fraud for example in the UK where you know, coming up with the right rules and how to deal with those things are critical.

Speaker B: Yeah, fully agree with that. So customer consumer protection and education needs to be in place and yeah, consumer

Speaker A: protection and education needs to be in place but it can't be in place in such a way that you know, you support first party fraud and there is no recourse when it comes to liability. And then you know, when you start talking about that then obviously also the power of social platforms comes in. If you think about mobile payments and mobile commerce, social platforms play a big, big role and um, you know they're going to be asked ah, also by the regulators start taking the responsibility when it comes to uh, transactions being caused by merchants that are being promoted by those social platforms. So that's going to be an interesting discussion over the next couple of years.

Speaker B: Yeah, absolutely. Uh, back to the core of worldpay. The name says it all I think. So you're helping merchants to sell globally, uh, if they want. Um, what does this mean in terms of currencies, local, uh, payment methods, uh, what kind of reach do you support for their business?

Speaker A: So as I said at the beginning, we provide domestic acquiring in 68 countries, we provide acquiring in 193 countries and we support 153 currencies globally. So you know you can't think of anybody with bigger reach. Uh we also provide not just pay, uh, pay ins but also big network of payouts. So we can not just support merchants uh, with their consumers but we can also support them at the back end with B2B payments. And that's another really interesting uh, part of the business.

Speaker B: Of the business. Can you imagine? Well the fun thing about payments is that it's uh, never done when it comes to technology or innovations or emerging technologies. There's always something um, and we do expect frictionless customers, uh customer experiences as a consumer nowadays in, in Europe.

Speaker A: Well I always say friction, right, not frictionless.

Speaker B: Okay.

Speaker A: Ah, I always think frictionless is the wrong approach notion. If you know, if you're buying an ice cream it'd uh, be frictionless. And by the way if that goes wrong then you're not going to die. You know it's a €2 but if you're buying something that is of bigger value. You need to have the right friction and then also the friction needs to come in when it's a repeat payment unless it's a subscription. So you have to balance that out. And I think it's a really interesting discussion as we go into PSD 3 and the regulator rethinks approaches to SCA because what we see, and I think everybody's seeing that, that some of the unclarities around where sea is absolutely required, uh, are leading to auth rates reducing. And so that's going to be a really interesting one to tackle.

Speaker B: Yeah, yeah, yeah. I think they will focus more on consent and merchant initiated transactions and stuff like that in PST3. Okay, great. And how does Worldpay stay ahead of all those innovations? Do you, do you have a development arm, uh, that's continuously looking at new technologies or is it.

Speaker A: Of course, yeah. So there are two things obviously constantly adapting our technology to provide the latest in both payment methods and solutions, um, and really providing that seamless experience to our merchants so that they can expand and drive that, um, and having that understanding of regulation also in markets. Because with that we can help merchants a lot as they think about expanding to a new market. We have that expertise. We can help how to set up

Speaker B: your business, how to set up your

Speaker A: business, how to get that right. Loyalty, um, key payments methods, what is culturally expected. So we bring that to the forefront. But then obviously you're constantly innovating. Uh, we've recently innovated uh, where we're combining uh, our power of data with the bank to provide uh, a better authorization experience. I think that's going to be key going forward. We've recently partnered with Mangopay for marketplaces and we've just launched um, a virtual uh, card with MasterCard to drive uh, more innovation uh, in travel. And so the innovation goes on. Right. I wouldn't say there was a month without it.

Speaker B: No, indeed. So you keep expanding your services in that sense. And what do you think um, will be the big thing for 2025? Do you have something cliffhanger that we can look into by the end of next year?

Speaker A: By the end of next year. So I think obviously account to account is going to be a big discussion. How is RERO going to keep developing specifically in Europe? And then I think AI is going to be massive. Uh, it's. And I think it'll accelerate to such a point that both I think from a technology perspective in helping consumers, merchants, payments institutions and banks to help better make decisions, but also from A fraud perspective, it's going to have a huge impact and so that won't go away. And I just think that's going to massively accelerate. Yeah.

Speaker B: So AI will help with the sophistication of the payments ecosystem.

Speaker A: Yeah, well, help with the sophistication and will also create challenges. Imagine. And then AI, you've outsourced making a payment decision to an AI. The AI gets it wrong. Who's liable? Nobody's thought about that yet. That's true. Who's liable? Does the AI liable is the maker of the AI liable is you liable is the merch? Yeah. Who knows? So these are things that we need to think about. But then also on the fraud side, obviously we use and SA ecosystem AI a lot to help us prevent fraud, but the fraudsters are using it just as much. Uh, and it's their own minstre, right?

Speaker B: Yeah, absolutely. Yeah, absolutely. They're just technology companies, more or less. And then on, on a professional level

Speaker A: nowadays, AI will continue. Uh, my prediction is there will be even more mobile wallet shift and account account pens will.

Speaker B: Will grow.

Speaker A: Will grow.

Speaker B: Yeah. Great, thank you very much. Sylvia has a closing, um, question. Um, you're looking into the next big thing for next year. Is there something that your enterprise clients are pushing on your roadmap? Something that needs to be there in their opinion as the next few years.

Speaker A: So I think one of our big discussions for next year is going to be about uh, business to business payments and the payouts as I discussed it. And then obviously working capital is something that we're always interested in and working with our uh, bank partners to uh, do uh, further things in. And then we have a platform business in which we provide embedded finance and uh, that's coming uh, to Europe fast. So super. Going to be really exciting year 2025.

Speaker B: Thank you very much for this cliffhanger and thank you very much for the interview. Um, yeah, happy to have had you here.

Speaker A: Thank you very much for having me

Speaker B: work Payment Genes presents Voices in Payments. Expert insights for a digital payments world.