Merchant Payments Digest - 6th Edition

Transformational payments solutions:Amazon’s patent for one-click checkout expired in September. It was originally granted in 1999. The patent protected Amazon’s intellectual property on executing an online transaction with a single mouse click that accessed stored payment card and shipping information. As a result of the patent, other merchants either had to develop their own technology or license it from Amazon. With the patent now expired, some additional merchants may adopt one-click checkout – although many have already developed their own methods for minimizing friction at online checkout.  

Source: Yahoo
(https://ca.news.yahoo.com/amazon-patent-1-click-buying-163714583.html)

Regulatory landscape:The People’s Bank of China has introduced a new mandate for mobile payments to be centrally cleared through a new clearing house, starting June 2018. Non-bank players such as Alibaba and Tencent dominate the Chinese mobile payments market and the move brings them under the central bank’s supervision. While this is expected to reduce operating costs and infrastructure investments for players, it also requires them to share valuable customer data, which may lead to the entry of new players and more payment options for customers to use at merchants.

Source: Forbes
(https://www.forbes.com/sites/jinshanhong/2017/08/18/how-chinas-central-bank-is-clamping-down-on-the-mobile-payment-industry/#36bfea6150be)

Customers’ evolving expectations:EMV in the US launched two years ago, but consumers view EMV transactions as being slow and many merchants still do not conduct EMV transactions. In particular, there appears to be a disconnect between consumers, who believe the EMV transactions take too long, and merchants that offer EMV transactions, many of whom are not concerned that EMV transactions take so long. To combat the issue, the payment card networks (e.g., Visa, Mastercard) have launched initiatives to speed up EMV transactions.

Source: Digital Transactions
(http://www.digitaltransactions.net/emv-at-two-consumers-still-think-purchases-are-too-slow-many-merchants-indifferent/)

Data:Worldpay has invested in Featurespace, a machine learning based analytics firm that plays in the fast growing ~$14 BN fraud detection and prevention market. In addition to the investment, Worldpay also entered into a commercial partnership with Featurespace to license the technology to Worldpay’s merchant customers to manage risk and prevent fraud, among other use cases.

Source: Worldpay
(http://www.worldpay.com/us/about/media-center/2017-10/worldpay-invests-in-leading-machinelearning-fraud-prevention-company)

New providers:

Square has submitted an application to be an industrial loan company. Square Financial Services, as it will be called, will offer loans and deposit products to small businesses. Square already offers loans to small businesses today via Square Capital with its partner Celtic Bank, but will be able to do so going forward without needing a supporting bank partner.

Source: Business Insider
(http://markets.businessinsider.com/news/stocks/squares-banking-push-could-help-it-achieve-goals-2017-9-1002354626)