Merchant Payments Digest - 18th Edition

The Merchant Payments Digest is a regular update from Oliver Wyman to keep merchants apprised of developments in the rapidly shifting payments space.


Transformational payments solutions:Square is entering the consumer lending space by offering installment loans to customers of its merchant clients. The loans will be offered through Square Capital and will range from $250 to $10,000 with a repayment term of 3, 6 or 12 months. Benefits for merchants include upfront payment and higher sales conversion at the point-of-sale (POS), whereas for customers the benefits include convenient financing options with real-time decisioning. Square’s entry into the POS financing space is the first by a merchant acquirer, placing it in direct competition with other installment loan specialists such as Affirm and Klarna.

Source: Reuters


Regulatory landscape:

According to Verizon’s 2018 Payment Security Report, full compliance with the PCI DSS security standards globally dropped for the first time in six years from 55.4% in 2016 to 52.5% in 2017. The full compliance rates for Americas is lower than that across Asia-Pacific and Europe – partly due to a later adoption of EMV. Only about ~20% of merchants and other organizations measure their DSS controls across their entire environment more frequently than the DSS requires. With the accelerated pace of data protection laws globally, Verizon expects payments security and compliance to become a growing area of focus for players in the payments ecosystem, including merchants.

Source: Verizon


Customers’ evolving expectations:

For millennials, Venmo is outpacing ATM cash withdrawals as a preferred payment method, according to Rubiix, a social spending platform. Based on an analysis covering 10 million recent debit and credit card transactions performed by millennials in the U.S., Venmo not only beats ATMs in terms of total transaction volume, but also matches ATM withdrawals in terms of average transaction size. This highlights Venmo’s strategy to get PayPal assets to merchants – both physical and digital, and the growing importance for merchants to evaluate the acceptance of alternate forms of payments to drive commerce.

Source: VentureBeat


Data:Despite opposition and lobbying from payment providers, India’s central bank – the Reserve Bank of India is moving ahead with the implementation of its requirement for payment providers to store data locally within the country. Payments providers see challenges with the move in terms of impact to their global fraud management platforms and higher infrastructure costs that may in turn be passed on to merchants. Whatsapp - Facebook’s messenger app that is looking to penetrate India’s digital payments market is one of the first providers to announce that it has created a system to store payment data locally in India.

Source: Reuters


New providers:

Stripe has launched Terminal, an mPOS system for in-store payments, to help their digital merchants unify the acceptance of online and offline payments. Stripe’s Terminal consists of three parts – (i) pre-certified card readers ready for EMV and contactless payments out-of-the-box, (ii) SDKs and APIs for customizing checkout experiences, and (iii) software for managing connected devices. The product is targeted at online merchants that are expanding into physical stores and aims to provide a unified payments stack with a single view of customer data and sales across channels.

Source: Finextra and TechCrunch


  • Hennes & Mauritz (H&M) is investing $20 million in Klarna, the Swedish payments FinTech focused on POS financing, to improve shopping experience and increase customer loyalty
    • The partnership will build an omni-channel payments experience for H&M customers across in-store, online, and mobile

    • Klarna’s digital platform will also simplify returns and delivery processes to reduce customer friction and will provide more flexible payment options such as “try before you buy” (pay later) services

    • The partnership will kick-off in Sweden next year and will be rolled out to 13 European countries, with plans to subsequently expand to the U.S. and Asia

    Source: Reuters and TechCrunch  


  • ExxonMobil has partnered with Gilbarco to convert or upgrade its wholesalers’ fuel dispensing equipment to be EMV compliant

    • The move is designed to address the Automated Fuel Dispenser (AFD) liability shift in October 2020, by which time gas stations that are not EMV compliant will be liable for any fraud at the pump

    • The Gilbarco program offers technology that enables fuel dispensers to not only accept EMV cards, but also contactless payments

                Source: Gilbarco 


  • eBay has started managing payments on its marketplace platform in the U.S. on a small scale in order to increase efficiency for both buyers and sellers
    • Shoppers will be able to check out and pay for the transactions without leaving eBay

    • Sellers will receive payouts into their bank accounts, instead of into their PayPal accounts, and receive consolidated billing with all fees in a single invoice; eBay also noted that sellers can expect lower overall transaction costs

    • eBay will also provide buyers with more diverse payment options at checkout including localized payment options and other new forms of payments; Apple Pay has been added as one of the first mobile payment methods

Source: eBay


Oliver Wyman is a global leader in management consulting with offices in 50+ cities across nearly 30 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 or Rob Mau at

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.