Merchant Payments Digest - 25th 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:Apple is partnering with merchants to enable customers to enroll in loyalty programs and mobile applications seamlessly using Apple Pay. By leveraging NFC tags, merchants can enable customers to bypass the traditional app-enrollment process which can be a source of friction. Panera Bread is piloting instant-enrollment using this capability, while Dave & Buster’s and Caribou Coffee are looking to leverage this feature to allow customers to sign up for their loyalty programs easily, later in the year.

Source: NFC World


Regulatory landscape:

Visa and Mastercard announced that they will reduce interchange fees on cross-border transactions made in the EU using both debit and credit cards by ~40% on average. With this change, cards issued outside the EU will carry interchange in line with those cards issued within the EU: 0.2% on debit card payments and 0.3% on credit card payments for in-store purchases, starting in October 2019. These changes were introduced by the networks as part of a deal with the European Commission, aimed at lowering payments costs for EU merchants and lowering prices for tourists visiting the EU.

Source: BBC


Customers’ evolving expectations:

Ant Financial's mobile payment platform Alipay has launched Dragonfly 2, its latest facial recognition tool and said it plans to spend $448 million promoting the new system with merchants across China. Mobile payments have replaced a significant share of cash in China, and Chinese customers increasingly expect higher levels of security in their mobile payments. Merchants will not need to make any changes to their stores or hardware to leverage Dragonfly 2.

Source: Yi Cai Global


Data:JCPenney announced that it would no longer accept Apple Pay in it stores. JCPenney had first piloted Apple Pay in 2015, before expanding to all its US stores the following year, and later to its mobile app. JCPenney said that the move was necessitated by the April 13, 2019 deadline in the US for supporting EMV contactless chip functionality. This change also allows JCPenney to take back ownership of their customer purchase data. Customer purchase data allows merchants to better target customers with relevant promotions, as stores can collect the customer’s name and card number in a PCI-compliant manner at the point-of-sale and combine it with other demographic data. Apple Pay currently prevents this level of data access to merchants.

Source: TechCrunch


New providers:

T-Mobile expanded into mobile banking and payments with the addition of GoPoint by T-Mobile for Business, a new mobile Point of Sale (mPOS) solution offering businesses free same-day funding. T-Mobile has partnered with TSYS, a global payments provider, to power the GoPoint mPOS software, secure transaction management and same-day funding. The company also launched T-Mobile for Business Marketplace, a suite of business mobile device management and productivity software.

Source: T-Mobile


  • PayPal agreed to invest $500 MM in Uber to further drive synergies between Uber’s marketplace offerings and PayPal’s payments services. PayPal currently processes payments for Uber in US and Australia and the deal is expected to expand the relationship to other markets. PayPal also indicated that the partnership could extend to other complementary areas in the future – including developing a digital wallet for Uber. PayPal’s investment in Uber follows a $750 MM investment in MercadoLibre, a large eCommerce marketplace in Latin America, in March this year.

    Source: Finextra and CNBC


  • Western Union announced a collaboration between Western Union Business Solutions, its cross-border payments and foreign exchange risk management division, and October, a European Fintech lending platform for small and medium businesses. Clients of Western Union Business Solutions now have direct access to October's credit offerings, including nearly 16,000 lenders. Through the partnership, businesses will have access to loans ranging from €30,000 to €5,000,000 financed by private and institutional lenders.

    Source: Western Union 


  • Dunkin’ Donuts announced a pilot of multi-tender participation in its DD Perks Rewards Program at more than 1,000 locations across the US, giving guests the opportunity to earn DD Perks points regardless of how they pay. Previously, DD Perks members earned points only for those payments enrolled via a Dunkin’ gift card. Now, at pilot locations, members can earn points whether they pay by cash, credit, debit or a Dunkin’ gift card. Customers at participating locations can accumulate points with every purchase by scanning their DD Perks loyalty QR code in the Dunkin’ mobile app or a physical loyalty card.
  • Source: Dunkin' Donuts


  • Facebook is ending its person-to-person (P2P) payments service in the UK and France. Customer friction resulting from the number of steps involved to send and receive payments is expected to have led to low adoption rates for the product. The UK was Facebook’s first market outside of the US for payments. Facebook had onboarded a number of the large UK banks and card companies for this service.
  • Source: TechCrunch


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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.