Merchant Payments Digest - 30th 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: PayPal became the first foreign payments provider to be approved to provide payment services in China after acquiring a 70% controlling stake in local payments firm GoPay. PayPal now has access to GoPay’s existing licenses to support online and mobile payments in the country, including cross-border transactions. Other global payments players have struggled to obtain approval from The People’s Bank of China to enter the market. The transaction is expected to close in Q4 2019.

Source: Tech Crunch


Rules and regulations:

As Bank Identification Numbers (BINs) are set to expand from six-digits to eight-digits in 2022, EMVCo. is drafting specifications to support this change. EMVCo. anticipates that merchants and processors may need to update point-of-sale (POS) terminals and online platforms to ensure that they are capable of processing card transactions with both six- and eight-digit BINs. Additionally, the impact of this change may also extend to other non-payment systems such as loyalty and rewards platforms for merchants that utilize PAN information for these services.

Source: EMVCo.


Customers’ evolving expectations:

Sainsbury’s, a UK supermarket chain, is abandoning the idea of a completely cash- and card-free store that it piloted in London earlier this year. The pilot experimented with the scan-and-go experience, with payment being automatically deducted from the app while customers exited the store. However, Sainsbury’s observed that customers frequently lined up at the help desk to pay with a conventional form of payment. It has since added a manned counter and two self-checkout kiosks to augment the scan-and-go experience.

Source: Finextra


Data:Daimler is piloting a project where it is setting up a digital identity for its trucks and the capability to make payments autonomously - without any intervention by the driver. To enable this, Daimler creates a digital Truck-ID and a Truck Wallet. The Truck-ID has embedded data to provide a unique signature and authenticate payments transactions via the Truck Wallet which can hold cash (stored value) or card in digital form. Daimler recently demonstrated this technology by completing a payment at an electric charging station.

Source: Daimler


New providers:

Stripe, the digital-focused merchant processor, has launched Stripe Capital to offer financing to merchant clients. With this offering, Stripe will make funds available to its eligible merchants within a day, based on data such as volume processed, % of repeat customers, payment frequency, and changes in revenue growth. Merchants repay the loan as a fixed percentage of daily sales, with no recurring interest charges or late fees.

Source: Stripe


  • PepsiCo has partnered with PayPal to offer its first-ever cash back loyalty program called PepCoin. As part of this program, customers are eligible to earn rewards on specific snack and beverage combinations by scanning the codes on the pair of products using their phones. Once $2 are accumulated, the amount is automatically transferred to the customers’ Venmo or PayPal account. The partnership offers PepsiCo the opportunity to compliment its physical brands with digital experiences for consumers using PayPal or Venmo.

    Source: PepsiCo


Three new Amazon payments initiatives have been unveiled recently:

  • U.S. customers can now pay for online purchases using cash at one of 15,000 Western Union outlets. The offering called Amazon PayCode had been available internationally in 19 markets and has now been introduced in the U.S. It complements Amazon Cash, where customers can add cash to their Amazon account at over 100,000 physical locations such as CVS and 7-Eleven. At checkout, customers receive a QR code which they can use to make a payment at a Western Union location within 24 hours. According to Amazon, 80% of Americans live within five miles of a participating Western Union.
  • Amazon is testing handprint payment technology at its Whole Foods stores instead of customers paying with a card or an app. The technology does not rely on physical fingerprints to work and also does not scan a customer’s fingerprints. Rather, it identifies the shape and size of the hand being scanned and charges a debit or credit card linked through Amazon Prime. A transaction processed using this system is completed in 300 milliseconds.
  • Amazon is also exploring opportunities to use its cashierless Go technology at other merchant outlets. It is engaged in talks with CIBO Express stores at airports and Regal theaters to deploy this. Amazon views this as a means to expand its retail transaction volume without developing its own stores, while also engaging with merchants that may otherwise view it is a competitor. Business models being explored for such a third-party Go strategy include taking a percentage of sales or charging merchants an upfront amount along with a monthly fee.

Source: Tech Crunch, Fox Business, and CNBC

Oliver Wyman is a global leader in management consulting with offices in 60 cities across 29 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.

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