This inherent complexity, arising because today’s payments sit at the intersection of technology, finance, regulation, and end-user behavior, can impede businesses’ ability to maximize revenue.

“The payments industry has moved faster, technology has changed, consumer needs and experiences, and innovation have all changed significantly, not just along the last 20 years, but in the last three to five years,” Laura Miller, chief revenue officer and global head of eCommerce at Nuvei, told PYMNTS.

Miller said the complexity of payments, payment analytics and risk management represent the three “most significant” pain points that businesses must overcome to unlock revenue potential through payments optimization.

But navigating the labyrinth of options, regulations and risks composing today’s payments landscape is far from easy, even for the most sophisticated and forward-thinking firms.

Managing the Complexity of Payments

One of the most significant hurdles in payment optimization is the sheer complexity of the payments industry. Over the past few years, particularly accelerated by the COVID-19 pandemic, consumer expectations have evolved. Customers now demand the ability to pay anywhere, anytime, in a safe and secure manner. However, with this convenience comes a host of challenges.

“The payment experience can be daunting for consumers,” Miller said. “From error messages to internet stability, and the vast array of payment options, each of these factors can either enhance or hinder the customer experience.” The proliferation of global payment methods adds another layer of complexity, making it imperative for businesses to approach the payment process holistically.

Nuvei recognizes these challenges, Miller said, noting the company has developed pretransaction tools such as smart routing and adaptive approvals to streamline payment transactions. These tools not only reduce complexity but also improve transaction success rates, with some clients seeing a 5% increase in successful transactions.

At the same time, the vast array of payment options available today presents a double-edged sword for businesses. While offering multiple payment methods can attract a broader customer base, it can also lead to confusion and inefficiencies. Striking the right balance between choice and operational efficiency is crucial.

“There’s always a trade-off,” Miller said. “The more choice, the more confusing it can be for consumers.”

She added that by embracing a localized approach and identifying the optimal alternative payment methods for their specific markets, businesses can present the right payment options to the right consumers, enhancing the overall customer experience.

Power of Payment Analytics

In the digital age, data is abundant, but leveraging this data effectively remains a critical issue for many businesses. According to Miller, nearly a third of businesses report that limited data visibility is a missed opportunity to boost revenue. The key lies in using this data to improve payment processes and, ultimately, customer satisfaction.

Risk management remains a cornerstone of payment processing. As the industry evolves, so do the risks, particularly in the form of fraud. “Businesses face substantial financial losses due to fraud, which can amount to billions of dollars annually,” Miller warned, noting that fraud not only impacts the bottom line but also erodes customer trust and loyalty.

Looking ahead, Miller highlighted three key trends that are set to revolutionize payment optimization: artificial intelligence (AI) and machine learning, biometrics and contextual payments.

AI and machine learning are already playing a role in enhancing fraud detection and personalizing payment experiences. By automating processes, these technologies enable businesses to realize revenue faster and with greater accuracy. Meanwhile, biometrics, particularly in authentication, promises to simplify and speed up payment processes while enhancing security.

Perhaps the most exciting development is the rise of contextual payments, which Miller described as a way to enable and automate payments during personal moments.

“Contextual payments create an emotional connection for consumers, making them feel confident in their purchases,” Miller said, citing as an example an end user watching their favorite show and instantly purchasing items featured on screen, or seamlessly paying for services through a mobile device while on the go. This trend has the potential to transform the way consumers interact with businesses, she added, making payments a more integrated and intuitive part of everyday life.

The post Gain Without the Pain: Nuvei Head of eComm on What’s Driving Payments Optimization appeared first on PYMNTS.com.

To that end, the payments company announced Wednesday (Aug. 7) that it is introducing adaptive pricing for businesses in Asia Pacific and Latin America, letting businesses automatically show pricing in local currencies for buyers in more than 150 countries.

“Online shoppers are purchasing more goods internationally, but it’s difficult for them to pay how they want and are often in the dark about how much they’ll be charged,” the company said in a news release provided to PYMNTS.

“And it’s complicated for merchants to show their customers how much they’d be paying in their local currency and with their preferred payment method. For example, to enable some local payment methods for their buyers, merchants must show prices in those buyers’ local currencies.”

Stripe said it has tested the effectiveness of adaptive pricing in the U.S., U.K., Canada and the European Union, and found that it led to an average 17.8% increase in cross-border revenue for businesses. And 90% of customers checked out in their local currency when given the choice.

Offering people more choices when it comes time to pay can help cultivate relationships with consumers, research by PYMNTS Intelligence has found. 

According to last year’s “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” 16% of consumers cited the ability to use their preferred payment methods as a factor influencing their decision on where to make their most recent purchase.

“Whatever calculus the user performs to determine the payment methods that they want to use, they want more options across more merchants,” Drew Olson, senior director at Google Pay, told PYMNTS CEO Karen Webster in December.

And that calculus isn’t just happening online. In another 2023 interview, George Hanson, then chief digital officer at Panera Bread, said the fast-casual eatery’s addition of biometric payments was critical to meeting diners’ demand for frictionless transactions.

“We’re leveraging what the guests have told us and what they continue to show us, which is that they’ve increased their digital adoption,” Hanson said. “They expect their phone to be a part of every interaction at every access point. We’re looking at all the areas that traditionally have been offline and adding value to the experience, leveraging our digital capabilities, and the guest is responding very favorably.”

The post Stripe Offers Adaptive Pricing to APAC/LatAm Merchants appeared first on PYMNTS.com.

Here are some of the most notable quotables for the week ending Aug. 2 in case you missed them.

We started the week with the latest installment in our “A Day in the Life of a CFO” series featuring an interview with CSG Chief Financial Officer Hai Tran, who told PYMNTS in “CSG CFO: ‘True Decision Support’ Is Digital Transformation’s Holy Grail” that the digital transformation sweeping across industries has impacted the finance function.

“The holy grail for digital transformation is to get to true decision support, where we’re really providing data-driven optionality and information and choices; where we fully analyze the implications of the path that we select,” Tran said, noting that “most companies don’t get there … you have to bring institutional knowledge to bear, and that’s where experience matters.”

Then we went for a deep dive into our “What’s Next in Payments” series with

In an interview for “Maverick COO Says Embedded Finance Drives Growth and Personalization in Digital Ecosystems,” Maverick Payments Chief Operating Officer Ben Griefer told PYMNTS that the integration of financial products and services into digital ecosystems is transforming commerce.

“With the advancements of technology and the platforms businesses rely on to run their operations, they are looking to integrate financial products to give their customer base more value,” Griefer said.

“On the flip side, it ultimately drives more revenue,” he added.

Data found its way into our series as well. In “All Signal, No Noise: How Item-Level Data Brings Retail and Banking Intelligence Together,” we found that unification is the key to unlocking maximum data potential, according to Banyan Chief Commercial Officer Mike Minelli.

“Unifying data views starts with recognizing that both banks and merchants are dealing with the same customer, but from different perspectives,” Minelli said. “The key is that they’re starting to realize they can help each other by providing signals.”

Embedded finance is shaping up to be one of the most talked-about trends of the year so far. In “Mastercard Sees Embedded Finance as Revolutionizing Digital Payments,” Jennifer Marriner, executive vice president, Global Acceptance Solutions, at Mastercard, said: “Embedding [payments and financial products] across the value chain and within all of the experiences that a customer is going through in that commerce environment is incredibly important.”

“B2B transactions have traditionally had a slower approval process, and B2B players have been slower to adopt new technology,” she added. “But what we’re seeing with a shift to digital is that there is now more data, more controls, stronger authentication coming into that B2B space, all the while bringing down the cost and improving the risk models. We’re definitely seeing on the B2B side a realization that there’s a way they can streamline their business through embedded finance.”

We picked up the international action later in the week with Debo Sen, head of payments at Citi Services. In “Citi Services Head of Payments Says Instant Is In as Global Dynamics Shift,” Sen highlighted the rapid adoption of these new payment rails in regions like Asia-Pacific and Latin America, with India and Brazil leading the charge.

In India, about 85% of all payments are made in real time, thanks to the Unified Payments Interface (UPI) system, a testament to the country’s leap in digital payments infrastructure. Brazil follows closely with nearly 80% adoption. But this trend is not limited to emerging markets, she added, noting that the United States and the European Union are also advancing regulations and infrastructure to support real-time payments.

“We’ve been tracking the momentum in instant payments, or real-time payments, for a long time,” Sen said.

“The interesting thing is there is always a lot of conversation as to whether instant payments will cannibalize other methods of payment — but in fact, it is digitizing cash in those economies and eliminating cash in many cases,” she added.

And we ended the week with taxes. In “Mind Your B’s and P’s: IRS Notices and Penalties Loom for Unprepared Firms This Fall,” Wendy Walker, vice president of Regulatory Affairs at Sovos, said when information is missing or doesn’t match IRS records, hefty fines can accrue — and the administrative burden of keeping track of all those details is considerable. A proactive approach can help head errors off at the pass.

“If you’re in a company that does anti-money laundering practices or know your customer and you’re collecting a bunch of that information, unless you are actually verifying that TIN to the IRS database, verifying to [any] other database doesn’t matter from an IRS perspective,” Walker said.

The post They Said That: Notable Quotables for the Week of July 29 appeared first on PYMNTS.com.

Tokenization is a tech-enabled way to safeguard sensitive information by replacing it with non-sensitive, scrambled strings of information.

The practice of tokenization within the financial services realm might be most readily apparent with the tens of billions of tokens issued by payments networks, where progress is charted in announcements, as well as management commentary on quarterly earnings calls.

Visa crossed the 10 billion token mark in June. The company noted that replacing sensitive consumer-level data with a cryptographic key, or token, saved $650 million in fraud in the prior year while driving over $40 billion in incremental eCommerce revenue for businesses globally.

In terms of being a business driver, “in Acceptance Solutions, third-quarter growth was driven by increasing utilization across both token and eCommerce-related services,” Visa CEO Ryan McInerney noted on an earnings call.

Mastercard, for its part, notched its own milestones. During an earnings call, CEO Michael Miebach told listeners that replacing payment credentials with a digitally secure token has had a positive impact on commerce.

“When deployed, fraud rates decrease, and approval rates improve,” he said. “So, launching a decade ago, the technology has been broadly adopted around the world. In fact, we surpassed 22 billion tokenized transactions in the first half of 2024, up 49% versus a year ago.”

The Monetization Potential

Tokenization, Miebach said, also “makes checkout more secure… We are working with our merchants and bank partners to drive adoption. Click-to-Pay transactions more than doubled year over year in the first half of 2024.”

The advent of tokenization, he said, gives Mastercard “an opportunity to build a whole set of services on top of the basic token that we can price for, and that we feel we should price for, because they drive a better outcome in terms of better approval rates, lower fraud and so forth for our customers.”

Thredd CEO Jim McCarthy told PYMNTS last month that tokens, once device-specific or wallet-specific (as had been the case with Apple Pay) have evolved “into not just the digital credential, but the programmable one.” The token can now take on different “characteristics,” depending on where and how it’s being used — as a credit, debit, or buy now, pay later (BNPL) option.

The programmable nature of tokens, underpinned by blockchain and smart technologies, means that data, assets and even payments can be executed with improved security and sets of rules governing what’s changing hands and when across verticals as diverse as real estate, gaming and commodities markets.

Last summer, Mastercard launched its Mastercard Multi-Token Network to help foster the creation of these tokens (and conduct screening and transaction monitoring) to support new business models across various sectors using tokenized bank deposits.

Tokenization platform OpenEden announced in a Thursday (Aug. 1) press release that it will bring tokenized U.S. Treasury bills to the XRP Ledger. Ripple is investing $10 million into OpenEden’s TBILL tokens as part of a larger fund that will allocate the Treasury bills provided by OpenEden and other issuers.

The ledger offers automated market maker functions, which improve the liquidity of the trading itself, and simplify, in general, the exchange of assets, which in turn can open new revenue streams for financial services firms.

Earlier this year, the Bank for International Settlements announced its joint efforts with seven central banks — including the Federal Reserve Bank of New York — to test tokenization to improve cross-border payments.

J.P. Morgan Chase is one of the largest financial institutions making forays into the tokenized space. It said last year that its tokenized collateral network facilitated its first collateral settlement for a live client over-the-counter (OTC) derivative transaction. The company said in a paper issued jointly with Oliver Wyman that “deposit tokens could further support economic activity in the digital space, including in a ‘Web3 economy’ where significant economic activity happens on shared ledgers, with tokenized asset transfers settled via deposit tokens. This digital economy would be facilitated by direct, instant and atomic exchanges between peers.”

For payments networks in particular, tokenized deposits represent an opportunity. Visa said the tokens in this case are “the digital representation of bank deposits where money deposited with a bank is minted on that institution’s own blockchain ledger with the backing of that financial institution’s balance sheet.”

In tandem with HSBC and Hang Seng Bank, Visa embarked on a tokenized deposit trial to settle a high-value real estate transaction and merchant/acquirer fund flows.

The post Tokenization’s Rise Offers New Ways to Monetize Data and Real World Assets appeared first on PYMNTS.com.

The IPO market has rebounded, up 30% for the first half of 2024 year over year. Venture capital has also seen a 20% uptick from last year. Deal sizes have increased across sectors as diverse as artificial intelligence, healthcare technology and climate technology.

“We’re starting to see more and renewed interest from crossover and mutual fund investors in later stage rounds … and there’s a record amount of dry powder for venture capital and growth equity firms that have been kind of sitting on the sidelines,” Melissa Smith, co-head of innovation economy and head of specialized industries for J.P. Morgan commercial banking, told PYMNTS.

Looking out to the end of the year, based on public filings and J.P. Morgan’s own pipeline visibility, the current year could log $30 billion in terms of IPO volumes, above $19 billion in volume seen last year, Smith said.

Beyond those optimistic developments, like just about everyone else, she noted, founders are “trying to figure out where things are headed from a broader macroeconomic perspective.”

The prevailing wisdom is that the Federal Reserve will start lowering rates at some point during the third quarter of 2024. Against that backdrop, the U.S. economy seems like it’s moving toward a soft landing.

Serving and Shaping the Ecosystem

But founders must be ready for all sorts of permutations of reality and in the meantime are steering their firms through growth, investment and seed rounds, using a combination of funding and partnerships to bring their innovations to market. Preserving cash flow is imperative, and banking partners can help provide stability and visibility into day-to-day cash management, Smith said.

The investment community is a tight-knit one, Smith said, adding that “founders and partners and firms are clearly constantly talking to each other, sharing ideas, seeking advice and forming powerful connections.”

At the center of it all lies J.P. Morgan, with a full suite of solutions and expertise to help those companies connect and innovate collectively.

Smith noted that “we want to, and can, holistically serve the ecosystem” across portfolio companies, founders and VC partners with payments and liquidity solutions and financing alternatives.

By way of example, she offered up J.P. Morgan’s continued journey with Closinglock, which provides wire fraud prevention and FinTech solutions to the real estate industry. The bank has supported Closinglock from the seed stage to its current role of providing traditional banking services to the company. Beyond those interactions, J.P. Morgan has also helped Closinglock embed payments into its platform.

Smith said traditional banks can bring a multi-disciplinary approach to helping client firms manage cash flow and operations more efficiently — in contrast to FinTechs, which as partners, may have niche expertise but lack that broader worldview. But there’s been a positive knock-on effect from the rise of FinTechs, she added, as they’ve forced banks to fine-tune their own innovations and how they partner with corporate clients in the startup community.

The financial institutions, she said, “are learning a little bit from the FinTechs and how nimble they’ve been in terms of the client experiences that they have built.” The banks also have inherent advantages tied to the scale and breadth of their payments and cybersecurity and risk management offerings.

“Having the perspective of some of the largest [client] companies in the world, and how they’ve built their own infrastructure to get there, is advice and dialogue worth having with the earliest stage companies,” Smith said.

In the coming months and years, Smith noted, J.P. Morgan is focused on honing its digital experiences for its customer bases, improving its onboarding capabilities and offering digital end-to-end workflows to a variety of sectors and subsectors.

“We’re not here to just be what people would consider a traditional banking provider,” Smith said. “We want to be a partner to these companies, these firms, these founders in order to help meet any of their businesses’ challenges or objectives and help them scale and grow … and supporting the founders as investors in the innovation economy.”

The post J.P. Morgan: Collaboration Helps Startups Scale the Innovation Economy appeared first on PYMNTS.com.

And as we navigate through 2024, the payments industry is undergoing transformative changes, driven by innovations spurred by the rise of new payment rails and ongoing efforts toward standardization.

“We’ve been tracking the momentum in instant payments, or real-time payments, for a long time,” Debo Sen, head of payments at Citi Services, told PYMNTS during a conversation for the series, “What’s Next in Payments: The Halftime Report.”

Sen highlighted the rapid adoption of these new payment rails in regions like Asia-Pacific (APAC) and Latin America, with India and Brazil leading the charge. In India, about 85% of all payments are now real time, thanks to the Unified Payments Interface (UPI) system, a testament to the country’s leap in digital payments infrastructure.

Brazil follows closely, with nearly 80% adoption. But this trend is not limited to emerging markets, she added, noting that the U.S. and the European Union are also advancing regulations and infrastructure to support real-time payments.

“The interesting thing is there is always a lot of conversation as to whether instant payments will cannibalize other methods of payment — but in fact, it is digitizing cash in those economies and eliminating cash in many cases,” Sen explained.

Enhancing Payment Experiences and Benefits

The shift to real-time payments is driven by the demand for faster, more convenient, and secure payment options. For merchants, these new rails offer reduced transaction costs and the finality of payments, crucial for cash flow management.

The immediacy of transactions also improves customer satisfaction, allowing businesses to provide quick refunds and compensate for service disruptions, such as delayed flights, thereby maintaining customer loyalty even during challenging times, Sen said, noting that Citi Services itself operates in 65-plus markets for instant payments, and is continually enhancing its cloud-based, always-on payment capabilities.

She added that innovations like pay by bank, QR codes, and instant direct debits are reducing friction and costs for consumers and merchants alike.

Still, the transition to real-time payments and other digital payment methods necessitates significant infrastructure investments. Banks and financial institutions must upgrade their systems to handle always-on, high-volume transactions. This includes enhancing data verification processes and ensuring the security and reliability of payment networks.

Sen pointed out that while the industry is making strides in infrastructure readiness, challenges remain, particularly in areas like account verification, which varies widely across markets. Developing consistent and efficient solutions for issues like credential management and dispute resolution is crucial for the widespread adoption of these new payment systems.

Path to ISO 20022 Standardization

Cross-border payments remain an area of focus for innovation. Sen explained that Citi has been working to improve the speed, cost-effectiveness and transparency of these transactions. Initiatives like Swift GPI and the adoption of ISO 20022 are pivotal in this regard. These efforts are aimed at providing richer data, reducing friction and enhancing the traceability of cross-border payments.

The integration of cross-border payments with instant payment systems and digital wallets is another area where progress is being made, she added, noting that FinTech companies also play a crucial role in the payments ecosystem, driving innovation and reducing friction in processes like know-your-customer (KYC) and remittances.

Citi collaborates extensively with FinTechs, leveraging their capabilities to enhance its service offerings while also providing these companies with access to Citi’s extensive infrastructure. This symbiotic relationship fosters a more dynamic and responsive payments environment.

And of course, any discussion of payments innovation would not be complete without touching on the ongoing migration to ISO 20022, a standard for electronic data interchange between financial institutions.

This standardization effort aims to improve interoperability, reduce manual interventions, and enhance compliance capabilities. The richer, more structured data enabled by ISO 20022 will support better customer experiences, streamline reconciliation processes, and provide the foundation for new value-added services, Sen said.

As the payments industry evolves, new technologies such as tokenization and smart contracts are emerging as potential game-changers.

Sen explained that Citi has been experimenting with tokenized bank liabilities and smart contracts for trade transactions, showcasing the practical applications of these technologies. Initiatives like Project Agora, involving central banks and commercial banks, are exploring the potential of tokenized assets for cross-border payments, indicating a future where digital tokens could revolutionize the way we conduct international transactions.

The post Citi Services Head of Payments Says Instant Is In as Global Dynamics Shift appeared first on PYMNTS.com.

“With the advancements of technology and the platforms businesses rely on to run their operations, they are looking to integrate financial products to give their customer base more value,” Ben Griefer, COO at Maverick Payments, told PYMNTS for the series “What’s Next in Payments.”

“On the flip side, it ultimately drives more revenue,” he added.

While historically, non-financial platforms and applications were hesitant to venture into financial services, steering clear of payments, banking products and lending due to the complexities involved, these barriers have diminished as turnkey technology marches on.

The term “embedded finance” can include anything from offering loans at the point of sale to providing insurance within a product purchase journey. The goal is to create a more seamless and convenient experience for customers, who can access these services without leaving the platform they are already using.

Embedded Finance in eCommerce and Beyond

Platforms like customer relationship management (CRM) systems and shopping cart platforms, which businesses rely on for daily operations, are now able to offer financial products. This integration fosters a “stickiness factor,” as Griefer described it, enhancing customer loyalty and retention.

The embedded finance model also allows businesses to collect data on customer behaviors, he noted, such as spending habits and chargeback history. This data can be used to offer personalized financial products and services, such as tailored loan offers or customized insurance plans.

By leveraging this data, businesses can better understand their customers’ needs and provide more relevant and timely financial solutions. This personalization not only improves customer satisfaction but also increases the likelihood of customers using these services.

And for merchants, the integration of embedded finance presents lucrative opportunities, especially in the card-not-present eCommerce sector.

According to Griefer, platforms that focus on subscription management, eCommerce websites, and similar services are looking to offer financial products like fraud prevention, chargeback management and payment processing. The key to success in these integrations lies in a frictionless onboarding process, which is crucial for achieving high adoption rates.

Adoption Trends and Future Directions

The adoption of embedded finance varies, with payments, lending and general banking products being the most prevalent. Griefer explained that the adoption often depends on the specific needs of the platform’s end users. For instance, business-to-business (B2B) platforms may see more adoption in commercial card issuance, while eCommerce platforms may focus on payments and fraud prevention.

A critical concern for businesses considering embedded finance solutions is scalability. Griefer emphasized that these solutions are highly scalable, leveraging the infrastructure and technology of established payment processors, such as Maverick Payments. This approach allows businesses to white-label payment systems, thereby benefiting from robust compliance and regulatory frameworks without the associated overhead.

“It’s extremely scalable,” Griefer said, “because businesses can focus on their core offerings while relying on our infrastructure for payments and compliance.”

And market sentiment around embedded finance is positive. As businesses become more educated about the benefits, there is a growing interest in integrating these solutions. While platforms from the software-as-a-service (SaaS) world may not have a traditional payments background, they recognize the value of offering financial services to supplement their core products, Griefer explained.

That’s why, as embedded finance continues to evolve, Griefer predicts further integration of financial services into non-financial platforms. “There’s a huge need for businesses to have more tools and services at their fingertips,” he said, pointing to the potential expansion into areas like payroll and more sophisticated banking services. The trend suggests that businesses will seek to offer a consolidated system that can handle various financial and operational needs, providing a comprehensive solution for their customers.

The post Maverick COO Says Embedded Finance Drives Growth and Personalization in Digital Ecosystems appeared first on PYMNTS.com.

And providers are working around the clock to give them exactly that.

The emergence of open payment platforms, as one example, represents a significant step forward, offering a more flexible, secure and efficient approach to managing transactions, Andy McHale, senior director of product and market strategy at Spreedly, told PYMNTS.

“It’s an evolution of payments orchestration … as eCommerce has evolved over the last 10 to 15 years, consumer expectations have grown around how seamless their embedded payments experiences are,” McHale said. “The best payment experience is one that a customer doesn’t even notice.”

While orchestration focuses on facilitating transactions from point A to point B, open payment platforms encompass a broader spectrum of functionalities.

Open payment platforms aim to meet new expectations by integrating additional value-added services and providing a more seamless experience for consumers and merchants alike. This evolution, McHale said, is driven by the need for solutions that not only handle payments but also offer support tools for merchants and enhance the overall payment flow.

Understanding Open Payment Platforms

The goal of open payment platforms is to seamlessly connect and facilitate merchants’ payment flows, addressing their unique needs and helping them expand into new markets with minimal friction.

McHale gave as an example a U.S.-based streaming content platform looking to extend its reach to Latin America, Africa or Europe by leveraging the flexibility of an open payment platform without needing additional integrations.

“The nice thing about an open payments platform is it gives you flexibility. You can start small and grow into other things, and you don’t have to go get another integration to add the next piece, you can do it through the existing platform, and in many cases it’s a low-code, perhaps a toggle, or something very simple to add to a workflow,” he said, adding, “If a merchant starts as a U.S. business and wants to expand to another region, they can very easily add a second provider through their existing platform.”

This flexibility is particularly beneficial for subscription platforms, streaming content providers and marketplaces, allowing them to adapt and scale their operations.

For businesses considering the integration of an open payments platform, McHale recommended a “crawl, walk, run” approach. This method allows merchants to start with basic orchestration and gradually build upon their success.

“The payment stacks inside a merchant or ISV [independent software vendor] are high-risk things to touch. We talk about getting the building blocks going so that you see success and can grow on top of that success,” McHale said.

Vision for Open Payments

In an era marked by frequent cyberattacks and data breaches, security is paramount. Open payment platforms offer robust security measures to protect data and combat fraud.

“Security and fraud are never one-and-done,” McHale said. “You always have to be keeping up with trends, patches and breaches as they come up in the market.”

And open payment platforms provide foundational tools for PCI compliance, tokenization and secure payment method management. They also connect merchants to third-party fraud prevention vendors and other security services, ensuring they remain protected against evolving threats. McHale said this approach reduces merchants’ risk by minimizing their exposure to sensitive data.

He said Spreedly is at the forefront of the technological advancements represented by open payments platforms, continually exploring various avenues to integrate emerging technologies such as open banking, security, fraud prevention, data analytics and artificial intelligence (AI) into its open payment platform.

“We’re excited about the opportunities and interesting problems out there to solve for platforms, merchants and ISVs. It’s an interesting time in the industry,” McHale said. He noted that as these platforms continue to evolve, they will likely play a crucial role in optimizing authorization rates, reducing loss rates and accelerating time to market for businesses expanding into new regions.

The post Payments Orchestrators Become Open Payment Platforms to Improve eCommerce Efficiency appeared first on PYMNTS.com.

Visa Direct will be integrated with Temenos Payments Hub and made available to banks via Temenos Exchange, the company’s ecosystem of partner solutions, the companies said in a Tuesday (July 16) press release.

“By combining Visa Direct’s capabilities with our flexible Payments Hub and integrated account services, we are empowering banks to turn on a new distribution option with ease and provide their customers with seamless and secure international payment experiences,” Mick Fennell, business line director — payments at Temenos, said in the release.

With access to the Visa Direct network, banks can move money to billions of endpoints in more than 190 markets and 160 currencies with real-time cross-border and domestic payment solutions, according to the release. Use cases for cross-border payments include person-to-person (P2P) payments, funds disbursements and bill payments.

The integration of this solution with Temenos Payments Hub will allow Temenos customers to incorporate Visa Direct’s payment capabilities alongside other payments services on a single platform, the release said.

Temenos Payments Hub manages multiple payment clearing rails and services, as well as multiple payment types and schemes, with smart, intelligent routing, per the release.

“The integration of Visa Direct’s money transfer solutions with Temenos’ payments capabilities will streamline the process of deploying, scaling and maintaining ongoing interoperability for cross-border payments,” Edward Chandler, senior vice president and head of money movement solutions, Europe at Visa, said in the release.

Visa’s efforts, via Visa Direct, have made headway into forging the connectivity needed to drive instant payments, Ruben Salazar, senior vice president and global head of Visa Direct, told PYMNTS’ Karen Webster in an interview posted in December 2023.

The payment network has developed, with partners, aliases and directories that allow instant access to sender and receiver bank accounts by linking to emails or mobile devices — even nicknames.

“The alias is connected to multiple payment capabilities or credentials and … connect one network to another network to facilitate [faster] transactions,” Salazar said.

As for Temenos, it said in January that it launched a program to help banks modernize, providing them with a fast and low-risk route to a modern cloud-native architecture.

The post Temenos and Visa Partner to Provide Money Movement Solution to Banks appeared first on PYMNTS.com.

Christina Potter, head of eCommerce at Trustly, told PYMNTSTV that paying by bank also has benefits for end consumers, tied to a better user experience and better security. We’re not all that far away from seeing cash-back and rewards programs being offered in tandem with those payments, as consumer- and transaction-specific data help tailor those perks.

For the consumers, she said, paying via bank “allows them to leverage other payment methods beyond credit cards,” which she noted can be an expensive option, given the current interchange rate environment.

The company, she said, offers a low cost and easy way for retailers to accept payments via bank accounts, using ACH rails. Trustly, she said, operates as one of the largest providers of open banking payments — and is on track to enable $100 billion in transactions this year as the firm works with some of the largest marketplaces and retailers.

Lowering Transaction Costs

Open banking has the potential to lower transaction costs, Potter said. She said credit card transactions are reliant on a five-party model — tied to customers/issuing banks/merchants and acquiring banks.

“At every part of the process,” she said, “there’s a fee to be paid.” Trustly’s ACH-focused model, she said, is a three-party construct, which cuts out the middlemen and gives merchants more control over payment flow, and consumers don’t have to enter their information more than once, as they leverage bank logins and passwords to engage in transactions, which in turn leads to a better customer experience.

“You can set it and forget it,” said Potter, who added that “consumers don’t have to worry about card expiration dates or new card numbers.”  That experience is markedly different than what’s typically seen with digital wallets and is of particular benefit to subscription firms.

Asked by PYMNTS about the specter of fraud, Potter said that enhanced consumer authentication protocols are in the mix through multifactor authentication with bank support. Trustly, for its part, also offers a guarantee, through its real-time connectivity with the banks, that the transactions will go through, unhindered by insufficient funds, fraud or payment stops.

“We’ve been able to create our own risk algorithms and utilize data,” as she said, “to put our money where our mouth is.”

Read more: Lenovo and Trustly Team to Offer Open Banking at Checkout

With guarantees and an improved consumer experience, and better fraud controls, Potter said that merchants see higher approval rates thanks to open banking, and larger basket sizes as consumers don’t wind up bumping up against their credit limits.

Looking into the product roadmap, Potter said that open-banking and pay-by-bank options will embrace rewards programs and increased discounts to help spur further adoption. When a consumer is linking their bank account, she said, retailers can get the information they need to determine creditworthiness, can identify consumer spending habits and provide better and more personalized offers.

“The retailers that adopt this are going to be among the most innovative players and will be steering ‘ahead’ in terms of payment acceptance. … There’s a ton of room for growth and the innovation is there,” she told PYMNTS.

See more: Trustly Inc. CEO Says Pay by Bank Is the Next-Gen ACH

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