Chairmen Summaries

Summary of Conference Day 1 by Peter Jones, MD, PSE Consulting

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Peter Jones, Managing Director, has over 36 years business and IT experience, 4 with a major European retailer, 17 with a UK clearing bank (Nat West) and 15 as a Director of specialist payment systems consulting organisations. He is the founder and owner of PSE Consulting which he established in 1991. He has particular expertise in high and low value payments, debit and credit cards, card schemes, interchange, EftPos , cross border acquiring and e-commerce payments. Over the past 15 years, he has been responsible for managing and conducting over 600 payments assignments for clients within the UK, Europe and the Middle East. His particular strengths are in developing business and product strategies, facilitating workshops and business case development. He is from an IT background and has led and managed major development projects relating to payments systems. He is well known within European Payments businesses and is a regular writer on payments related articles and a speaker at conferences.

„Day 1 focused on the challenges and opportunities facing acquiring within the EU. Over 17 speakers presented a very wide range of views and opinions on subjects ranging from regulation and compliance, cross border payments, innovation and networks, through to profitability models and new revenue streams.

The first morning session (from PSE Consulting) focused on a retrospective review of successes and failures in acquiring over the past ten years and provided an assessment of the key issues acquiring faces during 2010. The second presentation from First Data provided a detailed analysis of the impact of SEPA, new business drivers, new market entrants and trends in eCommerce and mobile payments. The session on Regulation and Compliance (provided by Cartes Bancaires) looked closely at the latest position relating to SEPA standardisation, certification and early pilots. There was an interesting presentation (by Krzysztof Korus) relating to Payment Institutions and the opportunities for new entrants and merchants to join the card schemes and provide payment processing services.

Two presentations were provided on interchange during the day. The first (by Peter Jones of PSE Consulting) looked at the benefits and opportunities to turn the payments guarantee into an acquirer value added service. The second (by Leon Dhaene) looked at some of the implications of an interchange model based on the recovery of revenues from cardholders and merchants. On the same theme of regulation there was a presentation on the implications of unbundling merchant fees within the French market (provided by Crédit Agricole).

Finally, the morning rounded up with a Panel Discussion on Payment Institutions, the impact of the economic crisis and the shift from debit to credit acquiring with some interesting and forceful views from DG Competition (Jean Alix) on regulation and future intervention into the cards business market.

The after lunch sessions focussed on cross border expansion, strategies and opportunities. There was an interesting presentation (by Equens) which compared developments in the card world with developments in the automotive sector. A major Austrian retailer (OMV) outlined the history of a major project to develop a multi-country acquiring facility for their operations across the EU and the CEE. This was followed by a review of cross border expansion strategies in the eCommerce sectors (by Deutsche Card Services and ClickandBuy).

This was followed by an overview of SEPA and more particularly its impact on electronic payments and cards (by Catherine Gondelmann of Explain). A major Croatian merchant (Konzum) then presented their strategy towards developing an eftpos network and their collaboration with local acquiring banks. Finally, a major software provider (Tieto) provided a review of best practice charge back processing.

After the afternoon coffee break there were presentations from some of the major EU processing and acquiring companies. The first presentation (from TSYS) focused on the need to meet the requirements of the merchant population and to develop market facing products. The second presentation (from HSBC Merchant Services) reviewed the benefits that no line acquirers deliver to the market place. The third (from Raiffeisen International and First Annapolis) reviewed a case study: an assessment of the acquiring business in multiple countries. The final presentation (from Barclays) looked at the difficult, complex sector of selling acquiring services into public sector.

So a most informative and comprehensive day with much audience interaction, good questions and excellent speakers.“

Summary of Conference Day 2 by Mike Hendy, Payment Systems Consultant

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Mike Hendry is an independent consultant in cards and payment systems. He has a degree in engineering from Cambridge and in business from IMI Geneva. He is multilingual and works with banks, transport companies and service providers in Europe, Asia and North America on technology and business strategy issues. He has been particularly dealing with the implementation of chip cards in banking; from January 2002 to April 2005 he was Technical and Operations Director of the UK Chip & PIN Programme. His publications include “Smart card security and applications”, “Multi-application smart cards: Technology and Applications” (2007) and “Smart Card Management Systems: overview and survey” (2007).

„The morning started with two presentations on Data Breaches; this subject is not “top of mind” for most acquirers but the presentations reminded them of the importance of these new laws, which apply alongside PCI-DSS. These were followed by four presentations on the subject of containing and managing different aspects of acquiring risk; the subject of containing risk from major sporting and entertainment events, addressed by David Pollina from Malta, raised the most issues and concerns.

In the second half of the day, the focus was on PCI-DSS, with three presentations from vendors and acquirers, and then on fraud management using databases, rules and neural engines. Despite rather a strong sales approach from some of the presenters, these were all topics close to the hearts of most attendees, and generated considerable interest.“

Summary of Conference Day 3 by Leon Dhaene, MD, NAOME and Chairman, n2euro

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Leon Dhaene has over 25 years of senior management experience in cards and payments, global account management, business development and sales, acquisitions-mergers-joint ventures, performance optimisation and services development, at multinational corporations like MasterCard International (2001-2004), Europay International (1992-2001), Eurocard International (1989-1992) and IBM (1985-1989). As of 2004, Leon created his own consulting practice, called Network of Alliances, Outsourcing and Mergers Experts, and is Chairman of n2euro, a European network of experts in 10 European countries. He has been leading business strategic projects in the global financial & leasing, social services management, environmental and identity control sector; and business development activities in Europe for enterprise software and financial services companies. Leon has conducted major projects in the area of cards and payments, call center technology and management, e-invoicing, fleet and petrol cards, e-commerce, archiving and electronic document management, and SEPA /PSD (SEPA assessments, SCF, SDD, SCT). Leon Dhaene is regularly consulted by capital venture companies as an Analyst Expert. As a leading global card specialist, Leon has been involved in launching several innovative products globally, amongst which the launch of Maestro, an international debit card with over 800 million cardholders worldwide, in 1993 is the most known.

„Ladies and Gentlemen,

I was asked to summarize the last 3 days in 5 minutes, but I’m like Mr Winston Wolf in Pulp Fiction, and I’m going to be there in 3 minutes…

I looked around and concluded : over the last 3 days we had rain, snow, sun and 2 nights full of darkness…

DARKNESS

Light still need to shine over merchant service charges and interchange fees, as Jean Allix mentioned.

SEPA is to a standstill as there is no common European format yet, no clear procedure for merchants to accept new card schemes, no unified certification for payment terminals, transaction processing, or payment cards.

No, Europe will not stand the “indifference test” if nothing happens. We still need a more unified political objective for SEPA.

Penalties on and costs associated with compliance programmes become the single largest budget in the card value chain.

RAIN

One cannot live without water, but who like rain ?

No one likes the idea neither that one day, a merchant could accept a standard card, yet refuse to accept a premium card; however, this is the ultimate consequence of implementing SEPA, as Marc Carlos of Crédit Agricole stated, of the unbundling.

Competition is coming cross-border and whilst this might be a blessing, national acquirers will hate this as rain.

In line with SEPA regulation, French merchants can now underwrite a Carte Bancaire contract without signing a MasterCard or Visa supplement. Was it ever the intention of the regulator to reduce acceptance ?

SNOW

There is probably nothing more beautiful than snow, it covers all dirt under a soft, white blanket, but eventually snow will melt and turn streets into mud rivers.

PCI-DSS is also a nice cover, but lethal if one forgets to manage the processes underneath. Processors may impose strict procedures onto their processes, and dump loads of forms onto their merchants, but what if the snow melts : who’s going to take the liability for the dirt ?

SUN

Luckily, after rain and snow comes sun.

Carte Bancaire is fully unbundled, and is more than ready to play a dominant role in the card world. Forms will be mailed in French. I know how to read French, there is sun in my heart.

Heartland is preparing for EMV and when one of the largest US acquirers and processors prepare for EMV, it will happen. Again, there is sun in my heart !

The war on cash started in a kingdom called Holland. Some Dutch merchants are gluing their cash till and only accept cards. Now that Maestro is at 3.40 eurocents it becomes cost effective.

Other than boosting volumes, creative partnerships, loyalty programmes and POS sharing can help you, acquirers, establishing an improved bottom line in these difficult days.

ENDING

And all of this rain, snow, darkness and sun came on a day of crisis. When will the financial crisis come to an end ? We don’t know. We do know this crisis was a deep one : the French eat more baguettes and more fast food : imagine !!!

Fortunately we are not alone. The European Card Acquiring Forum has brought an impressive line-up of experts and awarded a series of ground breaking projects.

ACKNOWLEDGEMENTS

First and foremost thanking the sponsors of this conference, who made all of this possible. It is a long list :
•    First Data
•    Equens
•    Verizon
•    Samport
•    TSYS
•    ATOS
•    Zecure
•    Tieto
•    Welcome
•    OpenWay
•    Actimize
•    Retail Decisions
•    SIX Pay
•    Trustwave
•    Elavon
•    Diners Club
•    FortConsult
•    First Annapolis

Second, thank and give a warm applause to the organisers, the great team of Empiria Group.

Thirdly, ladies and gentlemen, you were a great audience, a round of applause for yourselves !!!

I all wish you a nice travel back or extended stay in the city of Berlin !

Thank you !
Leon Dhaene“

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