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The future is in your cards

08 Sep, 2016

Well-established banks have been making efforts to adapt to the changing payments landscape by putting in place many initiatives to benefit consumers. Building card acquiring models with its client in a cost-efficient way contributes to improve Treasurer experience.


Marco Marchi, Cash Management Sales Executive, examines the evolution of the payment cards environment, focusing on how Treasurers can improve internal efficiency. 

Today...

Card payments are growing exponentially, with the number of payments per person increasing in every EU country. Concurrently, the fragmented payment landscape in Europe is evolving, gradually moving from isolated markets to a more global and integrated ecosystem aligned to customer behaviour and new regulation, such as the SEPA Card Framework.

What does this mean for treasurers?

Retailers that have subsidiaries in several European countries face the challenge of building effective global card acquiring models in a cost-efficient way. The lack of systems standardisation and harmonisation of tariff conditions in Europe present hurdles to retailers who are seeking to implement efficient and secure card payment services across the entire value chain (i.e. banks  card schemes, processors). Additionally, when expanding to new markets, understanding local consumer habits is as important as systems integration.

Reading the "cards": looking into the future

In a highly competitive environment, a cost effective solution with a standardised technical infrastructure and harmonised tariffs will benefit both the merchant and the end user experience.
"(...) a centralised acquiring platform allows retailers to sign a unique acquiring contract across Europe (...)"
By way of example, La Maison Chopard, the esteemed watchmaker and jeweller, has been a pioneer in this respect. It has understood the benefits of implementing a solid, core payments platform, which at the same time retains the necessary flexibility to adjust to consumer behaviour.

Initially, Chopard built card acquiring services with local banks all over the world; this created a catalogue of material and tariff conditions and prevented a global overview of the process. However, the appreciation of the Swiss franc in 2015 provided Chopard the opportunity to review its hedging and collection policy; consequently, the card acquiring business was identified as a major improvement opportunity.

Working with BNP Paribas, the new card acquiring and cash management solution established by Chopard is both innovative and evolutionary.

From a technical point of view, the pan-European card acquiring solution enables the company to make significant time savings by processing all Visa and MasterCard transactions through the same technical protocol, reducing the need for additional technical developments.

From a cost saving perspective, the platform enables Chopard to bill its clients in their own currency, thereby avoiding foreign exchange commissions.

Additionally, a centralised acquiring platform allows retailers to sign a unique acquiring contract across Europe, which offers end-to-end payments in multiple currencies. Retailers therefore avoid FX costs; benefit from streamlined and robust processes via a single technical protocol and format; and have access to an improved, centralised reporting for easy reconciliation. 
 
 

Beyond cards

Established banks have been making efforts to adapt to the changing payments landscape by putting in place many initiatives to benefit consumers. Their action is in response to the emergence of Fin Techs, mobile payments, mobile commerce, contactless payments and e-wallets – all of which are potential game changers that are disrupting the rules and business practices of the complex payment value chain.

Banks are responding to these new sources of digital innovation by increasing partnerships with third parties. Card acquiring, and – more broadly – the way funds are exchanged will be an integral part of the accelerating digital transformation. Nascent, but rapidly proliferating technologies such as Blockchain with public (or private) ledgers, promise to accelerate transactions by eliminating the need for intermediaries, cutting costs and lowering the risk of fraud, which will ultimately benefit customers.

 
Chopard & Cie SA Highly Commended Winner

Best Card Solution in partnership with BNP Paribas

Treasury Today Adam Smith Awards © July 2016
Olivier Danière, Chopard and Marco Marchi, BNP Paribas
 
Cash Management Sales Executive at BNP Paribas Switzerland
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