Hi Axel, what do you work on at Worldline?
I am the account manager for our iDEAL acquiring banks in the Netherlands.
When did you join us and what were you doing before?
I joined the company in 2012 as a service delivery manager in our Aachen offices in Germany. Before Worldline, I worked in a software development company where I was a developer and a project leader.
How has the payment industry evolved in recent years?
In my opinion, security, trust and digitalization have been the main drivers behind the changes in the last three years. Indeed, customers have been, and continue to be, more and more concerned about who has access to their personal data in a digital world. In order to mitigate this apprehension, e-payments through online banking provide a key value, which is to enable the payment via the customer’s own online banking profile. Since this service (ed: online banking ePayment) is already secured via a strong authentication such as login/password, the trust is already established as customers do not have to enter their personal payment data on the merchant website or other intermediary. Furthermore, the PSD2 (i.e. the second Payment Service Directive from the European Council) will also regulate the access to account by 3rd parties acting as the middle man in online transactions, between consumers and their banks.
How are the consumers impacted by these changes?
There is a lot of movement in this industry and that benefits consumers. Indeed, as new competitors enter the market and new types of services are created, there will soon be a lot of new offers providing a great customer experience. Nevertheless, professional stakeholders must take care not to create confusion in customers’ minds by introducing multiple virtual accounts and subsequent passwords. Upcoming e-Identity solutions will create the possibility to use online banking authentication even for other purposes, such as merchant website login.
And what about the impacts on merchants and banks?
For merchants, the main benefit is, and will be, the variety of solutions and offers available on the market, providing them with alternatives to the core banking offers. This will also directly benefit the consumers as merchants will be able to support different payment methods like eMandates. Merchants, as well as issuing and acquiring banks, can also benefit from additional value-added services, such as cross-selling and account-linked offers, for example, when working closely together. All parties should seriously consider implementing these services as they will allow them to better serve their customers in a world where more and more personal data is being collected.
Banks will face growing competition from players that are not originally from the payment industry. Therefore, they will need to reevaluate their position and online banking is the perfect way to do so as it enables banks to reestablish a direct contact with their account holders.
What is iDEAL and how does it answer these evolutions?
iDEAL is one of the most successful European online e-payment schemes. It is a domestic scheme for the Dutch market that enables Dutch customers to pay on websites where merchants have an acquiring contract with one of our bank´s customers. The Dutch government wanted to put in place a clearly defined consolidated e-Commerce scheme for the Netherlands and tasked local banks with this endeavor, which, in turn, gave birth to iDEAL. It was a success right out of the gates as it covered over 95% of all Dutch account holders from the get-go.
Technically, it works seamlessly for consumers. When they shop online and are on the payment page, they are presented with the iDEAL payment option. Once they select this option, a list of the participating banks appears and consumers just have to select their bank. They are then redirected to their online banking portal where they can securely pay for their online purchase through a pre-filled SEPA credit transfer.
- merchants because this payment is guaranteed and irrevocable;
- consumers because this payment is almost instant, therefore allowing a faster processing and delivery of their order;
- banks because they can use the redirected traffic to their portal to advertise additional services, like payment by installment, for example.
What is Worldline’s involvement in iDEAL?
We are the acquiring processing provider for iDEAL and we are delivering the scheme’s routing service to all iDEAL acquirers (ed: 6 as of today), which means that each iDEAL transaction is currently running through our systems. In 2014, we had around 180 million transactions which lead to over one billion technical messages exchanged by our systems. More recently, Worldline worked with a Dutch bank on the first eMandate Service allowing SEPA direct debit in Dutch ecommerce. With this new step, Worldline confirms its expertise on the whole value chain of SEPA payments.
How do you see the payment industry evolving in the coming years?
In my opinion, there is still a lot of innovation to come in the future as well as new entrants. There will, therefore, be a lot of changes in the industry and we are well prepared for these. Indeed, our teams are always investigating new opportunities as they arise.
Thank you for your time today, Axel. I will leave you with one final question: we live in a hyper connected digital world and, suddenly, you find yourself stranded on a desert island, which electronic product do you have to have with you?
A MP3 player because it does not need an online connection and it can help me pass the time on this island.