The Payments-as-a-Service Push

Imagine being able to onboard new technologies without having to get bogged down in the technical details of the integration and maintenance. Verifone’s SVP of Payment as a Service Vincent Roland tells MPD CEO Karen Webster that Payments-as-a-Service is all about giving banks and merchants all of the advantages of new technology at the point of sale, but none of the headaches.

KW: Payments-as-a-Service is an interesting label because it suggests the terminal or the hardware is a physical connection point, but really the software within the hardware is what allows merchants to take advantage of new payments and commerce opportunities. Is that really the goal of Payment as a Service at Verifone?

VR: The No. 1 goal is to ease the process of onboarding merchants, for both the merchants themselves and the bank partner. Whether something breaks down or there is a change in regulation or security, and even something like the introduction of Apple Pay in Australia, we take care of managing all changes across the supported terminals.

Much of the work happens as a single service, such as management of the terminal, help desk support and field services, but we also include value-added services. As transactions go through the gateway we are able to show reporting and real-time the data. But it is important to not only monitor transaction activity in-store but also to manage the financial flows money merchants receive.

For the banks, the Payment as a Service platform removes the technical burden away, in a time of fast-moving technologies where things are changing in the virtual world it seems like every week. We’ve made no changes to a bank’s system — they just carry out the financial part of the transactions and we take all of the technical responsibilities out of their hands.

Performing this function also builds into our commerce enablement application, which covers other solutions such as loyalty and rewards, couponing and mobile wallets, while providing a way to introduce new value-added services to the existing platform even faster.

The people who are investing in the latest payment processes and technologies are much more global today. Looking at new initiatives and mobile wallets, its all coming from new companies like Google, Apple, PayPal and so on. Of course those guys want to play a global game, they don’t just want to play a local game.

KW: Do you see Payments-as-a-Service gaining a lot more interest and traction because of the availability of innovations like Apple Pay and Android Pay and other things that are coming at merchants now with more frequency?

VR: Yes, especially due to an increase in the complexities that come with new payment technologies. From a merchant point of view, of course they would like to offer all of the available payment innovations but when they look at the infrastructure around them it’s not so easy to manage the accompanying complexities. Payments-as-a-Service takes all of those challenges out of the hands of merchants who are unable to manage these ever-changing payment technology infrastructures on their own.

The benefits also reach acquirers, who are used to managing many of the infrastructure requirements alone. The traditional model required buying a terminal, purchasing software services and then contracting someone to install, maintain and repair the terminal itself. Even across different countries where the markets were built in different ways, the way this was done in the past always involved a multitude of partners who were not very coordinated and resulted in complexity increasing. The management of this complexity was becoming a non-efficient and unscalable process.

Today, they realize it is easier to transfer the accountability of all that to one party who is capable of managing all the value-chain for a single price or price model that makes all of the challenges invisible to them.

KW: You have recently announced that Westpac will be the first bank in the Asia Pacific region to offer its merchant clients a full terminal management provided by Verifone. What can Westpac’s merchant clients do now that they could not do before?

VR: Verifone’s Payment as a Service takes transactions from the virtual or physical point where they typically take place and brings them directly to the acquirer, which in this case is Westpac, who then handles the relationship with the merchant. It’s a little more than just terminal management because of course we install terminals and service those terminals, but we also take the transactions through our payment services gateway and from that place we can enrich the transactions. This happens not only for the in-store solutions, but also for online and mobile, which are known as omnichannel transactions today.

The most significant part of the deal is that we take care of everything from the time Westpac provides us with the name of the merchant and what kind of shop it is. We install a completely new terminal from the latest generation of mobile terminals offered by Verifone, which have the ability to run both payment applications as well as a number of value-added applications. For example, Westpac has decided to pioneer the China Union Pay transactions, including the contactless version.

The services are important but it is also about making sure the infrastructure is up and running at all times, because payments is a fast environment where complexities are growing everyday. But we want to always make sure those complexities remain invisible to the merchant by removing hurdles in production and protecting against any risks in terms of security.