The 13th edition of Merchant Payment Ecosystem (MPE) had a lucky break, being one of the last large‑scale conferences to take place before the COVID‑19 virus spread in earnest. The show took place from 18th to 20th February at Berlin’s Intercontinental Hotel, bringing together 1,200 attendees, including 280 merchants and 300 acquiring banks and PSPs, to network and take in knowledge from more than 155 speakers.

MPE 2020 started off featuring a merchants’ workshop chaired by Alan Moss of BluSpecs Innovation attended by 70 retailers. The workshop began with a primer session covering the essentials from the four‑party model to a review of the main technological platforms for in‑store, online and omnichannel card acceptance. Later during the day, executives from a number of vendors and retailers, including SafeCharge, Gett and Riskified, took to the floor to share their thoughts. Efrat Rabinovitz from Riskified introduced its AI platform, which combats the increasingly sophisticated and varied attack vectors through the deployment of complex purpose‑made fraud algorithms and the leveraging of bots to scale up attacks.

David Birch kicked off the main conference with his usual mix of knowledge and charm, pointing out, “The ecosystem is trying to tackle change across multiple axes: This includes the multiple layers of change as firms look for new business models, the transition to direct‑to‑account payment methods, the potential end of cards and POS as the industry shifts into a model of ambient acquiring in a world of internet of things, as well as a kind of swirling regulatory change. Last year PSD was a discussion point; this year it is a panic point. All this makes it genuinely difficult to try and formulate strategies right now.”

Regulation – PSD is now a panic point

It has been interesting to see the narrative on regulation at MPE evolve over the years, from something remote to an issue that one ignores at one’s peril. Case in point is PSD, which cropped up in numerous presentations, panels and in conversation. During a PSD2 panel on day 2, expertly chaired by David Parker of Polymath Consulting, the myriad API standards and the unlikelihood of a unified payment standard was noted. On the bright side, this complexity was identified as a business opportunity for aggregators who can offer a single API solution to fintechs.

Meanwhile, in a parallel track chaired by newcomer Rik Coeckelberg (banking scene), Strong Customer Authentication (SCA) was identified as an additional challenge for European merchants when dealing with increasing mobile adoption. The big question posited was: how do you make sure that the customer experience remains acceptable in a stricter regulatory framework? One answer is the network tokenisation offered by the card schemes, but these are not widely adopted, despite the clear advantages for both merchants and consumers.

Payment innovations in retail under the spotlight – clear business case needed

The interest in innovation in retail never stops, so it was no surprise that it came up frequently. It took centre stage in a dedicated session chaired by Gary Munro (Consult Hyperion) with 4 presentations looking at different aspects of innovation in retail payments, followed by an insightful panel discussion. Boris Griesinger of Hugo Boss was first to present, highlighting the issues a premium retailer faces when it comes to innovating and pointing out that innovation has to come with a good business case, such as a reduction in the number of cash desks in stores. Turning to the realm of e‑commerce, Victor Bergmann of Google outlined the firm’s efforts at walking the tightrope in order to continue providing a seamless Google Pay experience and complying with the looming SCA requirements, while not being a financial institution.

Dimitri Farber from Tiller focused on the hotel, restaurant and café sector, where digital marketing, front of house and in‑app ordering, click & collect and social media are all playing a big part in the ability of restaurants in particular to grow. The emergence of digital services such as Uber Eats, Deliveroo and Open Table provide new avenues through which restaurants can market and attract customers. This is only possible, however, if the merchant has a suitable POS system capable of handling and integrating complex operations, including managing orders from different channels as well as handling reservations.

Petr Baron of TBIBank added an innovation from banking to the mix: The firm spotted that its merchants were in need of a POS financing solution and developed a method of digitising the process, thereby enabling finance checks to be conducted in seconds (both online and offline) and providing a better payments experience for both customer and merchant.

Moving from e- to a‑commerce

The commerce ecosystem is evolving rapidly – China and other dynamic markets are showing the direction of travel, with the smartphone increasingly becoming the preferred channel for many consumers and also playing a greater role as a payment terminal in its own right. Peter Vesco of Rezolve posited a compelling term of the soon to be new normal: anywhere commerce, or a‑commerce.

Wei Zhihong from UnionPay provided valuable insights from the Chinese card scheme. He pointed out that social payments and social commerce are growing in importance not just in China but also in India and the USA, leading to the birth of the super app and with it a transformation from a single service to a platform enabling promotions to reach users directly. Ghela Boskovich of the Financial Data and Technology Association opined that “People’s time and attention are the new oil” and not data, the latter being a constant flow with the key differentiator being how one presents the right information in the limited time and attention one has from a consumer.

Looking at the developing world, Thijs Moser of PaymentGenes quoted a number of interesting datapoints illuminating current trends: Almost two thirds of the 120 million people in Mexico are unbanked, whereas 90% have a mobile phone, illustrating that having accesses to mobile commerce can be a matter of life or death.

MPE 2020 once again shone a light at the myriad issues impacting the ecosystem, and it will be good to return to Berlin in 2021 to take stock of how COVID‑19 will have impacted the industry’s trajectory.