The MasterCard MCDS conference took place November 4-6. The conference covered quite a few payments topics and trends. It was a great opportunity to meet with colleagues and get an up-to-date picture of where we are headed as an industry.
Changing Payments Environment
Early in the conference, MasterCard focused on the “changing environment” of the payments industry. Most of the seminars and panels channeled the discussion towards defining and analyzing the major trends that shape the current payments landscape.
Company representatives noted that the big change they are seeing is the move to digital payments, whether in browsers, contactless or in-app.
They talked about two major trends in this arena:
- Shift from plastic to mobile payments
- The Internet of Things
As a result of the shift to digital, data security becomes a higher priority. Experts at the conference discussed a number of innovative solutions to enhance fraud prevention, including MasterCard’s tokenization product, biometrics and even selfies.
Regulatory Trends of Note
There are two significant EU payments regulations that were discussed at the conference – the Interchange Fees Regulation (known also as IFR or Regulation 2015/751) and the PSD2 (including the EBA security regulation).
One of the central aspects of IFR is that it imposes a cap on interchange fees for consumer credit and debit cards within the EU. These caps are applicable for the card schemes when determining the cross-border rates and to the EU countries’ local regulatory authorities that regulate the domestic interchange in each country. An additional point to keep in mind about IFR is that it separates three-party processing – this might lead to changes in the way American Express will work and contract with acquirers around Europe.
Another key regulatory issue raised at the conference was that EBA Clearing requires all transactions to become highly secure transactions (min of 2 layer authentication), unless the merchant believes a particular one is a low-risk transaction – the UK is the only country that protested this, and isn’t requiring their merchants to comply till the next phase of the PSD2.
Tech Trends Gaining Traction
As we all know, technological innovation waits for no one. In addition to the changing environment and regulatory issues, another hot topic of discussion was current and future tech opportunities and trends.
Some of the main trends mentioned at the conference included:
- The use of Big Data to provide merchants with customer profiling intelligence.
- The move to mobility and the concomitant need for enhanced security.
- The need to provide interchange transparency and abide by pricing laws.
As these tech trends gain traction, acquirers will find that the best way to differentiate themselves will be through pricing, POS terminal support and acceptance rate increases.
Ayelet Har is our VP of Global Program Management