Creditcall: “A standards driven market is very difficult to disrupt”

creditcall_interviewContactless Intelligence met up with Creditcall’s Head of Payment Services, Liz Coode at the 2016 Open Standard Forum, in London, to talk about standards, contactless and charities.

The Bristol-based FinTech company’s solutions ensure payments flow securely and reliably – whether attended, unattended, online or mobile.

Creditcall positions itself as an omni- channel payment gateway provider – could you explain to us what is meant by this?

Omnichannel to us means the ability to accept transactions through a variety of environments. For example, a business may do a lot of transactions through eCommerce, but may also need to take purchases face-to- face. You may have a kiosk to take un- attended payments and then perhaps also have an app for a card-on-file or a card not present (CNP) transaction. Creditcall’s omnichannel position is to support a number of different devices and technologies and to provide a payment solution throughout all of these different environments.

EMV continues to be the payment technology of choice. In your opinion, how important are open standards for the adoption of new technologies?

The payment industry is not so much about open standards but more about layers of standards and approval authorities. Creditcall has to work with a number of different certification and approval bodies, such as PCI or EMVCo, for instance. We also work with a number of specific schemes (such as us seeking approval from Visa for key injection after becoming PCI PIN certified) and acquirers (gaining approval from First Data for key injection after becoming PCI PIN and TR39 certified). If payments are going to take more of a standardisation route in the future, this layered structure would have to reduce significantly.

Fundamentally, it is important that all payment-orientated companies design to the same standards and ensure that inter-device connectivity is as easy as possible. In principle, that should ease some innovation, mainly for incumbents. However, a market that is standards driven is difficult to disrupt as you have to provide exactly the same functionality as everyone else – as such you can only disrupt by reducing prices for your solution. This drives the price level down in the market and consequently shifts the balance of power from suppliers to operators and sometimes hampers innovation and entry of start-up companies.

Contactless technology seems ubiquitous in the UK, yet has not been rolled out as successfully in many other European countries. Creditcall has been very active in implementing contactless technology. What are the rules of using contactless successfully?

The key point here is to understand what the technology is, how new it is and how rapidly the standards and availability of different solutions change. It’s easy for some- one to think that you can just choose any contactless reader, install it and start taking payments. However, be- cause of these standards and regulations just mentioned, the various hardware has to be integrated and certified with each acquiring bank first, which is actually quite limiting in real deployment terms. Creditcall has to work with hardware providers and the acquirers to finally get a solution to market. It is vital that merchants speak to us at the very earliest opportunity and get advice on what is actually available for deployment.

Some of the reasons why we have been so successful is that we actually recommend a specific combination of hardware and acquiring banks to our customers at an early stage. For example, in vending we work with partners like the Vianet Group, OTI and Crane Payment Innovations. They come to us with a new bespoke device for the vending market and ask us how to go about implementing contactless technology. We work with them to identify the best acquirer to work with, to have the widest reach, being realistic about delivery timescales, explain to them why they must go to the market with a message for their customers based around what’s available, when and most importantly what the limitations are.

The unattended market is one of the core markets for Creditcall. What role does contactless play in this field?

Unattended is one of the key areas where contactless has been long overdue because there have been numerous obstacles. In a classic retail environment, full Chip and PIN is required because the transaction value can be much higher. In addition, for the time being, Visa and MasterCard say that you will not be able to deploy a contactless only solution in retail, as not everyone has a contactless card. The merchant needs to ensure that they can accept all cards including Chip and PIN and mag stripe. Con- tactless is a nice to have, certainly, but it is not as transformative in re- tail as it is in the unattended market.

In unattended, a full Chip and PIN reader can be very expensive and the values are often lower (classic markets include transportation such as bus and train tickets, parking tickets or vending of small transaction value items such as snacks). There are several reasons why contactless will work great in this environment. Firstly, contactless hardware is less expensive, secondly the transaction time is much quicker – a big benefit in high traffic areas and during rush hour – because contactless is generally per- formed offline meaning an almost instantaneous transaction time-frame.

The other issue is that scheme rules favour unattended environments for contactless. Since November 2010 merchants in an unattended environment have been able to take card payments without a PIN pad for certain values if a solution had contactless. More recently contactless only has become acceptable in certain environments. Vending was the first and in July 2015, pay and display parking was added to the list. I guess, the reason being that if you can’t buy a soft drink with a contactless card then it’s not the end of the world, it won’t ruin your day and you may, in fact, have enough change on you to make the purchase anyway. It could be a similar scenario with parking. Using a contactless only solution is possibly more effective in an unattended environment.

In the UK, charities play a huge role in everyday life and charity collections are an integral part of the high street. Only recently, Creditcall has been involved in the Cancer Research UK’s World Cancer Fundraising Campaign. Do you believe contactless and mobile is the future for charities?

Yes. Absolutely. For a number of reasons, charity could be the ultimate unattended success story.

Charity donations in the street, ad-hoc collections or collection boxes outside shops etc. lend themselves very well to a contactless transaction scenario. For pretty much the same reason as vending or parking; it’s quick, it’s easy and if it doesn’t work it’s not going to ruin your day. It’s a way of facilitating contributions for people who don’t normally pay cash and a lot of people these days don’t carry spare cash on them. If you look at the number of people walking down the street who have any coins on them to spend, it’s probably a fraction of what it was ten years ago. So providing a quick and easy method of card payment is absolutely critical.

Now to be honest, it’s not strictly speaking unattended. The project that we did with Cancer Research UK had its roots in a proof of concept we did with Visa last year for Save The Children. We had developed an on- street collection tin, working with a company called Payter who produce a contactless card reader solution that we actually supply the contact- less kernel for, as well as the payment gateway at the back end.

Strictly speaking, in an attended environment you are supposed to provide a Chip and PIN option as well. We had to get a waiver that could offer a contactless only acceptance. We are working with a lot of different charities at the moment and it lends itself very well to museums, or exhibits where it may not be appropriate to have a person with a tin collecting. At the same time you want to offer people the opportunity to contribute to the maintenance of a particular exhibit environment.This is a perfect environment for unattended contactless. It’s safe, it’s secure, it’s cost effective, it’s easy and it’s permitted by the various card schemes.

So yes. Card payments fill a gap for charity organisations and contactless is the best system for providing donation collections to these worthwhile causes.

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Categories: Contactless Payments

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