EXCLUSIVE: “Every Cloud” – Bill Faris, ACI Worldwide in ‘The Paytech Magazine’
The pandemic tested Cloud’s metal to the limit, paving the way for innovation, including increased consumer checkout choice. While acquirers battle to maintain their share of a stormy market, Bill Farris of ACI Worldwide sees blue skies ahead.
Cloud was the lifeline that allowed businesses to survive the shock of the COVID-19 pandemic, facilitating homeworking, video conferencing, collaboration and the rapid scaling of IT systems. And now, as tremors in the global supply chain make further disruption seemingly an ongoing fact of life, payments will continue to grow and develop on Cloud infrastructure, says Bill Farris of payments solutions software provider ACI Worldwide.
Harris, who heads ACI Worldwide’s acquiring product line, gives an example of the societal behaviour changes Cloud is helping to facilitate.
“Let me use restaurant takeout as a stress-testing example,” he says. “Five years ago, it was probably pretty common for me, when I was getting takeout for the family for dinner, to show up at a restaurant, order from their menu, pay by card, through a terminal, wait for my food, then bring it home. These days, I’m ordering through a mobile app, on the restaurant’s website. I might be calling them and giving my credit card number over the phone, and, when I show up, I’m just picking up my food and leaving.
“So, a lot of different use cases have changed, including the flow of how merchants are taking both the order and the payment from their customers, and these changes are going to stay with us long term.”
Much has been written about the changes in consumer behaviour that pandemic lockdowns ushered in, but they also affected corporate thinking. COVID proved that Cloud solutions were both resilient and stable, and could provide a platform for continued innovation. And Farris adds that the rapid shift in consumer expectations prompted by the pandemic, is also impacting on roles in the payments delivery chain.
“Resilience and stability are must-haves, so Cloud services are critical infrastructure for banks, acquirers and merchants,” he says. “But agility is also now a key factor, because acquirers are creating new payment experiences for customers to react to our fast-changing environment. And, without agility, it’s very difficult to deliver these experiences as quickly as the market wants them. Cloud transformation makes all of that a lot easier; if done well, you can minimise the resources needed to deliver these new experiences.”
And this is prompting additional Cloud investment across the financial services industry. A recent survey by global technology and management consultancy, Capco, and global IT, consulting and business process services company Wipro, called Cloud’s Transformation Of Financial Services, discovered that increased future revenues (62 per cent) and improved future profitability (52 per cent) are key drivers of Cloud deployment.
The report re-examined financial services data collected by Wipro for its 2021 global survey Making Business Thrive: A Cloud Leader Roadmap for Achieving 10x ROI among C-suite executives representing banking, insurance and capital markets (including wealth advisory and asset management), to identify key trends and opportunities ahead, and shared insights about how financial services businesses can become Cloud leaders.
One recent example of an individual firm engaging in such investment, is Allied Irish Bank (AIB). One of the country’s big four, it recently announced a €65million deal with IBM to build on the bank’s existing Cloud capabilities using IBM’s next-generation z15 platform, which promises better security and resilience to manage both traditional operations and new digital services.
Managing the surge
ACI is a giant of the real-time payments world and handles upwards of 225 billion consumer transactions each year for players like this. Its Fast Start Acquiring pledge is geared towards helping providers keep up with the increasing competition in this space by providing them with super-fast technical certification, using a Cloud platform hosted by Microsoft Azure.
“We had clients that were on an eight-to-12-month cycle to stand up a new implementation, from contract signing to getting ready for payment scheme certification,” says Farris, “and we were able to compress that down to less than 100 days.
“An acquirer can use our Fast Start Acquiring programme as one of the vehicles to help them with their Cloud transformation journey, since it allows them to get to revenue sooner and reduce costs along the way.”
Farris says ACI witnessed a 300-per-cent increase in e-commerce in the UK during the first COVID lockdown, and spikes in demand have continued ever since.
“Supply chain shortages are driving spikes that are very sudden, and the environment and infrastructure that’s processing payments has to be ready to handle those spikes,” he explains. “For instance, if you’ve tried to buy a video games system recently, you’ll know that both the major suppliers launched new platforms 18 months ago, but retailers still don’t have stock. When a retailer does get in a limited supply, it sells out in seconds, compared to normal transaction pattern. So, being in a Cloud environment that allows for rapid acceleration of capacity, is critical for them.“
Payments systems need to handle spikes such as ticket sales for an event, or the launch of a hot product, but then there are the traditional retail surges such as Black Friday, Cyber Monday, Singles Day in China and Amazon Prime Day, which are more predictable examples of the need for flexibility.
“These demand spikes are continuing to evolve and grow,” says Farris. “When we looked at our data after Prime Day in 2021, for example, we saw an 18 per cent increase on the previous year.
“With activity spikes such as Black Friday, you can see a point on the horizon, you know when it’s coming. But there are so many other events where you might have less than 24 hours’ notice to respond. “The Cloud provides the underpinning infrastructure that makes it more efficient, and easier to scale to meet these demands.”
However, Farris adds a note of caution, urging organisations to take steps to maximise the benefits of a Cloud migration and not simply replicate what was already there: “If you’re taking a legacy application and infrastructure, and migrating that to the Cloud, the data’s not going to look the same when you implement it in a Cloud service,” he says. “You frequently have to take legacy applications and decompose them into microservices, or smaller, more agile pieces of code. If you’re going to plan a Cloud transformation, it shouldn’t just be about shifting what already exists in your legacy application up into the Cloud – you should have a roadmap for new functionality.
“On a practical level, an evaluation of the people you have currently working on your legacy application is also important. Do you have the right skillsets in the team? Do you need to augment them? Do you need to retrain, and spend some time with, the people involved?
“Dealing with all of those points, in a plan, sets you up for some success, because, if you’re not getting more from your Cloud-enabled solution, then you’re losing an opportunity.”
And there is one further trend that Farris highlights as having been made possible by Cloud services. More and more merchants are using multiple acquirers to process payments, again increasing competition – particularly for legacy providers now fighting to keep pace with new fintech solutions.
Farris says: “They’re doing it for several reasons. One is resilience if an acquirer goes down, another is to improve access to alternative payment methods. Increasing sales is a third area of benefit because merchants see increased conversion rates from online sales. Sometimes by running an authorisation from one acquirer to another, merchants can optimise acceptance rates.
“The merchants have spoken: using multiple acquirers is important to them. And most acquirers will want to be part of that solution.”
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