EXCLUSIVE: “Shaping The Future of Payments” – Giesecke+Devrient and Netcetera in ‘The Fintech Magazine’
As a global security technology group, Giesecke+Devrient (G+D) is renowned for orchestrating seamless physical and digital customer payments journeys.Its groundbreaking work on public currencies, cards and issuance, digital payment solutions and, most recently, around designing central bank digital currencies (CBDCs), are just some examples of how it’s not only shaped today‘s financial landscape but is also helping the payments industry prepare for that of tomorrow.
Recently, it’s taken a majority stake in Netcetera, a leading provider of secure digital payments, with whom G+D has worked as a key partner for several years. Together they are doubling down on G+D’s broad mission to ‘engineer the trust to secure the essential values of the world’.
The two companies’ objectives are complementary: G+D’s core value is to create confidence and to protect payments in the physical and digital worlds. Netcetera is dedicated to creating digital trust and value with a comprehensive portfolio of solutions.
Together, they offer both plug and play and tailor-made products for clients’ specific needs. Both are responding to an evolving and complex matrix of customer demands, not just to ensure payments are secure and convenient across every channel and device, but that they are also mindful of ecological costs to the planet and genuinely accessible to everyone on it.
“Payment has become a massively adopted everyday experience: whether online, on a smart device, or in-store, consumers expect a flawless experience where services are designed around their core needs,” says Carsten Wengel, CEO of Netcetera. “The payment ecosystem faces the challenge of offering an intuitive, scalable, and secure customer experience while creating confidence in the designed payment solutions.
“G+D has more than 170 years of passion for currencies and payments, delivering solutions to the financial services industry, ranging from banks to fintechs, around the globe, while digitally born Netcetera has software-based innovation built right at the heart of its business.
“Collectively, G+D and Netcetera are the perfect match of innovation and trusted expertise.”
“Our goal is to work with stakeholders across the industry to create solutions that ensure no one is left behind in the payment journey
With Netcetera, G+D can offer an expanded set of solutions to further optimise e-commerce payments as well as elevate customer experience for digital payments and banking. The companies’ combined development capabilities will, they say, accelerate innovation, creating a powerful force as ‘global partners supporting local flavours in the payments world‘. Netcetera has already announced that it will be making a multi-million investment in its international digital banking offering, the benefits of which will extend to G+D’s 500-plus banking clients.
While banks might still – for now, at least – be customers’ chosen partner of trust when it comes to making life’s big financial decisions, many have lost ground to fintechs in the personalisation of services, innovative user experience, and in providing frictionless day-to-day banking. Omnipresent Big Techs, meanwhile, with their big brands and big budgets, are encroaching into payments and disintermediating banks’ relationship with customers.
Alipay, PayPal and Apple Pay. taken together, are now the leading payment method globally, taking a 49 per cent share of e-commerce transactions, and 32 per cent of point of sale transactions, according to the FIS Global Payments Report 2023. Rather than simply presenting account holders with a menu of conventional banking services, G+D and Netcetera’s solutions are designed to help banks build offerings around their customers’ core needs while also allowing them to be fully personalised to consumers’ individual lifestyles and requirements.
How does that work? Well, a digital-first consumer journey could start with issuing a virtual card, to be used immediately while the customer waits for the physical card to be mailed. That virtual card can unlock a diverse range of added-value digital solutions that enable payments with effortless authentication, all of which exist alongside the consumer’s traditional physical banking journeys.
“Collectively, G+D and Netcetera are the perfect match of innovation and trusted expertise in this fast-paced world, enabling safer, more convenient, more sustainable, and more accessible payments for everyone”
While that helps banks maintain their current position in the payments firmament, there is another vacancy in the digital ecosystem that they’re more than qualified to fill. And that’s as a custodian of what is arguably customers’ most valuable and most vulnerable asset: their digital ID. By leveraging the trust they still hold and their unique access to customers’ financial and personal information, banks could be a one-stop shop for authentication within the transaction process – be that age verification for restricted purchases, assessment for insurance or a loan, or even paying their taxes.
For consumers, using the bank for verification is reassuring, because data does not leave their bank’s domain, while it greatly accelerates their transaction process. On another level, payments are also increasingly being seen as a way to strengthen a bank’s brand by demonstrating its actions on issues that matter – including tackling environmental challenges and addressing social inclusion.
G+D and Netcetera are addressing all these inflection points for banks by focussing their efforts on four key areas: redefining trust and customer experience in e-commerce; supporting the phygital finance revolution; providing authentic eco-solutions; and making payments easier and accessible for all.
REDEFINING TRUST AND CUSTOMER EXPERIENCE IN E-COMMERCE
In 2022, worldwide e-commerce accounted for more than a fifth of overall retail sales, exceeding $5trillion for the first time, with the vast majority (almost 61 per cent) of those sales conducted over mobile. By 2025, it’s forecast that a quarter of all spending will be online. But the e-commerce ecosystem is facing a multitude of challenges in its day-to-day operations – from supporting a plethora of new payment methods and increased ecological awareness to navigating through fraud, data security, and payment processing. The act of payment is clearly the most vital concern for e-merchants and improving the customer experience is the top reason they add new payment methods, according to the Merchant Risk Council.
And yet paying online is still one of the most significant friction points for customers: a trusted one-click checkout is still a long way from being the everyday experience. Merchants continue to lose a quarter of all online sales because shoppers are confused or frustrated by the checkout process. That friction is more often than not caused by a clunky authentication experience. And yet secure authentication is essential to protect both the customer and the business from historic levels of fraud that sapped US $41billion out of the e-commerce market worldwide between 2020-2023.
“The continuous growth in e-commerce fuels the importance of best-in-class user experience and the highest compliance to security in all façades of digital payment”
Those losses were compounded by false positive declines. Online shoppers’ expectations leave no room for a poor payment experience anywhere on the journey, not just at the checkout, of course.
G+D and Netcetera believe that the way to success for merchants is to improve all aspects of the customer journey, says Peter Frick, managing director of secure digital payments at Netcetera.
“The continuous growth in e-commerce fuels the importance of best-in-class user experience and the highest compliance to security in all façades of digital payment,“ says Frick. “We strongly believe that both of these aspects are not yet available to consumers and businesses in everyday life, nor have we reached a level where fraud is cornered or even contained in our industry. That is why Netcetera and G+D, put their combined strengths at our customers’ and partners’ disposal.”
Netcetera covers the full spectrum of the digital payments industry, providing end-to-end solutions for issuers, acquirers, merchants and PSPs. With G+D, it’s committed to improving every aspect of the customer journey and addressing the biggest challengers that providers face – from enabling e-commerce transactions without exchanging vital account information, to providing a seamless checkout experience and everything in between. By enabling the e-commerce ecosystem to build a superior experience for their customers they can, in the process, enhance those business’s success.
SUPPORTING THE PHYGITAL PAYMENTS REVOLUTION
“It’s about being open and creative, putting the customer at the centre of every activity and recognising their needs before they arise. The focus is not on blindly chasing every trend, but on keeping a finger on the pulse
G+D is one of the few payment technology providers covering both the virtual and physical worlds of payments. That gives it a unique perspective when it comes to reconciling the need to maintain physical as well as digital touchpoints and services – a duality that’s likely to exist for several years yet, as evidenced by the most recent Global Data Banking Survey. It found that 80 per cent of neobanks acknowledge that a physical presence is important – it’s why the majority continue to offer customers the choice of a physical card as well as a digital wallet and why many invest in human call handlers to help customers with more complex issues.
Meanwhile, both neo and incumbent banks are, at the same time, investing in the valuable data that can be collected via digital channels. For Mehdi Heidari, head of product management digital issuance at G+D, phygital banking is the sweet spot between physical-only and online-only services. He believes it is the best way of creating a personalised customer experience.
“Customers’ lives already blend the physical and digital almost everywhere they go. From entertainment to transportation, smart digital services enhance, elevate, and personalise these experiences. Payment and banking solutions are no different,” he says.
Phygital services must be omnichannel – offering a seamless, consistent experience as the customer switches between branch visits and phone app, laptop and letterbox – believes Heidari. And the payment card can act as the key to that new way of interacting as the customer’s physical and digital worlds converge.
“We envision a future where the entire industry adopts truly sustainable practices, making a significant and positive impact on our environment
“The payment card is a tangible symbol of the trusting connection between the bank and the customer,” says Heidari. “At the same time, it represents the entry ticket to the digital world by giving consumers access to a vast network of services and applications – tailored, individualised messaging, with print materials enhanced with cutting-edge alternative reality and video solutions; customer-generated payment card designs made available in digital formats instantly; and even unmanned, instant-print card kiosks.”
G+D and Netcetera can help implement all these and more, says Heidari. “It’s about being open and creative, putting the customer at the centre of every activity and recognising their needs before they arise,” he adds. “The focus is not on blindly chasing every trend, but on keeping a finger on the pulse.”
DRIVING SUSTAINABILITY WITH AUTHENTIC ECO-INNOVATION
With sustainability rising up the banking industry’s agenda, how we pay goes beyond just a technological choice. “As a society, we have a responsibility to create a more sustainable future,” says Chitua Kalio, global head of client services in the Card & Digital Payment business of G+D.
“The payment industry is stepping up to the challenge, leading the way toward a more eco-conscious payment landscape.
“By embracing these environmentally friendly business methods, banks and financial institutions can play a crucial role in influencing society’s sustainability journey and minimise the damage we leave behind.”
G+D has worked towards that goal since 2010, when it signed the United Nations Global Compact – a declaration of intent by commercial companies to adopt sustainable and socially responsible governance policies.
“As we move towards a more digital and diverse society, payment methods must be easy, convenient and secure for everyone”
It has made huge progress since – both on an individual corporate level and in putting the payments industry on a more sustainable footing. G+D has set transparent and clearly formulated targets, in line with the principles of the UN’s Sustainable Development Goals, and recently raised its own carbon neutrality target, committing to reduce its Scope 1, 2, and 3 emissions and thus achieve net zero across the group.
In 2021, G+D initiated its first partnership with a new breed of eco-innovator in the payments space, Doconomy. More recently, Patch was made part of an expanding G+D ecosystem of environmentally-focussed fintechs that are offering end-to-end eco-payments solutions that support G+D’s clients in their own sustainability commitments. They provide tools that can be embedded in banking and payment apps to track and measure consumers’ carbon emissions through their payments activity and encourage them to have a more sustainable lifestyle or offset their CO2 footprint
Recognising that the eco-card is a symbol of change with a potentially powerful multiplier effect in the hands of the user, the company became the first in the payments card industry to pledge the elimination of virgin plastic in all its payment card bodies by 2030. Its Convego® Beyond card bodies already consist of 100 per cent recycled or compostable plastic, including a card body made entirely from plant-based materials. All this has required a true, cross-industry effort.
“We envision a future where the entire industry adopts truly sustainable practices, making a significant and positive impact on our environment,” says Kalio. “[We want to] embark on an authentic transformation together and lay the foundation for a better, greener tomorrow.”
MAKING PAYMENTS EASIERAND ACCESSIBLE FOR ALL
Alongside environmental sustainability, social responsibility is deeply ingrained into the foundational ethos of G+D. While it might not generate as many headlines as climate initiatives, tailoring services to meet the needs of an increasingly older population and improving the user experience for those living with impairments are equally vital.
According to UN, one in six people in the world will be over 65 by 2050, up from one in 11 in 2019, and life expectancy beyond 65 is set to increase by 19 years. These demographic shifts underline how important it is for socially responsible enterprises to meet the diverse needs of individuals.
“Payments are for all, aren’t they?,” says Gabrielle Bugat, CEO of G+D Mobile Security, heading the Card & Digital Payments business of G+D. “And, as we move towards a more digital and diverse society, payment methods must be easy, convenient, and secure for everyone. Technology has a critical role to play in fostering accessibility and inclusion.
“With a rapidly ageing population globally, a new demographic structure will drive new demands on different forms of payment methods or experiences. A card is still, however, the most-used, non-cash daily payment method worldwide and represents not only the physical bond between banks and customers, but also a strong branding statement for banks. G+D is supporting many of its clients in addressing the payment card issuance journey to make it easier for older people and those with visual impairments.
“Giesecke+Devrient became the first in the payments card industry to pledge the elimination of virgin plastic in all its payment card bodies by 2030”
Solutions have also been extended to the onboarding experience. By scanning a large QR code on the letter that accompanies a card, users can hear instructions on how to activate their card, obtain a PIN, and find out about the rewards and benefits associated with the card programme, with preferred language, layout or colour settings for greater accessibility.
The digital onboarding of vital services is also being enhanced. By identifying themselves via a secure ID process and facial biometrics, users don’t need to present themselves at a physical branch or get a notary public to confirm their identity. Meanwhile, Netcetera has launched the ToPay Senior wallet with design features that increase accessibility for any customer looking for a simpler mobile interface.
Solutions that support customers with impairments provide a starting point for extending banking services to a broader population who may not benefit equally from the advance of innovative payment technologies. So, designing with different groups of users in mind can actually improve the experience for everyone, believes Bugat.
“At G+D, we believe in leveraging technology to create reliable payment solutions that empower customers and enable accessibility for all individuals,” she says. “Our goal is to work with stakeholders across the industry to create solutions that bridge the gap and ensure that no one is left behind in the payment journey.”
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