EXCLUSIVE: “The Payments Collection” – Alex Benjamin, Aevi in ‘The Paytech Magazine’

With so many payment methods now available, the need has never been greater for merchants to offer flexibility. Alex Benjamin from Aevi explores how it all comes together

The way people make payments is changing. Slowly but surely.

Card use is eclipsing cash and digital wallets are beginning to take up more space in that pie. According to a Forbes Advisor report, 70 per cent of individuals in the US report cards as their go-to method of payment. Seventy-six per cent expressed a preference for businesses that accept card payments whilst cash remains the predominant choice for lower-income earners.

In the UK, 75 per cent of consumers use cards at least five times per month, compared with a global average of 64per cent, according to the government’s Future of Payments review. According to a Juniper Research study, the value of contactless payment transactions around the world will grow by 113 per cent over the next five years, from $7.4trillion in 2024.

As for digital wallets, only seven per cent of US respondents claimed to use them currently, but that number is growing. Globally, wallets are projected to account for more than $25trillion in global transaction value (49 per cent) across e-commerce and POS, by 2027. That’s according to a Worldpay report which also predicted that by 2027, digital wallets will take up half of all e-commerce spend in the UK, worth £203.5billion.

When it comes to point-of-sale, usage would almost double, rising from the current rate of 14 per cent to 29 per cent of transaction value over the next three years. The general trends appear to show an insurgence towards card payments over cash at in-person POS and an increasing use of digital wallets over cards in e-commerce.

But no one method wins out and it will be a long time before cash is completely out of the equation.

Even longer still (maybe never) before people ditch cards completely in favour of universal digital wallet use. There is still very much a mix of payment habits that need to be accounted for.

That is why POS terminals and payments acceptance technology is increasingly geared towards flexibility and it’s a need that providers like Aevi are meeting with their hybrid offerings. An in-person payment orchestrator, it goes beyond simply providing hardware or a plug-in API but actually provides the means for merchants to be flexible in how they accept and process payments. Alex Benjamin, its head of global business development, is fully aware that “consumers are adopting alternative ways to pay, whether it’s alternative digital banking or payment apps like Venmo.

“Outside of the traditional schemes, consumers are driving the adoption of different technologies in-store and online based on their preferences, which is great for the industry itself because it’s finally driving the innovation that is needed – i.e. a software first approach versus hardware first.”

He’s building Aevi’s approach to market in the US and seizing the opportunity of changing habits, even in a landscape as traditional as America.

“Shifts in the market are pushing payment providers to adapt to these changes and provide the ability to accept payments in a consumer-preferred way, which ultimately, will be a net positive for both the solution provider and consumers,” he says.

The convenience and ease of use of services like Venmo are making them increasingly popular and fast becoming a default for many digital natives. According to recent data from eMarketer, it’s now estimated that there are at least 68.3 million Venmo users in the US. That’s testament to how mainstream it has become.

Whatever the individual’s preferred method, the goal for the merchant is increasingly about providing a seamless experience, not just to offer better customer service but also because it presents an opportunity to better understand their customers and drive more business through data.

“In-person payments are a huge part of the card volume market today,” says Benjamin. “Accepting them provides the opportunity to diversify your revenue streams but there’s also the increased potential to build value for your customers by having more data and insights on their payment behaviour. This data can be used for a number of things within the retail market like building out loyalty programs, personalising the shopper experience or even optimising interchange on the merchant side.”

A greater understanding of consumer preferences is understandably of great value to many businesses and could help them shape future offerings more quickly. Benjamin also points out how “data on cash flows can help to build a more secure, resilient proposition and sell value-added services.”

“Understanding these different verticals allows you to get closer to delivering an optimal in-person payments experience.”

“Accepting in-person payments provides the opportunity to diversify your revenue streams and build value for customers”

“You can also expand into different markets by having integrated offerings in the offline world that allow you to extend your proposition through different distribution channels and ISV partners that are essentially the layer in front of the merchant-facing solution. And that is a huge opportunity for payment providers today.”

The important thing for crafting a seamless in-person payments experience wherever the business is, lies in connecting the online with the offline. Typically payments have been quite fragmented and merchants have relied on an array of providers to tackle different parts of their business, adding extra costs and complexity Benjamin highlights the understandable focus that some have on one side of the business.

“There’s a lot of payment providers out there that can do e-commerce but the world of in-person payments introduces a lot of complexities around hardware, EMV certifications and more,” he says. “It’s still a very legacy-based sector where it’s difficult to connect in-person payments with online payments. When this happens it should allow merchants to see a 360-degree view of the transactions that are coming through.”

As a result, this has the potential to impact servicing, support, cross-channel refunds, recurring subscriptions and more; many things that customers take for granted at some of their most favoured brands and vendors, but which are ultimately the result of interconnectivity between the various players involved in the value chain.

For this seamless connectivity to take place technology is needed in between, including the payment application, software on the payment devices, and also a gateway. For Aevi, this is done through APIs or connections to third-party tokenisation vaults. All those components equal a seamless omnichannel proposition, and that allows payment providers to offer a complete solution to their end merchants.”

APIs are increasingly the preferred way of streamlining the integration of different platforms and it’s also where AI may be able to play a role in the process.

Benjamin says: “We have an API that allows the customer to be onboarded for our payment partners, which is then automatically provisioned through our gateway, in addition to an endpoint and transaction event-based API.

“The automation enhances our proposition for both sides, creating operational efficiencies for the payment providers and a better end solution for its customers.”

Paying in the US

The enduring relevance of in-person payments is felt in the US as much as anywhere else.

“The US market is unique in the sense that it’s such a large addressable market but innovation has been slow in some aspects of the in-person payments space because there wasn’t demand. Connectivity and traditional schemes were enough to succeed,” says Benjamin.

Of course, there’s the sheer number of transactions taking place but you only have to look at the success of Venmo to see that there is a demand for more seamless consumer payment options. The explosive growth of neobank Chime in the US, along with other challengers not too far behind, shows that the appetite for a wider range of financial services vendors is only going to grow.

This variety needs to be catered for and this is where Aevi see themselves fitting in. As far as payments are concerned, Benjamin actually feels that “some of the complexities in the States are frankly not on the level of what you find in the European market” given the regulatory burdens that companies have to go through.

With advancements in real-time payments (RTP) and the adoption of ISO 20022 there are real shifts taking place in payments modernisation, to catch up to where other regions have already gone. Aevi benefits from having already dealt with that in their native Europe and can take their learnings into this new market.

“For US customers, we’re helping them expand globally, build in-person payments functionality within their platforms and enable an integrated omnichannel solution,” Benjamin adds. “We’re continuing to partner with solution providers that complement our offering and want to help larger businesses begin taking their tech stack in-house versus using a bunch of third-party vendors.

This article was published in The Paytech Magazine Issue 15, Page 32-33