EMScard: From Credit Card Acquiring To Omnichannel PSP
PaymentGenes sat down with Hugo Bottelier, Director of Product and Marketing at EMS, the Dutch card acquirer turned Omnichannel PSP. Hugo shared with us his view on various industry developments and about the recent developments at EMS.
In the past year you have undergone a major reorganization and started offering not only acquiring services, but also POS terminals and PSP services. What impact did this have on your business?
ABN AMRO (AAB) became a 49% shareholder and a Joint Venture partner in EMS in late 2015, joining First Data with the remaining 51%. AAB’s motivation for a share in EMS was founded on the merits of being in a better position to serve the ongoing needs of their clients with respect to payment services across channels, omnichannel. AAB joining forces with First Data triggered the start of an extensive transition phase for EMS. From the onset, it was agreed that EMS would expand its proposition from being primarily a credit card acquirer to becoming an omnichannel payment services provider. To that end, 2016 has been about building new capabilities while keeping a focus on running an existing business and serving our clients well. As an analogy, during 2016 we have been flying an airplane and while inflight we have upgraded from 2 to 4 engines and changed our shell from that of a Boeing 737 to a 747. Our existing clients meanwhile, have been enjoying the extended inflight entertainment and meal service.
What have been your focus points this past year?
Building new capabilities, hiring for our talent needs, defining the longer term ambitions and requirements for the organization and developing a plan for how to achieve those objectives.
What is your vision on the payment landscape for 2017?
Consolidation, simplification and omnichannel. Taking each in turn: On consolidation – there are many players in the market offering payment services and the barrier to entry, particularly for e-commerce, is low. Survival of the fittest is going to become important and we believe that participants will increasingly have to choose between going for scale or niche to create sustainable business models. Simplification – Many merchants with a broader footprint support a myriad of solutions from different providers. Legacy single country solutions which were built because there was no or limited alternatives is getting a make-over. “Spaghetti” solutions with a messy sauce demand significant resource to maintain from a contractual, IT, cost and reconciliation perspective. We note an increased interest from the market towards solutions that can simplify the spaghetti and bring both consumer and business benefits. Omnichannel – this term best summarises consolidation and simplification combined. The ability for a merchant to offer the consumer a seamless shopping experience across platforms and channels. Consumers already blend the virtual with the real in their shopping behavior. The better a merchant is at catering to how consumers want to engage, the stronger the affinity with those merchants that deliver on those expectations.
What are the top three challenges for EMS?
- Meeting our talent needs as we grow
- Leveraging as quickly as possible the strengths and potential of our shareholders
- Balancing the needs of running an ongoing business and at the same time realizing the potential of the market reach through AAB.
How much has the payments industry changed since you started?
The changes since starting in the Payments Industry 27 years ago are as difficult to describe as thinking of a world without mobile phones. Technology has been the key enabler towards new products, services, business models, and players in the value chain. With new capabilities that technology is making possible, I see the biggest challenge to be the deployment to merchants and consumers. What gets overlooked when deciding to embrace new technology is the time and effort it takes to implement technology (including software) or a change in behavior, or both.
What possibilities do you see originating from PSD2 for your business model?
Together with our shareholders we have been reviewing the opportunities that PSDII will enable for in support of the growth objectives for EMS. At this moment we can disclose that we are developing scenarios to test. It will be important to remain engaged through test and learn cycles before we solidify on our course of action.
What benefits did the regulatory changes bring to merchants / consumers? The MIF cap has created a more level playing field for merchants but whether or not they will share or pass on to consumers any benefits that they derive remains to be seen. For PSDII, whilst we in the payments industry get excited about the new possibilities that this will bring, the majority of consumers and all but the very large merchants are largely oblivious as to the changes and benefits that PSDII could bring. Many examples of use cases bringing benefits to consumers have already been scripted which leverage what PSDII makes possible. The next phase is to test and learn, letting market forces help define winners.
What are the focus points for EMS in the next five years and how is EMS preparing itself?
Meeting the needs and expectations of our clients stands central to what we do at EMS. If we can support our clients in their success, that will translate to our own success. Over the next five years it is our ambition to become the largest omnichannel provider in Belgium and the Netherlands, and a proven player across Europe. EMS has the all the right ingredients and together with our shareholders, we will achieve that ambition and more.