Position paper
Payment has always been an important part of the consumer journey in retail. The Nordics are on the path towards a cashless society, where regulation and new technology drives the pace of the change. But as complexity increases, and new players and innovation thrives, retailers are forced to take a stronger grasp on the surrounding partners to enhance the competitive edge of retail experiences.
Upcoming Events
ons. 07. feb.Solli Plass07. feb. 2024, 09:00 – 16:00Solli Plass, Henrik Ibsens gate 90, 0255 Oslo, Norway
ons. 15. feb.Hotel At Six15. feb. 2023, 13:00 – 16:00Hotel At Six , Brunkebergstorg 6, 111 51 Stockholm, Sverige15. feb. 2023, 13:00 – 16:00Hotel At Six , Brunkebergstorg 6, 111 51 Stockholm, SverigePayment has always been an important part of the consumer journey in retail. During the era of digitization, where shopping related tasks are being included in the digital consumer journey, the complexity increases and we as retailers must take a stronger grip on the surrounding partners.
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Upcoming Events
- ons. 07. feb.Solli Plass07. feb. 2024, 09:00 – 16:00Solli Plass, Henrik Ibsens gate 90, 0255 Oslo, Norway
- ons. 15. feb.Hotel At Six15. feb. 2023, 13:00 – 16:00Hotel At Six , Brunkebergstorg 6, 111 51 Stockholm, Sverige15. feb. 2023, 13:00 – 16:00Hotel At Six , Brunkebergstorg 6, 111 51 Stockholm, SverigePayment has always been an important part of the consumer journey in retail. During the era of digitization, where shopping related tasks are being included in the digital consumer journey, the complexity increases and we as retailers must take a stronger grip on the surrounding partners.
Cost-of-payment campaign
Within the Nordic Initiative community, there's a growing acknowledgment of not only an increase of cost as such but also an increasing complexity of cost components within both domestic and global card schemes.
This complexity makes it hard for retailers to conduct effective comparisons of vendor offers and creates barriers for increased competition amongst providers.
The Nordic Initiative community voices its concern over the escalating cost and complexity of payments imposed by global schemes. Despite dedicated efforts in bilateral negotiations and political channels, the response has fallen short of expectations. The estimated annual cost overrun exceeds 100 million EUR, underscoring the urgency of addressing this issue.
As European Union regulators intensify their endeavors to infuse more competition into the payment landscape, we witness the emergence of new and evolving business models. The current interchange model is deemed outdated, resulting in costs that disproportionately increase in relation to the goods and services transacted within the retail community.
Nordic Initiative approach
By request of the retail community, the Nordic Initiative is extending invitations to participants for an inaugural meeting focused on validating facts, assessing risks, and defining collaborative objectives. This meeting sets the foundation for a strategic and actionable plan that unites efforts toward common goals.
One approach would be to develop a framework for comparing payment scheme business models from a retail perspective to be used as a tool for retailers.
Another would be to invite retail representatives from other regions who have relevant experience in campaigning against international schemes, and let them share their experience and lessons learned.
Limitations
Every year we facilitate billions of payment transactions and interact frequently with more customers than any other sector. This makes us by far the biggest users of payment solutions and the most important interface towards the customers. Still it is our joint experience that existing payment solutions do not support our need for providing seamless, effective and cheap services to our customers.
Billions
of payment transactions
Millions
of customers
Ineffective
Payment solutions
Halting
The customer journey
We write this paper as a call to action and an invitation to dialogue with: banks, card schemes and solution providers, other retailers that have identified the same challenge as us, regulators who want our input and innovative newcomers wanting to help!
Views on a good payment solution
No lock-in
The market must work, with no lock-in effects (different standards or other barriers that make it difficult to change vendors)
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Support different payment scenarios
Variable recurring payments. Flexible risk based payments. Different use cases not limited toPay first, buy later (Petrol), Hospitality, ecommerce, In-store, Subscription, in-app.
Purpose: Better fit for applying appropriate services to different retail scenarios
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The retailers should be in control of the orchestration of customer dialogues.
Payment providers must allow the retailer to be in control of the client relationship and the transaction data generated in the retail channel.
Purpose: Ensure all embedded service offerings are aligned with the retail brand
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Contextual authentication with the ability to be leveled up when required
The retailer needs an effective way to identify the customer. The quality of ID should be based on the situation the payment is being made, e.g. regular, small, on the run payments (buying a coffee) would require less quality of the ID than large, one-time purchases (buying a TV).
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Standardized, rich and effective APIs
APIs must support customer centric retail experience across different channels. API providers should adhere to industry standards and market best practices catered by independent
Purpose: Predictable time to market for new and changed capabilities
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Low, predictable and simple fees
The payment solutions should be cost effective across the total cost of the value chain. Leveled to actual and measurable risks. Not proportional to the amount of a basket.
Purpose: Prioritization of preferred services
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Real time clearing and settlement
The money must be on the retailer's account at the time of the transaction.
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Scheme fees
The card schemes need to lower their fees on in-store payment to reflect the low risk of the transaction
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