Arnaud Crouzet, General Secretary of nexo standards talks about how the lack of interoperability in today’s complex global payments acceptance world is hindering merchants’ plans for international expansion.
As technologies evolve to offer evermore payment options for consumers and globalisation continues at a rapid rate, it is inevitable that merchants want to take advantage of these business opportunities and expand their offerings into new international markets.
Before merchants can even begin to think about growing their business internationally, they need to put a strategy in place to overcome the challenges presented by the fragmented payments ecosystem. Ensuring that their payment acceptance systems harmonise across borders and deliver the kind of seamless interoperability that they need to expand quickly into new territories is key to a merchant’s global success. These challenges include:
- Navigating individual country’s domestic payment regulations and protocols.
- Managing costs in an environment where negotiating volume-based deals are not possible due to the lack of cross-border interoperability.
- Coordinating the operational and technical headache of managing payments acceptance integration across multiple territories.
- Managing domestic legacy system updates are inhibiting innovative payment solutions from being quickly and easily rolled out in multiple geographies.
- Creating a consistent user experience at the point of interaction between multiple payment types, and crucially, across borders too.
- Relieving the pain of system integration when establishing a relationship with new acquiring banks.
- Working with acquirers to ensure the whole acceptance process better serves their international ambitions, today and in the future.
Interoperability and global payments acceptance standardisation are critical to breaking down these barriers and enabling merchants together with vendors, processors and other payment service providers, from operating efficiently on an international scale.
Introducing nexo standards
nexo standards is an international association that develops messaging protocols and specifications, which adhere to ISO 20022 standards. The messaging protocols and specifications enable fast, interoperable and borderless payments acceptance by standardising the exchange of payment acceptance data between merchants, acquirers, payment service providers and other payment stakeholders.
The nexo suite of messaging protocols and specifications cover the full spectrum of card payment acceptance standardisation, from the acquirer to the terminal to the retailer; they provide the strategic building blocks for payment stakeholders to develop seamless and globally interoperable payment infrastructures:
- nexo Fast Specification – based on EMV® chip and PIN technology and describes unambiguously how to develop a financial payment application on a terminal which is compliant to the SEPA Cards Framework of the European Payments Council.
- nexo Acquirer Protocol – allows the use of real time or batch submissions as well as supporting direct connections from merchant to acquirer or via a payment service provider intermediary.
- nexo Retailer Protocol – defines a set of interfaces between a card payment application and a retail point of sale system.
- nexo TMS Protocol – provides an interface between a terminal management system (TMS) and a payment system. It supports the functions for configuring, managing and maintaining the application parameters, the software and the security keys of a payment system.
- nexo Implementation Specification – explains how to integrate the nexo messaging protocols and specifications with a compliant nexo FAST payment application.
Adopting international payment standards, such as those developed by nexo standards, offers widespread benefits to merchants including: more rapid expansion into new territories, the ability to develop consistent global consumer products and experience significant cost saving through negotiating better volume-based deals with vendors. Standards also provide the unique opportunity for merchants to take on new roles within the payment ecosystem and take charge of their own payment processing requirements. This was the case for leading retailer, Carrefour Group, which took the decision to become its own acceptor and acquirer, and, thanks to integrating nexo’s standards into its payments strategy, it was able to realise significant cost and operational efficiencies.
Are these merchant benefits to the detriment of other payment stakeholders?
While the benefits to merchants are clear, what might perhaps not be so clear, is how integrating international payment standards benefit other payment stakeholders such as terminal vendors or acquirers. If merchants are negotiating better volume-based deals, does this mean other players end up missing out? Not at all…
‘Customer centricity’ are the watch words here. Sure, innovation and a fairer playing field are defining factors of any open, standardised market but, with nexo, every stakeholder in the card payment acceptance chain has the ability to serve their customer better. Vendors are empowered to expand their offering internationally; once a deal is struck with a merchant, this opens the doors for the vendor to not only support a merchants’ needs in Europe for example, but also support the merchant as it ‘goes global’, creating bigger and wider business opportunities for the vendor as well.
The same goes for acquirers. nexo’s protocols facilitate fast, simple and borderless integration with other nexo-compliant payments stakeholders. In turn, this lays the foundations for acquirers to form partnerships with new merchants and vendors on a truly global scale, reducing time-to-market and increasing confidence in these new partnerships.
The messaging protocols and specifications from nexo standards offer huge potential to deliver greater operational efficiency and meet a variety of core business challenges that, when overcome, enable all payments industry stakeholders to get ahead of the competition in both domestic and international markets.
About the author
Mr Crouzet was elected General Secretary of nexo Standards in 2015. Within this role, Mr Crouzet oversees the activities of the nexo Board, Technical Steering Committee and technical working groups. He also manages the association’s membership, which comprises representatives from the payment acceptance ecosystem.
Mr Crouzet also serves as Global Head of Payments Means at Auchan Group.
About nexo standards
nexo is an open, global association dedicated to removing the barriers present in today’s fragmented global card payment acceptance ecosystem. nexo has been the very first organisation to design and develop card payment messages based on ISO 20022. The delivery of universal standard and protocols messages ensure the interoperability of different equipment and payment systems, internationally. Headquartered in Brussels, its members represent the full spectrum of card payments stakeholders, including acceptors, processors, card schemes, payment service providers and vendors. nexo standards was established in 2014.