How cloud orchestration will unlock payments

The pay­ments land­scape has evolved sig­nif­i­cant­ly in recent years, dri­ven by the demand­ing expec­ta­tions of younger con­sumers, increased com­pe­ti­tion and advances in tech­nol­o­gy. The Covid-19 pan­dem­ic has only served to ampli­fy the impact of all three of these cru­cial areas.

Mil­len­ni­al and Gen Z con­sumers instinc­tive­ly look for con­ve­nient, dig­i­tal-first pay­ment ser­vices acti­vat­ed through their phones. Reg­u­la­tion, as well as inno­v­a­tive tech­nolo­gies such as AI that auto­mate process­es and enable more seam­less authen­ti­ca­tion, have reduced the bar­ri­ers to entry for new pay­ments play­ers, which include big tech com­pa­nies, fin­techs and neo banks.

“Con­sumers expect omnichan­nel treat­ment and for com­pa­nies to recog­nise them across chan­nels,” says Mar­tin Her­ling­haus, senior man­ag­er mar­ket insights at AEVI, offer­ing a cloud-based pay­ments plat­form. “Mer­chants have increas­ing­ly sought new part­ners on this jour­ney to broad­en their mind­set and learn how to oper­ate in a dig­i­tal way. Small­er mer­chants espe­cial­ly want busi­ness enable­ment as a com­plete pack­age, and they need some­one to help them.”

Cloud tech­nol­o­gy has also been a pow­er­ful enabler and while banks, fin­tech firms, acquir­ers and pay­ment com­pa­nies have been on a jour­ney of accep­tance around areas includ­ing secu­ri­ty and com­pli­ance, there is now a high degree of con­fi­dence in such plat­forms. This has enabled organ­i­sa­tions to take advan­tage of the speed, elas­tic­i­ty and resilience of the cloud, which accel­er­ates the rate at which pay­ment prod­ucts and ser­vices can be brought to mar­ket and scaled glob­al­ly.

“In the old days, if I had to bring a new prod­uct to mar­ket I would have to ensure I had ade­quate infra­struc­ture, devel­op­ers to code on the infra­struc­ture and testers to test on the infra­struc­ture,” says Mark West­brook, senior vice-pres­i­dent of tech­nol­o­gy and gen­er­al man­ag­er UK at AEVI. “If you now build and run your appli­ca­tions cloud native, you can have a min­i­mum viable prod­uct oper­a­tional in a very short peri­od of time. With that, you can then see whether it is a viable mar­ket propo­si­tion and very quick­ly scale glob­al­ly.”

The pace of inno­va­tion on the dig­i­tal side has not been mir­rored on the in-per­son pay­ments side, how­ev­er, which is plagued by sys­temic chal­lenges. In-per­son pay­ments infra­struc­ture was effec­tive­ly devel­oped back in the 1950s when the first cred­it card was launched and then elec­tri­fied in the 1980s, but since then lit­tle has hap­pened by way of inno­va­tion.

Pay­ment ter­mi­nals designed as ana­logue data fortress­es now face chal­lenges in a dig­i­tal-first world, exac­er­bat­ed by inter­de­pen­den­cies between play­ers in the pay­ments ecosys­tem. The pay­ment ter­mi­nal is shipped by the acquir­er. The pay­ment ter­mi­nal provider has its own pay­ment app. A ser­vice provider then needs to inte­grate into that. It’s an inflex­i­ble process, espe­cial­ly when it comes to check­out and intro­duc­ing new pay­ment flows and mech­a­nisms.

“There are two ways to approach the chal­lenge,” says Her­ling­haus. “Either, like com­pa­nies such as Square, you devel­op your own ter­mi­nals, ser­vices and ser­vice envi­ron­ment, and cre­ate a closed ecosys­tem, which is cost­ly. Or you open up and invite all parts of the ecosys­tem to coop­er­ate in a solu­tion that ben­e­fits every­body, play­ing to their strengths and pro­mot­ing bet­ter col­lab­o­ra­tion.”

AEVI facil­i­tates that col­lab­o­ra­tion via cloud orches­tra­tion. Through open stan­dards and an open sys­tem, the cloud-based plat­form makes it far eas­i­er for all pay­ments play­ers, regard­less of whether they com­pete, to coop­er­ate in a pos­i­tive way and ulti­mate­ly cre­ate great dig­i­tal expe­ri­ences for mer­chants and con­sumers alike. Putting AEVI into the pay­ment flow and join­ing data and secu­ri­ty across all chan­nels, helps to cre­ate a sin­gle uni­fied com­merce envi­ron­ment.

“Digi­ti­sa­tion and the increas­ing flex­i­bil­i­ty of process­es, as well as the grow­ing val­ue of data, are the future of pay­ments,” Her­ling­haus says. “We already have far more dig­i­tal­ly savvy con­sumers, while mer­chants are increas­ing­ly engaged with dig­i­tal tech­nol­o­gy — you will see them embrac­ing data and play­ing with new chan­nels. Dig­i­tal pay­ment meth­ods will come to the phys­i­cal point-of-sale with no dif­fer­en­ti­a­tion between in-per­son and dig­i­tal com­merce. It’s all just com­merce going for­ward.”

For more infor­ma­tion vis­it AEVI.com

Pro­mot­ed by AEVI