LAS VEGASTen years from now, members of the acquiring industry may have fond recollections of the nation's transition to mobile payments, says Brian Mooney, CEO of Bank of America Merchant Services.
"We will look back and say, 'I was there when we changed people's lives,'" Mooney said last week at Transact 14, the Electronic Transactions Association's trade show.
But it may remain difficult to grasp the transition to mobile payments without the benefit of hindsight, he cautions, noting that no single "inflection point" will mark the day the industry knows that mobile payments are succeeding.
Whenever that moment arrives, it will come when consumers, merchants and banks all realize the benefits of mobile payments, Mooney says.
"Profits drive change," he observes, maintaining that "we are on the cusp" of an era of mobile payments.
Moreover, the onset of mobile payments represents just one of the industry's new areas of opportunity, according to Mooney's fellow panelist, Debra Rossi, CEO of Wells Fargo Merchant Services LLC.
Opportunities are also arising because of big data, loyalty programs and the chance to work with the tech companies now entering the payments business, Rossi says. "The most exciting time in the payments industry is now," she says.
Catalysts for change include cloud computing, smartphones and electronic tablets, says another panelist, Donald Boeding, president of Vantiv.
Technology is enabling acquirers to wrap payments in other services, Boeding says, providing the example of Uber, the company that makes it easy to hail a cab in a remote location. "Our business is no longer just the transaction,'" he maintains.
And promoting those value-added services will demand that the capabilities of the industry's salespeople rise to meet the challenges, Boeding says.
Meanwhile, as opportunity blossoms in acquiring, the nation's legislators and regulators are taking a closer look for potential problems with transactions. The industry can head off rule-making by demonstrating that it's not taking on risky merchants, the executives say.
Smaller independent sales organizations can show their commitment to limiting risk by following guidelines from the ETA, suggests Boeding.
Small ISO should take on risk management themselves instead of relying on the big acquirers to handle it alone, he advises.
That's why ISOs should not take offense at risk-related questions from the acquiring banks, Mooney says. "It doesn't mean that we don't value you."
Expect regulators to take a hard-line approach, questioning why acquirers can't check the website of every account, Rossi says.
"Saying, 'I didn't know,' is not going to cut us any slack with regulators," she cautions.
To appease regulators, Visa and MasterCard are cooperating with each other, and the rest of the industry should follow that lead, according to Boeding.
Acquirers should do the same, or else the government may intervene, he says. The government's interest in the industry has intensified since the high-profile data breach at Target during the holidays.
Consumers and merchants are also paying attention to the Target breach, and may finally catch on to the magnitude of the industry's security problem.
That new awareness could help ease the transition to EMV in the United States, Rossi maintains, adding: "It's the time. Finally."
As a result, merchants are approaching Bank of America Merchant Services with security questions, says Mooney. The discussion with merchants has changed from saving a minute fraction of a cent on transactions. "They'd gladly write a check for $100,000 to avoid a breach," he says.
The merchants should realize that Canada's switch to EMV chip cards, which help protect card data, has prompted data thieves to focus on the United States, says Rossi. EMV also moves fraud from stores to e-commerce, she says.
But the U.S. transition to EMV still presents challenges, says Boeding. Some large retailers assert that it's physically impossible to meet the card brands' EMV deadlines because of their large and complex IT departments and their many checkout lanes scattered across huge regions.
Smaller merchants have a lot less to deal with in the transition, and helping them make the change offers ISOs an opportunity to establish or reaffirm their role as consultants, he says.