Simon Haslam is becoming president and CEO of Elavon at a time of extreme stress for payments processors, which face nimble competitors, new payment standards and high-profile security risks.
To navigate the U.S. Bancorp unit through a challenging market, Haslam will look inward.
"A key area of investment for us is around innovation," Haslam says. "Rather than relying on a third party to make the change for us, or buying technology, we have our own team of in-house experts to deliver products quickly, which is the whole idea of having a group of innovators."
By developing tech internally, Elavon plans to manage the U.S. migration to EMV-chip payment cards, build out mobile commerce capabilities and shield itself from data breaches.
At the heart of Elavon's strategy is The Grove, its Atlanta-based innovation lab. The Grove is designed to operate like a fast-moving startup that leverages local talent.
Haslam did not reveal specific product launches or a timetable, but says mobile payments will be a focus.
"[Mobile technology] will be a big game changer….and the Grove has put us at the forefront of the changes that will take place in the industry. It's allowing us to react rapidly through agile development," Haslam says.
The stress new companies such as Square and Isis have placed on incumbent payments companies has been the subject of much discussion in the payments industry.
"All established organizations grapple with the best ways to innovate and continue to deliver new products and services to their clients," says Zil Bareisis, a senior analyst at Celent. "Many find that establishing dedicated innovation centers is a great way to coalesce the energy and creativity within the organization and to accelerate the flow of ideas and product introduction to market."
Haslam, who first joined Elavon in 2005, starts his new job during a particularly rough week for the payments processing industry. The U.S. government has charged eight people in connection to a $45 million international prepaid card processing breach. It's the latest in a series of high-profile data breaches at payment processors.
"We've been operating in this market for twenty years. For our own purposes we spend [more than $1 million] per year on security and we continue to look at protection," Haslam says. "Obviously with these breaches that have happened over the past few years, it impacts processors adversely, as well as financial institutions, customers or anybody that has been involved in the breaches."
Security is not a competitive area, and Elavon has participated in intelligence sharing with other companies—an effort championed by Heartland Payment Systems CEO Robert Carr after a breach at his company several years ago.
Elavon's focus on internal systems development is also helpful in breach prevention, Haslam says, though the company would carefully vet any partners.
"The short answer is yes, developing internally does help with breach prevention…If we were partnering with any organization, we would expect them to have the same security standards that we adhere to," he says.
Haslam was most recently president of Elavon International Markets, which placed him at the fore of a number of Elavon's global initiatives. The experience will be useful as Elavon moves into new markets, Haslam says.
Elavon is growing its operations in Mexico, Brazil, and Canada. Elavon has also recently launched a merchant services partnership in Spain with Santander. Elavon expects the Santander relationship will lead to similar partnerships elsewhere.
Elavon's international reach will also help it manage EMV migration in the U.S., Haslam says. The U.S. is one of the last card markets to adopt EMV-chip cards, which are also called chip-and-PIN cards and are considered safer than magnetic-stripe cards.
"We're well placed with regards to chip and PIN. It will happen and we have been though the process in other parts of our businesses, unlike a lot of the other companies that are focused on the U.S. market," Haslam says. "This will not be new to us."
Haslam did not say whether Elavon would repurpose its European chip card technology for the U.S., but said the pre-existing tech would enable a smooth transition for merchants.
Elavon's scale may also come in handy.
"EMV migration is a significant challenge for all parties, whether you are an issuer, processor or merchant," Bareisis says. "Having said that, large companies that specialize in payments, such large processors, are much better equipped to deal with those challenges than, say, a small issuer or a small merchant."