Building platforms that adhere to European regulations gave fintech company Worldnet Payments an edge in the US frictionless payment and EMV (Europay, MasterCard, Visa) marketplace, one that is set to flourish over the coming months.
Europe is reasonably advanced in terms of flexible payment options compared with the US, yet this is set to change in the near future, with EMV, or “chip and pin”, payments becoming commonplace, and newer technologies gaining traction.
Already providing an advanced range of own-brand EMV-enabled products and services across multiple payment channels, including e-commerce, mobile, POS (point-of-sale) and iPOS (integrated POS) in the US, Worldnet Payments is strategically placed to service the increased need for enterprise-grade omnichannel solutions that incorporate EMV technology.
Worldnet Payments President and Co-Founder Will Byrne explains: “The US has traditionally lagged behind Europe in terms of payment solutions – chip and pin has been here in Europe for 15-20 years, contactless has been here for over 10 years, yet in the US, contactless is less than 1% of all transactions. That’s going to change hugely with the proposed issue of more than 100 million chip cards with contactless capability in the US this year. That’s a huge market initiative – and we’re at the forefront of enabling this technology.”
Established in 2007, Worldnet Payments first started by developing a payment gateway that enabled e-commerce “cardholder not present” transactions, before moving into the emerging world of mobile payments. But it was their reaction to a mandate by Visa that changed the vision of the company – and set in motion its future role at the forefront of the US payments industry.
“Unfortunately for us, at the time, Visa made a decision that all mobile transactions in Europe must be EMV compliant – chip and pin enabled,” explains Will. “We didn’t have chip and pin on the platform, so we made the strategic decision – a difficult one, as it absorbed a large amount of our resources and time – to enable EMV on the platform. However, this proved to be a great move because it allowed us to move into the mobile market, and not only could we pitch our product in Europe, we could also license a version of the platform for large-scale enterprise players, which took us into the US market – a pivot step for us.”
Since then, the company has grown its presence in the US significantly. “We launched our first platform deal in the US market around 2009/2010, and that move changed the business in terms of scale and ambition. We’ve had a series of those type of gateway license deals in the intervening years and that has driven the profitability of the company.”
Another decision by Visa then set in motion the future of the business, as Will explains: “At the back end of 2015, Visa intervened yet again, this time in our favour, and mandated chip in the US market – up to then, the US was a swipe and sign (magnetic stripe) market. We had an advantage then because we already had chip capability on our platform and were able to bring the technology to the US market. Most of our competitors in the US market were domestic players who were limited to mag-stripe processing capabilities, and so having chip technology already gave us an edge. At this point, over 85% of our business comes from the North American market and the figure will be 90% or more by the end of 2020.”
How Worldnet Payments delivers frictionless payments
One of the ways in which Worldnet Payments is leading the way is in ‘intelligent retail’ and frictionless payments. “The space where we’re gaining most traction, in terms of disrupting the marketplace, is in intelligent retail, frictionless payments, or the ‘Uberisation’ of payments in the retail sector,” says Will.
“They call it “Uberisation” because one of the major attractions of the Uber taxi experience is that at the end of the journey, you just get out of the car, with no payment interaction, knowing the transaction has been paid securely.
Amazon Go is probably the biggest example of this in the retail sector; they have developed pilot stores where there are no staff involved in the payment process. Consumers access the stores using a whole series of identification methods, ranging from card insert or swipe, thumbprint recognition, and so on. This allows them to have stores that people can access 24/7, make frictionless payments in a secure manner without having to interact with any staff.”
One such partner is ViaTouch, whose end product is called VICKI. Will adds: “VICKI is a standalone retail unit, which you could say is a very sophisticated vending machine for high-value goods. The units or cabinets are about six foot by three foot and are used in-store in places like Macy’s, and in other locations like office blocks, college campuses and hotels. The customer inserts their card, goes through the ID process and the machine reads it and identifies the customer. The customer can then buy what they want and pay securely. The transaction is totally frictionless, e.g. there’s no interaction with another person. You also have the option of registering your ID method, e.g. retina or thumbprint, with the machine after you’ve used it for the first time. We enable all of this at the back end enabling customer identification, authentication and secure payment.”
Other key partners include Swyft, a company at the forefront of automated retail and smart vending solutions in the US. “We have also recently delivered an in-cab solution for a company called CMT,” says Will. “They’re the largest private cab fleet in New York and therefore have Uber as their competitor. We provide them with their own frictionless transaction processing solution across a variety of payment channels including ARRO their own mobile application.”
With US consumers catching up quickly with their European neighbours in terms of flexible payment options, this market is set to expand rapidly over the coming months and years – and with Worldnet Payments at the forefront of this technology in the marketplace, expect to hear a lot more about this company in the near future.