The payments scene has been changing fast over the last year or two. Mobile payments like Apple Pay and the now-failed Semble; the rise of social-integrated systems like Alipay and WeChat’s payment service; and, locally, the introduction of digital layby services have introduced new challenges and opportunities for both retailers and payments providers. The Register met with Visa’s country manager for New Zealand and the South Pacific, Marty Kerr, for a catch-up on all things payments.
There’s a misconception that Visa is all about credit cards, but it’s actually in the business of payments technology, Kerr says.
Visa’s main role is providing processing services through its VisaNet electronic payments network, which connects more than 15,000 financial institutions in 44 million merchant locations around the world. Over the four quarters ending March 31, 2017, US$9.5 trillion was transacted using its payments products.
Asked for his opinion on why New Zealand has suddenly seen the emergence of four digital lay-by services in less than a year – Laybuy; Oxipay; Afterpay and PartPay – Kerr says they’re a local expression of a global trend in which the barriers to create new fintech solutions are lowered.
Customer experience is more important than it’s ever been, and as more aspects of the payments ecosystem are digitalised, it becomes easier for start-ups to meet consumers’ needs with new products.
“This is a great example of innovation in that space,” Kerr says.
He says traditional lay-by payments were clunky and ripe for reinvention, citing Uber’s streamlined payments process as another example of a new system that’s tapping into previously-unmet consumer demand.
“From our perspective, payments just need to be as frictionless as possible.”
Regarding the rise of mobile, Kerr sees Apple Pay and Kiwi banks’ proprietary alternatives set to grow, although he cautions that plastic, like cheques before it, isn’t going to disappear anytime soon.
Visa is working closely with the Ministry of Business, Innovation and Employment to address the issue of contactless credit and debit cards. Since the cards were popularised in 2015, providers have come under pressure from Retail NZ and other organisations to provide greater transparency around the cards’ fees.
“We’re fully supportive of more transparency,” Kerr says.
He’s confident there will be movement on this issue within the next six months.
When The Register spoke with Kerr, he had recently returned from a visit to Sydney. He confirmed that retailers there signaled concern about Amazon’s recent entry into Australia: “There’s a lot of nervousness about the unknown in the Australian market.”
Kerr himself is optimistic about the ability of Australian and New Zealand retailers to weather the storm of Amazon’s arrival. He sees price, fulfillment and a frictionless customer experience as Amazon’s key differentiators, “but they haven’t got a monopoly on it. No way.”
Customers seeking a transactional experience will come to Amazon, but some will want a more tailored, human kind of shopping interaction.
“That’s a huge opportunity for New Zealand retailers.”
“I think Kiwi retailers on a per capita [basis] don’t seem to have the same strength of focus on digital that others do.”
This could be a strong strategy if these unspent resources were deliberately diverted into a bricks and mortar offering, but Kerr is unsure whether that’s the case.
The demand for omnichannel retail is growing quickly, but every new venture requires an outstanding payments interface to make it work. Visa’s role is to make sure retailers are supported in this area, Kerr says.