While I was at WorldPay, we bought a small payment services provider and used this capability to commercialise a new proposition that included a range of terminals, EPOS integration, online payments and a single management dashboard with a merchant account.
This is WorldPay Total and it was hugely gratifying to see this article in Computing outlining its successful implementation at the English Rugby Football Union’s (RFU) operations at Twickenham, the home of English Rugby. You have to look hard, mind. WorldPay’s PR team did a cracking job to get such a great selection of testamonials from RFU but there’s no reference to this deal on WorldPay’s website.
RFU had previously run a mixed estate of stand alone and integrated fixed and portable payment terminals through multiple acquirer contracts. Its online and telephone payments were handled through yet more third payment providers. This complexity made it hard to introduce customer service innovations, such as queue busting, as well as generating reconciliation headaches in the accounts office.
Total gave WorldPay the toolbox it needed to be able to offer a complete solution to RFU and, given the right commercial terms, the ability to win the entirety of the business available. And because the payment service is fully integrated into the EPOS and includes maintenance contracts for the payment terminals, the relationship between WorldPay and the RFU should be deeper (and hopefully more long lasting) than a typical acquirer/merchant contract.
“Since we rolled out the new service in October 2013, the value of payments has grown threefold (314 per cent)” – RFU
Total provides WorldPay with a platform to introduce new services within the overall contract and service framework. For example, the upgrade to contactless is simply a question of upgrading existing terminals.
“Now that we’ve rolled out contactless, our outlets are making more in sales; and fans are getting back to the game much more quickly, because they don’t have to stand in a lengthy queue” – RFU
The architecture of Total has also allowed WorldPay to be first in the UK with integrated enterprise m-POS devices too. RFU introduced them in its hospitality boxes to take payments on orders created on tablets and iPhones.
“The RFU saw a 44 per cent increase in the value of payments using its eight Worldpay Total Mobile devices in the corporate boxes” – RFU
Running all payments through a common reporting infrastructure is another strong customer benefit.
“Now we have all the latest payment statistics for each of our corporate boxes at our fingertips, so we can better target these customers with other loyalty schemes and offers” – RFU
This is one deal in one relatively small account but has important implication of the future direction of European acquirers. Here’s why.
The European card payments industry is in a state of agitation and foreboding in anticipation of the new EU interchange regulations. Card issuers will be under severe pressure; inevitably acquirers will be too. If acquirers (the ying to the issuers’ yang) want to grow, they have two options. Either to get bigger to drive up margins through economies of scale or to widen their product offering.
I covered the consolidation option in my report from MPE. But acquirers are generally paying less attention to the possibilities for diversification and this is why the WorldPay Total example is so interesting. Many acquirers are endowed with the brands, customers and distribution necessary to sell more than simply card processing services.
For the monolines, like WorldPay of course, diversification is an imperative not an option. In a head to head with a full service bank for an customers’ payment business, the pure acquirer will normally lose the deal. The bank can offer processing at cost as a sweetener to retain or win the wider banking relationship. The monoline acquirer can’t match that offer so needs to move the goalposts.
One good tactic for monolines is to reposition themselves as technology suppliers, not financial services businesses. This will help them lever acquiring contracts away from the business bankers. To do this, their key relationship focus needs to move from their clients’ finance team to their CIO with propositions like Total available to substantiate this shift in emphasis.
The banks will fight back, of course. Barclaycard, the UK’s remaining bank-owned acquirer responded to WorldPay Total by purchasing The Logic Group. This gives it a very broad capability but it may struggle to maintain high quality relationship management across such a wide range of both financial services and technology products.