News about working with Endava, and thoughts about the fragmentation in the authentication landscape, and payments friction generally. 

On being ready for new opportunities

About 8 years ago, I was sitting at my desk, pondering how we could meet the challenge of getting more engineers working on the platform I was managing while at the same time, trying to be a more adaptable and responsive to the constant demand for new features that the product teams needed to meet customer needs, when my desk phone rang.

It was a cold call from a young salesperson from a company I’d never heard of. Normally, of course, I’d have hurried to extract myself from the conversation as soon as I could, but on that day, it just seemed very timely. The company was called Endava, and they wanted to about about agile development and “near-shoring”.

Cluj in the Eighteenth Century

Very quickly, we started working with a small team of developers based in Cluj in Romania. The thing that really struck me was how much positive challenge there was from the Endava engineers, making sure that they (and we) understood exactly what we were building and why.

That relationship grew into something pretty significant between Worldpay and Endava, which just goes to show that it is sometimes worth taken a phone call.

To cut a long story short, I’m excited to say that I’m going to be working with Endava again as an Advisory Board member and consultant to their customers.

Emerging coronaviruses as a vector for pandemic

While we’re thinking about the future of payments, I’m always on the look out for things that might make dislocating changes in the industry, so it would be remiss of me not to point out the dangers posed by novel coronaviruses such as those that caused MERS and SARS. If everyone were locked down in their homes avoiding catching and spreading a virus, then clearly there’d be a huge shift to ecommerce from physical payments, and even in stores, we’d probably use a lot more contactless.
Of course, it’s reassuring to know that the pharmaceutical industry is absolutely up to speed on this issue, and none more so than Glaxo Smith Kline in their research base in Barnard Castle, near Durham. I’ve just bought a new pair of specs, so it might be fun to drive up there and get a tour around, stretch the legs, stay alert to trends in the market, you know?

Fragmentation and Friction

It also got me thinking about current trends in payments ahead of a trip to Money2020 in Vegas next week. In particular, the fragmentation of the European payment authentication landscape as different national competent authorities find different approaches to the period of “supervisory flexibility” has brought a level of complexity and uncertainty to the market in a way which is not terribly helpful. Paul Rodgers at Vendorcom (and a panel member at the UK’s Payment Systems Regulator) has been trenchant in his views about the lack of clarity and consistency across the European market. As I say on the Endava blog,

I think that the fragmented approach to authentication that we’re seeing in Europe as a result of PSD2 is the biggest challenge locally. Some authorities have pushed back deadlines, others have not, and consumers and merchants will be confused about what they should be doing. The bottom line is that everyone selling something online in Europe needs to have a strong authentication journey ready for their customers as soon as possible, and to make that journey as smooth and easy to understand as they can. But there’s no doubt that there will be additional friction in the process, and we might see a reduction in growth rates for ecommerce in our region. I hope not.

More generally, getting this balance of friction and consent for consumers paying for things is a challenge that exists all over the world. Merchants want things to be frictionless, payers want things to be frictionless *until they don’t*. Regulators haven’t really worked out yet that ensuring that an appropriate level of consent has been given by consumers for a payment to occur is a hard problem to solve, and it becomes increasingly important as more payments go “invisible”. There will be circumstances when it’s critical to make sure that the consumer has made an explicit decision to pay, and that decision can’t be just taken away by providers trying to minimise drop-out in their sales funnel.

Progress at the Web Payments Working Group

The work that we’ve been doing at the Web Payments Working Group of the W3C, developing the Payment Request and Payment Handler to work with Web Authentication is motivated by reducing fragmented approaches and reducing friction, so it was genuinely heartening to see payments companies, payment schemes, consumer organisation and standards bodies like EMVCO and FIDO having some great conversations at the first face to face meeting of the Web Payments Security Interest group in Fukuoka, Japan last month. I hope that we continue to make lots of progress around improving everyone’s online experience of payments.