“Accepting electronic payments is a business enabler. It is important that traders take this into account”

DISTRIBUTION TODAY spoke with Pedro Osório de Castro, myPOS Country Manager, who gave us his perspective on the growth of the payments market and the digitalization it has been going through. Check out the gist of that conversation in the lines below.

During the period of the pandemic, we felt a boom in the area of ​​payments in Portugal. What were the main dynamics to highlight?

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Indeed, the pandemic has marked, even accelerated, the pace of the digital trend in several sectors. In the specific case of payments, this also happened. Demand has increased, particularly in 2020, for solutions for accepting electronic payments and in particular the issue of contactless. Even online has increased in terms of demand. The pandemic has brought us that in several sectors, there has been this acceleration. In the case of contactless, for example, which was a solution already used, but which was not the majority, this acceleration was felt. Also on the issue of electronic payments, with the health issue compared to physical money, there has been an adaptation. It’s positive, that is to say, the pandemic has been a terrible thing, but it has stimulated the digitalization of several sectors. Out of curiosity, we were able to serve the client in the various channels available, whether in person or online. In this sense, the client, with a single partner, can feed the different channels.

Is electronic payment one of the keys to retail success today? Do you think this will further accelerate innovation in this segment?

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Our outlook is that this trend will continue, but perhaps not as quickly or as dramatically as in 2020. It will be a natural trend that all businesses, including small establishments, will adopt electronic payment solutions, because it becomes so easier to do business. I often give the example that if I have 10 euros in my wallet, I am in a store, I see something that is worth 20 euros, and if the store does not accept electronic payments, I have to withdraw money to pay. If this establishment accepts electronic payments, I pull out the card and pay. Accepting electronic payments is a business enabler. It is important for traders to take this into account. This business enabler is more important than the fees they pay or the costs they may incur.

Obviously, there was a need for consumer adaptation due to the vagaries of the pandemic, but there were also more cultural issues: unsuitable terminals, distrust of online payments and low e-commerce penetration. . Has there been a real transformation of payments?

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There is still a relevant percentage of terminals that do not accept contactless. Why? Because they are called ATM terminals, only accepting ATMs. This is still a very relevant reality. Many banks offer only one ATM terminal, terminals which do not accept VISA/Mastercard. This bottleneck has been reduced, but it is still relevant. On the other hand, there is a big hurdle in a lot of commerce that traders are older people and less digitally literate, and therefore have more difficulty entering the digital world. Still, there has been significant evolution, but we will need to continue to take additional steps to evolve on this issue. We need faster and easier means of payment, such as contactless technology, but also solutions that involve the adoption of online payments, which enable the multiplication of commercial channels. There have been significant developments, but there is still a long way to go.

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Now, with the expected recovery in tourism, there will be multiple payment methods to use. Do your terminals already easily support payments with foreign cards?

We immediately supply the main international brands: VISA, Mastercard, American Express, JCB, Union Pay. When a customer opens an account with us, they immediately have these marks. You do not have to conclude additional contracts for this situation. Therefore, our solution is a solution that fits very well in the tourism sector precisely because it is a solution that makes available the main international brands, but, on the other hand, allows a client who operates in several countries to use our solution. Our solution works throughout the European Economic Area. Tourism-related customers are great customers for us and we have a great solution for them. This aspect of international brands and our terminals operating throughout the European Economic Area greatly facilitates day-to-day management.

Digitizing all businesses has become the new norm. Is it essential for companies to be in this environment? Studies also indicate that the facilities allowed at the time of payment are one of the keys to the success of an e-commerce…

We have integrations with the main credit unions to allow this simplification. Integration into a client’s website is a very simple process. For smaller, less digitized customers, being able to create an online store with us is clearly an advantage. It’s a great feature, but we’ve added another, which is also considered online, which is pay-per-link, giving the ability to send a link to a customer, already with the value, by simply placing bank details in a secure environment and make a remote payment. We were able to provide a set of tools beyond face-to-face.

With all these transformations, what role will money play in the future? Are we moving further and further away from physical cash towards digital payments?

We are going to witness very important transformations. Innovation and technology are a train that never stops. It is a train that moves more or less quickly depending on the evolution of societies or the context, such as the pandemic for example. What we are going to see is an environment of many changes in payments and in our relationship with money. Money continues to be very relevant and will continue to be for a long time, but what is going to happen, gradually, is this transformation. Probably if we are talking to a person of an older generation, having money in your wallet is a relevant thing. There are still many cash-based businesses, often low-paying businesses. It is important to bring these companies into new environments. If we talk to a younger generation, they probably don’t even have money in their wallet. Pay by mobile phone. There are interesting examples, for example, in the Asian case where, as there was further development, the development did not go through the card, but through the wallet. What we’re going to see in the next few years is this very big transformation in how we pay.

Are there areas where we will see faster transformation?

One of the biggest challenges will be at the retail level. Today I go to a supermarket or a store, I choose my items and when I look at the checkout I have ten people in front of me. It’s an interesting example. We have already had some pilots, even in Portugal, where what we see is almost a dematerialization of payment. The creation of a situation where I go to the store/supermarket, choose the products and leave… So many steps that are taken, more or less quickly depending on the country and the market, but I have no doubt that the future is already today. These projects are embryos that will develop. In the future, we will pay without realizing it, without having to take complex action. Payment will be increasingly transparent.

Security is another key to attracting customers. Do these solutions cover these “consumer needs”?

Electronic payments are one of the safest payment methods. The least secure form is cash because, as a merchant, if you receive cash payments and get robbed, I will have to give you the amount I have in cash. If I receive the overwhelming majority or all of the card payments or electronic payments, the burglar is no longer interested in stealing from me. You won’t have to steal anything. This is a very important security factor for the trader. This is clearly an advantage, beyond the management components. In a solution like ours, all transactions are done on a single platform that can be integrated with management or billing software. The client now has a completely digital and smooth workflow, which greatly improves the functioning of the backoffice. For the consumer, this security is quite high. For example, with contactless, it allows an unlimited set of operations. After a few operations, we must enter the code. Card protection, in the event of theft, is even retroactive in certain situations for 24 hours.

Finally, fees paid for services like yours were one of the biggest barriers for merchants to make card payments available. What has changed to have greater merchant receptivity today?

What has actually happened is that these commissions charged per transaction have gone down over the years. Also because the market has more and more players, the prices have fallen and the costs are more and more affordable. There is one element that we provide which is the fact that we have no monthly fees. The customer has no fixed cost logic: he buys the terminal and then no longer has any fixed costs, only paying for what he uses. If there is a period when you do not receive transactions, there is no charge. These costs, available to the merchant, are decreasing, which makes these solutions more attractive. We also allow merchants to personalize the terminals: they can personalize the receipt issued; on your platform give a name to the terminal, to identify it easily, being able to know the volume of transactions in each terminal. The customer does not need to close a transaction made on one of our terminals, because this transaction is instantly recorded in the customer’s account. This means that the client has access to information in real time, being able to then export everything to their backoffice and accounting, thus improving the whole accounting reconciliation. The need to print receipts disappears. On our platform, all transactions appear separately from the fees paid for that transaction. All this is not only a question of the terminal, but a question of a management tool that optimizes all backoffice work, allowing costs to be reduced and human resources to be capitalized for value-added tasks. We don’t just provide terminals, but a management tool.

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