For Card Payments, Unified Standards are Key

In Europe, unified card payments standards have been gathering a drumbeat of growing support.

In a white paper titled “Understanding the Benefits of Adopting nexo Standards,” a group of retailers and industry experts explained that there is lack of harmony across European payment acceptance standards.

nexo, the international nonprofit based in Brussels – set up to promote a universal standard across card payments in Europe — said its commissioned research, which was conducted in April and May of this year, spanned multinational retailers.

The reason for the lack of cohesive standardization comes from the fact that each country embraces its own standards, many of which differ in terms of technology and process. The fragmented nature of the markets was not necessarily problematic when initially adopted as long as three decades ago, when merchants and financial institutions served, primarily, home markets. But that changed as sweeping social and political changes have led to globalized trade on an ever larger scale and, in Europe, with the advent of the euro.

In the research conducted for nexo, key findings point to the continued interoperability challenges that could be mollified by open standards across countries, which would also be free of royalties and universal in scope.

Upon the adoption of universal standards, the payments industry would enjoy a number of benefits, and the most immediate would include cost savings, which nexo estimates peg at greater than 20 percent.

Speed to market, in terms of implementation time to get a payments system up and running, would also be streamlined, by at least four months, the research showed. There’s also a boon tied to centralization for software developers, too, as they do not have to create individual products for each of several different countries.

Though the benefits of adopting nexo standards may be self-evident, the paper noted, reluctance may be an impediment to widespread universal standards adoption, chiefly because of time and money that has already been invested.

In reference to standards, data showed that the ISO 20022 platform is becoming widely adopted due to the fact that it is flexible enough to be used across a number of transactions, ranging from corporate payments to securities to trade between entities. Speaking to technology, said nexo, XML and consistent messaging standards ensure data flow and transparency.

nexo’s own standards, as recommended, look to support contact and contactless payments and both EMV and non-EMV security approaches, along with several pathways to customer verification, such as online and offline PIN, signatures and also tokenization.

In addition, there are clear advantages that can be realized with the nexo EPAS Retailer standard, which adds layers of security by separating software applications that are found on an ePOS terminal, which record transactions as they happen, and which share hardware such as card readers and printers. The EPAS standard, posited nexo, allows for smooth adoption of PCI DSS, and also allows retailers to maintain some level of choice in suppliers and technology.

Companies like ACI Worldwide have already begun working with clients to take advantage of the nexo EPAS standard. Andrew Quartermaine, VP Merchant Retail at ACI, commented:

“We are seeing increased interest in nexo standards from clients who are looking to deploy payment solutions rapidly, easily and optimized in all countries of operation. One single platform provides faster time to market, higher operational efficiency, and reduced compliance and certification costs.”

Adds Quartermaine:

“We would urge retailers to evaluate the nexo standards to ensure they can take advantage of the opportunities that these standards deliver for profitable cross-border growth.”

ACI Worldwide is a board member of nexo.

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To Download the whitepaper “Understanding the Benefits of Adopting nexo Standards” Click Here.