In Europe, the great digital shift is spurring traditional banks to play a bit of catch-up.
Lilia Metodieva, managing director at Monneo, told PYMNTS platforms that link solution providers, partners, banks and merchants together can help speed that pivot toward eCommerce with agility as consumer buying patterns remain fluid — and digital.
The company is a virtual International Bank Account Number (IBAN) provider, working in tandem with a network of Europe-based banks to provide eCommerce merchants with virtual IBANs.
In explaining the relationship amid the parties, she said Monneo acts as the “bridge” that serves up the infrastructure that can help other stakeholders handle the continuing surge of online payments while handling some of the regulatory and compliance processes tied to PSD2.
The establishment of virtual IBANs, she said, “allows our clients to make digital transfers.” It allows for incoming and outgoing transactions across SWIFT multi-currency for international payments; SEPA Euro within the Euro zone; GBP Faster Payments and CHAPS in the U.K.; and FX Payments in 134 currencies.
The IBAN accounts at Monneo, she added, are issued by actual banks linked to Monneo's segregated bank account in order to give better security to merchants. The need for virtual IBANs has become ever more pronounced, she said, as the demand for digital banking services has been on an upswing, opening a range of opportunity for FinTechs to provide better access for those services offered to consumers and businesses, leveraging an online platform for that access.
“There’s been a huge gap in the ecosystem,” she told PYMNTS, in linking banks, acquirers, processors and cardholders — particularly in streamlining the process of online merchants receiving settlement funds from acquirers after card transactions were processed from websites.
Even establishing accounts during the great digital shift has been a challenge. Traditionally, noted Metodieva, offline businesses can visit a traditional bank branch to open (and manage) an account and move forward through the know your customer (KYC) process.
But eCommerce, she said, is a different story. For eCommerce merchants, the requirement is that pretty much everything from an operational standpoint must be done digitally, must be done quickly and should be customizable. Through a single point of interaction, she said, companies in Europe can transact across borders, with suppliers located in other countries, through multiple IBAN accounts (a broad swath to ensure risk diversification) and ensure proper day-to-day business operations — enabling, as it were, the last mile of payments.
As for compliance efforts — and particularly with PSD2 — the hurdle for online merchants and their banks has been the compressed timeframe to comply with new data rules and technical implementations.
“The challenge of this last mile,” she said of PSD2 and multifactor authentication, “has been to ensure that at this stage of the payment to the merchants, there are no issues and everything is hassle free.”
Asked about the emergence of the single market — a digital one — across the EU, Metodieva cautioned that we are not there yet.
“I’m afraid we are not that close yet,” as there still remains much syncing to be done between countries and regulatory schemes. The tech is the easiest part, she said.
Looking ahead on what innovations may continue to reshape payments and speed eCommerce, she pointed to developments in using biometric data — especially against the backdrop of a European market with no barriers and personalized user experiences.
“I’m quite interested in authenticating the user based on the creation some kind of biometric behavior-based unique profile for every customer and every user,” she told PYMNTS. In the meantime, she added, “We bridge that gap between traditional banks and eCommerce.”